Citi Personal Wealth Management

April Acceleration

Monthly Market Snapshot: April 2021

Highlights

Technology stocks recovered as long-duration interest rates stabilized. In the United States, the NASDAQ surged 5.4% as the 10-year U.S. Treasury yield fell from 1.74% at the end of March to 1.63% at the end of April. The S&P 500 jumped 5.2% while the Dow Jones rose 2.7%. Japanese shares underperformed as the region implemented COVID restrictions once again. Emerging markets added 2.4% in the month. Fixed income returns improved, but remain largely negative year-to-date.

U.S. economic data have been coming in very strong with the economy growing by an annualized rate of 6.4% in the first quarter of 2021 and the labor market adding 916,000 jobs in March. However, total employment remains over 8 million jobs lower than it was in February 2020. This should leave monetary policy very accommodative for some time. Fiscal policy also remains supportive with an infrastructure plan likely to be passed. Though such a plan will likely include some tax increases for wealthy individuals and corporations.

Citi’s Global Investment Committee decided to reduce its global equity allocation from a +10% weighting to a +8% weighting. Fixed income was raised from -9% to -7%. Within equities, the GIC reduced its overweight in global small- and mid-cap shares and large-cap developed equities, including the U.S.