In 2021, stock markets at their historical levels

Not even afraid. As the world worries about the impact on economic activity of the Omicron surge, almost all financial markets are celebrating. After a chaotic year 2020, where the stock markets had collapsed by around 40% in a few weeks, with the arrival of the Covid-19 epidemic, to then recover, they seemed in 2021 to be immune to the successive appearance of new variants of the disease. “The financial markets should have known a depression similar to that of the 1930s at the start of the health crisis in 2020, but this was not the case thanks to the intervention of the States and to the fiscal stimulus measures which kept at the economy is flowing “, explains Colin Graham, portfolio manager at international asset manager Robeco.

Like the New York market, whose S&P 500 index is at historic levels and has increased by more than 27% since the 1er January 2021, the main stock exchanges experienced almost continuous increases throughout the year. “The markets were driven by a spectacular economic recovery, stimulated by unprecedented budgetary and monetary support. Corporate profits thus soared by nearly 45% in the United States and 65% in the euro zone ”, summarize Jean-Marie Mercadal, Head of Investment Strategies, and Eric Bertrand, Deputy CEO, both at OFI.

In the United States, all the major indicators are at their highest: the Dow Jones gains 18%, to 36,488.63 points, and it is the Nasdaq 100 index, rich in technology stocks, which shows the strongest annual increase with a gain of more than 28%, ending at 15,766.22 on December 29. “The tech sector has clearly been one of the big winners during the pandemic, with periods of lockdown leading consumers and businesses around the world to turn to technology solutions that keep shopping and shopping. work from home “, observes Norman Villamin, investment manager for private banking at the Private Banking Union.

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The American stock market, which had been in the lead, boosted by an accommodating monetary policy for more than a decade, nevertheless saw its momentum slowed down by the change in attitude of the Federal Reserve concerned by the return of inflation. “Supply chain bottlenecks and labor shortages, along with the release of unmet demand, have driven up prices throughout the economy and pushed inflation to rock bottom. levels that we had not seen for more than ten years ”, notes Matt Peron, director of research at Janus Henderson.

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