Overview of TOP weekly news 10.3.2021

10 / 03 / 2021
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Can we expect a change in ECB’s policy?

According to Fidelity International, we can expect a tightening of financial conditions after the next ECB meeting. The whole world is currently struggling with rising government bond yields. The ECB also announced at the last statement the objective of maintaining “favourable financing conditions”. Through its measures, the ECB can help offset some of the financial conditions tightening. *

“We assume that the program is flexible and will be used for purchases in different countries as needed. In this respect, the largest revenue growth in Italy is fast and disorganized. The ECB is likely to strongly oppose it,” said Anna Stupnytska, a global macroeconomist at Fidelity International.

“Recent comments from ECB officials suggest that they do not feel satisfied with the degree and speed of tightening. This is understandable because US policy and the prospects for recovery are behind the growth in yields,” Supnytska added.

The third fiscal package approved by the Senate

Earlier this week, we saw the Senate’s successful approval of a third $1.9 trillion fiscal package. Democrats have voted to pass the final round of the stimulus law, which is returning to the final form of the House before a probable landing on President Biden’s table.

Like the previous packages, the package will focus on expanding unemployment benefits, tax breaks for children, unemployment benefits, vaccine distribution funds, health care subsidies and restaurant aid. This agreement would be the largest aid package adopted, as large-scale restrictions related to the coronavirus pandemic began in March 2020.

On a closer look at the package, 7% of the stimulus funding will go to Covid-19 treatment – testing and contact monitoring. The second-largest expenditure is assistance from the Disaster Relief Fund to cover funeral expenses in connection with the death of Covid-19. This section also includes the distribution of vaccines and the distribution of other medical supplies.

Rotation into value stocks

CEO of ARK Investment Management commented on the current market rotation towards value stocks that the recent higher performance of value stocks and economically sensitive cyclical sectors will help strengthen the bull market and help it in the long run.

“Currently, the market is expanding. The bull market is strengthening, which will work in our favour in the long run,” told Wood for CNBC.

The most profitable investments of ARK Investment in the last year were Tesla and Square, which rose sharply during the pandemic and attracted an inflow of $14.84 billion over the last 12 months.[3]

Avast sells part of its business

Avast has announced the sale of $66 million in mobile device family control to software developer Smith Micro Software. According to published information, the agreement should be completed in mid-April this year.

Performance of Avast’ shares (Source of the graph: Tradingview) [1]  

GameStop grows again

After GameStop captivated the world, attracting worldwide attention in January and Reddit’s “WallStreetBets” group defeated hedge funds. The company’s shares subsequently fell sharply but are currently rising again after the announcement that the company will reorient itself to online sales.*

Performance of GameStop’ shares (Source of the graph: Tradingview) [2]

Watch this week:

Thursday, March 11, 2021

The ECB will have monthly a central bank meeting in March. The deposit rate is expected to remain unchanged at -0.5%. *

Friday, March 12, 2021

Canada will publish unemployment developments in February. A decrease of 0.2% to 9.2% is expected. *

The US will publish the development of the PPI index in February. Analysts expect a 0.5% growth on a month-on-month basis. *

Source of the text: Investing, Zerohedge, Financial Times, Reuters, Tradingview

[1,2,3] Past performance is no guarantee of future results

*     Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or based on the current economic environment which is subject to change. Such statements are not guaranteeing future performance. They involve risks and other uncertainties which are difficult to predict. Results could differ materially from those expressed or implied in any forward-looking statements.

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