The Week in Review
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- Soaring yields push tech shares lower
- Europe struggles to respond to the virus crisis
Another volatile week went down rattled by a surge in bond yields in the US and rising coronavirus cases and vaccination hurdles in Europe. The main event, the Federal Reserve press conference, renewed investors fears that the Fed will allow the economy to run hot before leaning against it. Jerome Powell, Federal Reserve Chairman reiterated the central bank will continue its bond purchase program at the rate of $120bn per month until “substantial further progress” is realized. In addition, the Federal Reserve decided to leave the interest rate unchanged and to maintain the ultra-loose monetary policy so that the US economy could go through a quicker recovery.
The stock market experienced renewed jitters this week as investors rotated their exposure to value stocks, causing the high-growth tech sector to drop. On Thursday, the Nasdaq Composite slipped over 3%. The same day the S&P500 dropped roughly 1.5%, just a day after it notched a fresh record close at 3,974.12.
Covid-19 speeds up in the US, slows down in the EU
In Europe, member states continue to be at odds over whether to give the AstraZeneca vaccine to the population. On Thursday, the EU’s top health regulator, the European Medicines Agency, published a report where it said the benefits of the vaccine outweighed the risks. The agency ruled out the vaccine is “safe and effective”, despite recent concerns over its potential adverse health effects. The investigation by the agency concluded that the rare cases of blood clotting could not be linked to the vaccine, although “it is possible and deserves further analysis”. A number of countries have said they will restart their AstraZeneca vaccination program, among them Germany, Italy, the Netherlands, Belgium and Spain.
Meanwhile in Washington, President Joe Biden celebrated the milestone of 100 million Covid-19 vaccine doses administered in the first 100 days of his Presidency. “I’m proud to announce that tomorrow, 58 days into our administration, we will have met my goal,” said Joe Biden in a brief speech on Thursday. The White House said the US plans to send a total of 4 million doses of the AstraZeneca coronavirus vaccine to Canada and Mexico. The vaccine produced by AstraZeneca, a British-Swedish company, in partnership with Oxford University is not yet authorized for use in the US.
On the cryptocurrency front, bitcoin alleviated some of the pressure as the week progressed. The start of the week turned out to be a difficult time for the number one digital asset as it dropped to a weekly low of $53,200. Bitcoin spent the next few days trying to recreate another run towards the $60,000 mark. For the most part of the week, bitcoin hovered between $55,000 and $60,000.
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