Stocks continue to rally on strong economic news while bonds consolidate
Global stock markets continued to rally in April on positive economic news and in the face of rising fears of a new wave of COVID-19 infections. The vaccine distribution has been encouraging and it appears it will be effective in stopping the virus once everyone has access. In the U.S., individuals over 65 have been prioritized for vaccinations, and in turn their case counts and hospital admissions have been significantly lower than the rest of the population.
Despite higher commodity prices and strong inflation data, global bond markets consolidated last month. Bond yields held steady as incoming economic data merely confirmed the economic rebound, implying the bar for inflation surprises is set very high. Going forward it will be important to watch whether supply constraints or increased demand are driving inflation readings higher.