Stockmarkets have a spring in their step
Global stockmarkets have been basking in the post-Covid economic recovery as GDP, retail sales and manufacturing are all on the way back up.

Spring is here and the economy is blossoming, says Randall Forsyth in Barron’s. Mass vaccination and “trillions of dollars of fiscal and monetary Miracle-Gro” have nourished the economy’s green shoots. US GDP is expanding at a 6% annual rate; jobs growth has surpassed expectations. Retail sales rose by 9.8% month-on-month in March as Americans spent their stimulus cheques.
Signs of a global recovery are especially clear in manufacturing, says Jim O’Neill in Project Syndicate. The US manufacturing purchasing managers index (PMI) has recorded its highest reading since 1983. The eurozone equivalent hit the highest level in the bloc’s 22-year history, while the UK manufacturing PMI rose to a ten-year high.
Inflation emerges
Global markets have been basking in the recovery. America’s S&P 500 and Dow indices both finished last week at record highs following four straight weeks of gains. The pan-European Stoxx 600 hit a new record peak on Monday morning. The FTSE 100 has eclipsed 7,000 (see page 5).
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Markets did fall back slightly at the beginning of this week, report Naomi Rovnick and Colby Smith in the Financial Times. A worsening Covid-19 situation in places such as India and Brazil has raised doubts about whether the global recovery is really secure. Yuko Takano of Newton Investment Management adds that markets have now priced in all the good news about vaccines and stimulus. They need “something new to look forward to”.
The first signs of price rises have also started to emerge. Annual US inflation hit 2.6% in March, a significant rise from February’s reading of 1.7%. You would have bet that bond markets would panic at the news, but in the event they shrugged, says John Authers on Bloomberg. The inflation spike was driven by the recovery in oil prices, which plunged below zero one year ago this week. Stripping out oil and food, “core” inflation remains under control for now. The consensus is that the US is heading for inflation a little over target over the next five years, but investors are not yet betting on an outright “regime shift” that takes us back to the 1970s.
The S&P 500 is up by 87% since its nadir in March last year and the bull market has never looked healthier, says Caitlin McCabe in The Wall Street Journal. The initial rebound was driven by technology stocks. Yet this year other sectors have risen. A “broader” market rally usually has further to run than one dependent on a few stocks.
How much longer?
With interest rates pinned to the floor and central bankers still gorging themselves on bonds, there is little prospect of markets rolling over, says Ambrose Evans-Pritchard in The Daily Telegraph. There are a few signs of cooling sentiment: appetite for newly floated businesses is not what it was, as shown by the Deliveroo flop. Geopolitical risks are worsening (see page 14). Inflation is another worry. Yet for now, none of that is likely to put a dent in the bull market. “Great equity booms” can go on “for a year or 18 months longer than a nervous rationalist believes possible.”
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019.
Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere.
He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful.
Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.
-
What will the unravelling of US-China trade mean for the economy?
What will a US-China decoupling mean for the global economy?
-
Scottish Mortgage: why we’re turning to private companies and China for exceptional returns
When it comes to delivering growth, Scottish Mortgage will stop at no end in its hunt for exceptional long-term returns - this includes China, unicorn companies and sectors such as space exploration
-
Two ways to tap into monopoly profits from airports
Most investors can’t get their hands on airports. Here are two ways you can
-
Fat profits: should you invest in weight-loss drugs?
The latest weight-loss treatments could transform public health and the world economy. Should you invest?
-
How investors could profit from Ramsden Holdings' four-part growth strategy
Ramsdens Holdings offers a diversified set of financial and retail services and a juicy yield, says Dr Michael Tubbs
-
How to invest in the booming insurance market
The insurance sector is experiencing rapid growth after years of stagnation. Smart investors should buy in now, says Rupert Hargreaves
-
Out of America's shadow: Why Trump's tariff chaos may be good for non-US stocks
Opinion Upending global investment and trade could benefit other countries at the expense of the US market, says Cris Sholto Heaton
-
BP's 'long, painful decline' – and why next year could be even tougher
Opinion Long-suffering shareholders in oil giant BP have been pushing for change. It won’t come soon enough, says Matthew Lynn
-
Investment trusts tap the profits in exotic and obscure global markets
Opinion Peter Walls, manager of the Unicorn Mastertrust fund, highlights three investment trusts as he shares where he'd put his money
-
Falling revenues and mounting debt spell trouble for Jumia Technologies
Struggling African e-commerce platform Jumia Technologies looks headed for the exit, says Dr Matthew Partridge.