Every Friday, Brian Jacobsen provides perspective on key events and topics of the current week and his thoughts about what the week ahead may hold. Here’s his report for the week of April 3–9, 2021.

The week that was

  • Minutes from the last Federal Open Market Committee meeting said officials thought it will be “some time until substantial further progress toward the Committee’s maximum-employment and price-stability goals would be realized.”
  • The International Monetary Fund (IMF) raised its global growth forecast for 2021 from 5.5% to 6.0%. The IMF cited COVID-19 vaccination efforts and government spending as helping to drive economic growth faster than they originally projected.
  • Next week, earnings season kicks off with some big banks scheduled to report their earnings. At the index level, the average earnings per share (EPS) for S&P 500 Index companies are expected to rise more than 24% year over year, according to FactSet. Keep in mind that S&P 500 Index EPS for the first quarter of 2020 were down 15% from the first quarter of 2019, so the low base should help flatter EPS results for this quarter and next.


  • The U.S. services sector showed surprising strength in March. The Institute for Supply Management® Services Purchasing Managers Index for March reached a record high of 63.7. The index’s history goes back to 1997.
  • The Reserve Bank of Australia (RBA) kept its key policy rate unchanged. Just as the Bank of Canada flagged rising home prices as a possible sign of excessive risk taking, the RBA said it would monitor trends in borrowing for housing to make sure “lending standards are maintained.” The RBA was very explicit about what hurdles need to be cleared before it will increase its policy rate target: First, there must be significant gains in employment and a return to a tight labor market; second, wage growth will have to be materially higher; and finally, actual inflation must be “sustainably” within the 2% to 3% target range. In its policy statement, the RBA said, “The Board does not expect these conditions to be met until 2024 at the earliest.”
  • The Reserve Bank of India formalized its quantitative easing program through which it buys bonds to try to keep borrowing costs low. It pledged to buy up to 1 trillion rupees (approximately $13.5 billion USD) this quarter.


  • The U.S. Senate’s parliamentarian said Senate Democrats may be able to amend previous budget resolutions, possibly giving them more opportunities to use budget reconciliation to pass filibuster-proof legislation. Previously, the norm was to use budget reconciliation once per budget, but the rules allow for amending budget resolutions, which unlocks more opportunities to push through budget-related policies (taxes and spending, like infrastructure spending) with a simple majority. The budget reconciliation process is lengthy and complex, so it’s unclear whether Senate Democrats want to go the route of amending the 2021 budget resolution or just want to wait and work on the 2022 budget resolution.

The week to come

  • Earnings season begins! First-quarter earnings should start to be released next week.
  • China’s export and import data for March will be released on Tuesday. Considering the lockdowns of March 2020, the year-over-year changes are likely to be quite large. That will be a recurring theme for 2021: eye-popping year-over-year comparisons.
  • In the U.S., consumer price data are to be released on Tuesday. On Wednesday, the Federal Reserve’s Beige Book (a collection of qualitative information from across the country) will be released. Then on Thursday, retail sales and industrial production numbers for March will be released. On Thursday night, China releases its gross domestic product for the first quarter and its industrial production and retail sales numbers for March. The week wraps up with the release of U.S. building permits, housing starts, and consumer sentiment numbers on Friday.

Thanks for reading, stay informed!

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