ECONOMIC AND MARKET OVERVIEW
Global
In the first week of February, US GDP data was released, showing that real GDP in the US in 2020 was down 3.5% from 2019, the worst performance since 1946.
However, the US economy might have turned the corner according to Sanlam Investments’ February Market
Review Retail sales picked up substantially from December to January, possibly driven by the latest US
stimulus program, which included $600 billion of direct payments to individuals and unemployment
insurance Unlike the stimulus packages distributed early in 2020 which were largely saved (or used to drive
up Tesla and GameStop’s share prices to dizzy heights), recipients seemed to spend a large portion of their money this time around In addition, new infections dropped sharply in January, making it safer to go out again US sales data also show a radical shift in consumer behaviour sales at non store retailers were up 28.7% compared to a year ago.
The structural shift to digital platforms boosted the revenue for many of the large players in this sphere Alphabet reported strong quarterly advertisement sales, buoyed by heavy digital advertising spending during the holiday shopping quarter YouTube ad revenue jumped 46% to $6.9 billion. The virtual world is not without disagreements though In a digital stare down, Facebook blocked several news pages in Australia in retaliation to a planned law to force Facebook and Google to pay Australian publishers for news content.
In the United Kingdom, Chancellor of the exchequer Rishi Sunak delivered his second budget speech on the 3rd of March The economic lockdown as a result of the Covid 19 pandemic has had a significant impact on the people and economy of Great Britain Despite the government’s furlough scheme and other measures used to protect jobs, more than 700 000 people lost theirs in the last year Their economy shrunk by 10% (the true definition of decimation) which is the largest contraction in 300 years, and never has the UK borrowed so much money, outside of wartime, as they have done now Like many other developed countries they are likely to have a strong rebound in 2021 and should be back at pre Covid levels of economic activity by the end of 2022. A factor that should surely support the economic recovery in the United Kingdom is their current rate of vaccinations After Israel and the United Arab Emirates the UK is well ahead of other countries in administering the vaccine to their adult population The stark contrast in access to vaccines between developed and developing countries will be a key factor in the unbalanced global economic recovery that is in progress.
