Weekly Market Recap
Ship it. Ship it good
Week in review
- Australian unemployment rate plunges to 5.8%
- U.S. retail sales slump 3.0% m/m for February
- U.S. Federal Reserve upgrades forecasts, policy unchanged
- Eurozone Markit PMI composite
- U.S. Markit PMI manufacturing
- Eurozone consumer confidence
Thought of the week
The U.S. Federal Reserve pushed back against the risk of higher prolonged inflation at its policy meeting last week. The Fed views any higher rates of inflation in the coming months as being transitory rather than persistent. The updated set of economic forecasts illustrated a spike in inflation in 2021 but a rate of just over 2% by 2023. Moreover, the Fed is focused on actual inflation not expected inflation and seems dismissive of the market’s repricing of interest rate hikes. However, it’s expected inflation that will matter for markets. The surge in shipping costs is factor that some have pointed to as why inflation may be higher. This week’s chart looks at the relationship between global inflation and shipping inflation. There is some correlation between shipping costs and broader levels of inflation, it’s not a constant one. Inflation pressures may rise in the coming months and this will flow through to higher bond yields, but the Fed, and other central banks, are not going to budge.
Shipping price inflation vs. global inflation
JPMorgan Global Research Enhanced Index Equity Fund
To achieve a long-term return in excess of the benchmark by investing primarily in a portfolio of companies, globally; the risk characteristics of the portfolio of securities held by the Sub-Fund will resemble the risk characteristics of the portfolio of securities held in the benchmark.