US stocks hit record high… Vaccine optimism continued to drive a US equities boom last week with the S&P 500 climbing 1.7% to a fresh all-time high, Bloomberg reports. The market saw the biggest single-day gain in three weeks, helped by the US Federal Reserve’s ending of covid-19 dividend restrictions on banks, imposed last year to protect capital reserves.

…as emerging markets enter a correction: Emerging market stocks are suffering a retreat from all-time highs earlier this year amid rising US bond yields and a stronger USD, Bloomberg reports. The MSCI EM Index fell for the fifth consecutive day Thursday, continuing its longest losing run in six months and putting the gauge more than 10% below its peak in February. This marks a reversal of the EM stock surge, which saw investors pour money into riskier EM markets last year.

The hard times look set to continue: “Higher US yields and a firmer USD alongside investors either moving to safer shores or taking profits on past gains are clearly hurting EM equities,” said Mitul Kotecha, chief EM Asia & Europe strategist at TD Securities. “It’s hard to see a reversal in the short term, with pressure likely to be maintained for now.”

Other market news worth knowing:

  • The SEC may be pulling the brakes on the SPAC frenzy amid heightened risk concerns, demanding information from a number of Wall Street banks about their underwriting activities in the SPAC market and how they’re managing risk. (Reuters)
  • WeWork is finally going public through a merger with blank-check company BowX Acquisition, allowing the coworking space provider to conclude an IPO almost two years after its failed first attempt, it said in a statement on Friday.
  • Goldman Sachs has liquidated USD 10.5 bn-worth of stocks in block trades as part of a selling spree that erased USD 35 bn from major companies’ stock values, Bloomberg reports. The guessing game now: Figuring out who was selling.

EGX30

10,870

+1.6% (YTD: +0.2%)

USD (CBE)

Buy 15.69

Sell 15.79

USD at CIB

Buy 15.69

Sell 15.79

Interest rates CBE

8.25% deposit

9.25% lending

Tadawul

9,418

-0.5% (YTD: +8.4%)

ADX

5,727

-0.3% (YTD: +13.5%)

DFM

2,496

-0.8% (YTD: +0.1%)

S&P 500

3,975

+1.7% (YTD: +5.8%)

FTSE 100

6,741

+1.0% (YTD: +4.3%)

Brent crude

USD 64.57

+4.2%

Natural gas (Nymex)

USD 2.56

-0.5%

Gold

USD 1,734.70

+0.4%

BTC

USD 55,990.89

+2.1%

The EGX30 rose 1.6% on Thursday on turnover of EGP 819 mn (44.6% below the 90-day average). Foreign investors were net buyers. The index is up 0.2% YTD.

In the green: Eastern Co. (+7.7%), Fawry (+2.9%) and Heliopolis Housing (+2.6%).

In the red: AMOC (-2.6%), Sidi Kerir (-2.2%) and Export Development Bank (-1.1%).

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