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The change in tone from the White House in the last 65 days has been striking. Joe Biden held his first press conference as President yesterday and the atmosphere could not have been more different to Trump’s combative ‘you’re fake news’ and ‘you’re fake news’ pressers. The 78-year-old lacked energy but appeared relaxed; the press was respectful, happy to give him the benefit of the doubt. Mr Biden said he would run in 2024 – aged 82 – and committed to 200m vaccinations in 100 days. He wasn’t asked about the coronavirus – perhaps the one thing he most wanted to talk about since the programme of vaccinations is going so well. Across the pond things are not going so well. EU leaders failed to agree on a way to deliver extra vaccines to member states in the most need. Austria won’t back a deal that excludes them.  


Equity indices are on the front foot this morning after a directionless, choppy merry-go-round of a week. The major bourses edged up by around 0.5-1% in early trade, with the FTSE 100 recovering the 6,700 area and the DAX north of 14,750. The bounce comes after shares on Wall Street staged a late rally yesterday that snapped a two-day losing streak. The S&P 500 closed up 0.5% at 3,909, erasing a 0.9% intraday loss at one point. The Dow Jones Industrial Average rose 200 points, having at one stage been down almost 350pts. US futures indicate Wall Street will open higher.


The Suez Canal remains blocked and it could take weeks to sort out. A high tide this weekend may dislodge it sooner but no one seems to know for sure how long it could last. Shipping companies are starting to reroute LNG around the Cape of Good Hope. Caterpillar said it is facing shipment delays and may airlift parts. It’s reportedly costing $400m an hour in delays. WTI crude retested the week’s lows around the $57.30 region yesterday afternoon before rallying to $60.  


The US jobs market continues to show signs of strength: initial unemployment claims fell to 684,000 last week, the lowest since the start of the crisis a year ago. Nonfarm payrolls next Friday ought to show another handsome rise in new jobs in March similar to the +379K print last time. UK retail sales bounced back in February, rising 2.1%. Online rose to make up a record 36.1% of all sales but overall retail sales were down 3.7% from a year ago.  


Today we have US personal income (seen –7.3%), personal spending (-0.8%), PCE inflation, the Fed’s preferred gauge, (core deflator seen at 0.1%), the Michigan Consumer Sentiment survey (+83.6%) and the Bank of England’s Saunders gives a speech on “Supply and demand during and after the pandemic”. 


Watch yields again after another weak 7-year auction in the US. The yield on the 10-year Treasury is back above 1.66% following the auction, which again showed soft demand for the 7-year paper. The auction of $62 billion in 7-year notes took a yield of 1.3%, more than 10 basis points above February’s soft auction, whilst the bid-to-cover of 2.23 was also low.  


Funds and games 


Deliveroo has hit an ESG wall: the company lost another potential investor as L&G joined Aberdeen Standard, Aviva and M&G in saying it will not take part in the IPO next week. Funds are worried about things like the dual class share structure as well as workers’ rights, not to mention the path to profitability. It seems to be very good at delivering food and very good at burning cash. Institutional support is not necessary to get this IPO off very nicely for Shu and Amazon, but I would be questioning the sustainability of the kind of valuations an £8bn+ market cap implies. 


GameStop shares rallied over 50% on Thursday after their 30% decline post-earnings earlier this week. For this we can thank/blame Jefferies analysts Stephanie Wissink and Anna Glaessgen, who raised their price target on the stock to $175 a share from $15, hailing the company’s push towards online sales. “Our thesis is simply that rebalancing sales away from video game software/hardware will deliver superior gross margins,” they say, adding that “if the company “successfully sheds its retail heritage” and morphs into a digital commerce powerhouse its valuation could rival other purely online businesses. Meanwhile Wedbush raised its PT to $29 from $16 and Telsey Advisory cut its from $33 to $30. Quite where these numbers come from, I have no idea. Who needs a Monte Carlo valuation…? 


Talking of which…Cathie Wood’s space-focused ETF could launch as early as next week, Bloomberg reported. It comes as Wood’s own star shines a little less brightly after the flagship Innovation ETF fell by almost 30% in the last month. The ARKX fund will invest across four areas: Orbital aerospace companies that launch, make, service, or operate platforms in orbital space, which include things such as satellites and launch vehicles; Suborbital aerospace companies are similar, but not as high in the sky, and might include drones, air taxis and electric aviation vehicles; Enabling technologies companies are those that create the kit for aerospace operations, including artificial intelligence, robotics, 3D printing, materials and energy storage; Aerospace beneficiary companies are defined as those that stand to benefit from general aerospace activities, a diverse group that includes agriculture, internet access, global positioning systems (GPS), construction and imaging. Space is clearly going to be one of the most important areas for investors in the coming decade, with exposure to a broad range of technology players in this arena offering good optionality on the future of space travel and the commercial returns that it should deliver. 

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