Stocks suffer as payrolls jump

The narrative of stocks vs interest rates continued last week as bond yields moved higher and stocks pulled back once more, writes Ian Slattery.

Growth stocks, which are in general more affected by higher rates, underperformed and value stocks eked out some gains. On a sector basis, energy outperformed as oil prices rose once more.

Friday’s non-farm payrolls shows that the US economy added 379,000 jobs last month, more than double than in January and the highest since October 2020. The largest gains came in the leisure and hospitality sector, which may be an early indication of the ‘vaccine effect’.

Whilst no doubt a positive figure, US employment is still almost 10 millions jobs below the pre-pandemic level. The Biden stimulus package pass through the Senate on Thursday evening with Vice President Harris casting the key vote following a 50-50 tie on the Floor.

The prospect of the stimulus did little to calm bond yields. Additionally, Fed Chair Powell disappointed markets on Thursday as he offered no new commitments to keep rates lowers, whilst also reconfirming the Fed has no major issue with inflation running above 2% for a period of time.

Vaccine rollout in the eurozone continues to lag the US and UK as Italy blocked 250,000 AstraZeneca doses from departing for Australia. This was the first time newly implemented EU powers have been exercised.

In Germany, Merkel has extended the lockdown until the end of March, although some areas with lower infection rates have been able to open up.

Finally, Brexit unrest continues after Britain unilaterally extended the grace period for border checks with Northern Ireland. The move caused dismay in EU circles who have threatened legal action along with tariffs and fines.


Global markets were down last week by -0.8%in euro terms and - 1.9% in local terms. Year to date global markets are up 4.4% in euro terms and 1.7% in local terms. The influential US market was down by -0.9%in euro terms and -2.1%in local terms.

Fixed Income & FX

The US 10-year yield finished at 1.60% last week. The German equivalent finished at -0.29%. The Irish 10-year bond yield finished at 0.06%. The Euro/US Dollar exchange rate finished at 1.19, whilst Euro/GBP finished at 0.86.


Oil finished the week at $66 per barrel. Gold finished the week at $1,692 per troy ounce. Copper finished the week at $8,913 per tonne.

The week ahead

Tuesday 9th March

Eurozone GDP growth for 2020 is expected to be confirmed at - 5%.

Wednesday 10th March

The latest US and Chinese inflation data goes to print.

Thursday 11th March

No change is expected when the ECB meets for its latest interest rate decision.

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