Weekly Market Update

Author : Rachel Poole
Date : February 6, 2021

Global Market News

Global equities rally
Global equities rallied this week after dropping more than 3% last week. The yield on the US 10-year Treasury note rose to 1.17% while oil prices soared. The price of a barrel of West Texas Intermediate crude oil jumped more than 9%, closing the week at $56.97. Volatility, as measured by the Cboe Volatility Index (VIX) dropped back down to 21 after closing last week at 32.

Lockdowns slow labor market recovery
US nonfarm payrolls rose by only 49,000 in January, coming in a bit shy of expectations. The U-3 unemployment rate dropped only 0.4% to 6.3% revealing a weak recovery in the labor market. After the government revised its population estimate, a net 159,000 downward revision to December and November payrolls suggests the second wave of Covid-19 lockdowns at the end of 2020 hampered the labor market more than expected.

Updated Market Figures

Coronavirus Updates

ovid-19 by the numbers
Global Confirmed Covid-19 cases: 105,000,000 Global Covid-19 deaths: 2,290,000
US Confirmed Covid-19 cases: 26,700,000 US Covid-19 deaths: 456,000
*As of Friday evening

Vaccinations pick up speed as new vaccines enter the playing field
Vaccinations are picking up pace worldwide as new vaccines enter the playing field. Johnson & Johnson, whose vaccine has proven to be 66% effective and can be stored at higher temperatures, has filed for emergency use authorization with the US Food and Drug Administration. Another company, Novavax has submitted data to US and European Union regulators to receive authorization for its vaccine. In addition, a British medical journal has found Russia’s Sputnik V vaccine to be safe and effective. Markets anticipate a dramatically increasing global vaccine supply could lead to a faster economic recovery.

Geopolitics Spotlight

Mario Draghi to try to form a new Italian government
Italy’s President Sergio Mattarella has given former European Central Bank President Mario Draghi the mandate to form a unity government. The move was prompted by the resignation of Prime Minister Giuseppe Conte last week. Draghi will be meeting with disparate political parties this weekend to see if he can form a stable coalition.

UN Security Council pressures Myanmar military junta
International pressure is mounting over Myanmar’s military coup. The United Nations Security Council has called on Myanmar’s military junta to release leader Aung San Suu Kyi and other officials who were forced from power and detained on Monday in a coup. Indonesia and Malaysia have urged a meeting of the Association of Southeast Asian Nations (ASEAN) countries to discuss the crisis.

US Social & Political Developments

US scales back involvement in Yemen
US President Joe Biden announced the US will end its support for offensive operations in Yemen and that it would increase US diplomacy efforts in concluding the conflict and supporting peace talks and humanitarian aid. The US has supported the Saudi-led coalition that is fighting the Iran-backed rebels in Yemen for the last several years. In this first foreign policy speech of his presidency, Biden ensured that the US is not abandoning Saudi Arabia and will continue to help the country “defend its sovereignty and territorial integrity.”

Democrats seek large stimulus bill
After meeting with 10 Republicans this week to discuss their smaller Covid-19 relief proposal, Biden decided to move forward with his larger $1.9 trillion proposal saying it was time to “go big”. On Friday morning, the Senate passed a budget resolution with a tie-breaking vote from Vice President Kamala Harris. The resolution paves the way for the large relief package to be passed with a simple majority instead of a 60-vote supermajority.

Corporate/Sector News

EV sector rallies
There was a broad rally in the electric vehicle (EV) space this week as strong demand across the US and China continues. Contributing to the rally were reports that Apple is close to finalizing a deal with Hyundai-Kia to manufacture an Apple-branded autonomous EV. Furthermore, Amazon began using Rivian’s prototype electric trucks to make deliveries in Los Angeles.

Bezos steps down as Amazon’s CEO
CEO of Amazon, Jeff Bezos, said he would step down from his position later this year and allow Andy Jassy, the head of Amazon’s cloud computing division, to run the company. Bezos will still play a role at Amazon as executive chairman but wants to dive deeper into his other projects which include The Washington Post newspaper and private space company Blue Origin.

SpaceX announces plans for first civilian mission
SpaceX has announced its plans to launch the world’s all-civilian space mission in the fourth quarter of 2021. The mission will be commanded by Shift4Payments CEO and accomplished pilot Jared Isaacman.

This Week from BlackSummit

Crossroads: At the Intersection of Geopolitics and Geoeconomics – Rachel Poole
It’s the Capital Allocation, Stupid – Joel Charalambakis
Geopolitical Challenges and Statecraft – Tyler Thompson and Rachel Poole

Image of the Week

Video of the Week

This farm uses 90% less water than traditional farms.
Source: World Economic Forum