Job data was better-than-expected today, with first-time claims for unemployment insurance fally significantly last week. Claims totaled 684,000 for the week ended March 20, the first time the number has been below 700,000 since the start of the pandemic, and well below the 781,000 from a week ago. To investors, this is good and bad news, as this could also mean that inflation could pick up soon.

However, Federal Reserve Chairman Jerome Powell remains reassuring and said yesterday that that he isn't worried about the recent rise in long-term bond yields, and again indicated that the Fed  will continue to support the economy as long as it's needed.

The problem is that everyone imagined, or secretly hoped, that things would be back to normal in April. Obviously, this will not be the case and this is upsetting economic forecasts. It also forces specialists to review their copies of growth trajectories. We know that the longer the sanitary crisis lasts, the harder the economic crisis will be. We also know that this crisis should be followed by a strong recovery.

On markets, this period is reflected in a phase of stagnation and wait-and-see attitude, and in the continuation of arbitrages against technology stocks. With the exception of the semiconductor sector, because investors have clearly understood that it is at the heart of a crucial issue for the future, exacerbated by current shortages and East-West tensions. The rotation between "growth" and "value" styles continues. This can be illustrated by the 25% performance differential between Apple and JPMorgan Chase since January 1: -7.7% for the Californian group versus +17.6% for the bank. Over longer time frames, the investment in Apple always crushes everything in its path. But in the short term, the search for performance is going through sectors that have been poorly considered in recent years.

Let's stay in the tech space with Chinese players getting a severe shakeup on stock market in Asia this morning, since the SEC made the Trump administration's decisions to tighten listing requirements for non-US companies enforceable. Stars like Xiaomi, Tencent or NetEase are down. That doesn't mean these companies will no longer have access to U.S. markets or investors, but they will need to strengthen their screening procedures. And they will have to demonstrate that they are not owned or controlled by a foreign government power in the United States (hello China). The sword of Damocles is not new, but it is very real at a time when Beijing is almost openly seeking to recover as much data as possible on users of digital services.

Yesterday, it was more maritime cargo that attracted attention, after the announcement of the accidental blockage of the Suez Canal by a container ship. Photos of the huge vessel stranded across the canal went around the world. The blockage allowed the black gold to rebound by 6% yesterday, erasing identical losses from the day before. The incident has put the spotlight back on the tensions in shipping, which continue. 

Meanwhile, the EU is starting a summit today that is likely to go round and round on the vaccine strategy. In a sign of warming transatlantic relations, Joe Biden will be invited to participate in the evening videoconference of the 27. In parallel, there will be enough public interventions by central bankers today on both sides of the Atlantic to give us all headaches.

Economic highlights of the day

On the agenda today: French business confidence indices for March, the Swiss National Bank's decision on rates and the publication of the M3 money supply by the European Central Bank. In the United States, the latest estimate of Q4 GDP and new weekly jobless claims. Many central bankers will participate in public events today.

Pressure remains on the euro, at USD 1.1820 this morning. The ounce of gold is standing at USD 1729. After yesterday's sharp rebound, oil is calming down, at USD 59.3 per barrel WTI and USD 62.6 per barrel Brent. U.S. debt is yielding 1.62% over 10 years. Bitcoin is trading at USD 52,500.

On markets:

  • *Chinese social networks were ablaze Wednesday night in reaction to an undated statement in which the sports equipment maker said it was "concerned" about allegations of forced labor in Xinjiang. Nike shares are down 4.7% in pre-market trading.
  • * Facebook, Alphabet and Twitter are down between 0.8% and 2.7% ahead of a congressional hearing on ideological extremism and disinformation.
  • * U.S.-listed stocks of Chinese groups Baidu, Alibaba and JD.com are little changed in pre-market trading after U.S. financial regulators adopted measures that could lead to their forced delisting if they fail to comply with U.S. auditing standards.
  • * Laser maker Coherent announced Thursday that it will enter into a merger agreement with II-VI that is expected to value it at nearly $7 billion, putting a stop to a takeover bid by fiber optics company Lument. Lumentum shares gained 6% while II-VI fell by the same amount in pre-market trading.