Sense of calm in global equity and bond markets

Apr 09, 2021 | Elinesky Schuett Private Wealth Management


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In our featured economic commentary this week, we discuss the recent calm in global equity and bond markets, sector rotation, and the divergent paths that we are likely to see through the rest of the year.

In addition to our economic commentary, we’ve included two other economic updates and one cybersecurity article that may interest you:

  • Video: Third wave and economic news in North America, Europe and India
  • Podcast: First Quarter Review
  • 2 Minutes: Smishing

Do you want to hear the latest economic news from a leading industry expert? Don’t miss the next event in the Elinesky Schuett Speaker Series, 2021 Global Update: A new investment order, featuring Kurt Reiman. Event details and your RSVP link are below.

As always, we end our weekly blog post with a few good news stories from in and around our community.

Your economic update

There has been a sense of calm in global equity and bond markets of late. Gauges of broad market volatility now sit near levels not seen since before the pandemic began more than a year ago. This development has been encouraging as it has come in the face of another wave of COVID-19 spreading across the globe. We provide an update on the virus situation below, and discuss the divergent economic paths that countries may experience as we move through the rest of the year.

Coronavirus update

The past few weeks have been characterized by an acceleration of COVID-19 cases across the world. Unlike prior waves, this one is being fueled by variants of the virus that are exponentially more transmissible, infecting younger people and leading to a surge in hospitalizations in some jurisdictions. This is particularly the case in Canada, which has seen its seven-day average rate of new daily infections rise to nearly 6,500, versus the 4,500 from two weeks ago. Ontario represents close to half this figure, but Alberta and British Columbia have seen cases meaningfully accelerate, and Quebec’s growth rate is not far behind. Most of these provinces have implemented new lockdowns or restrictive measures with the hope that levels could plateau in a few weeks from now. Saskatchewan and Manitoba have also seen increases, though to a lesser degree. Fortunately, new daily infections have not increased much in the Maritimes and Northern Territories. 

In Europe, the news is somewhat mixed. There are some early signs that cases may have peaked in some countries given the lockdowns implemented weeks ago, but some continue to report new highs in daily fatality rates. Elsewhere, Japan’s infection rate is on the rise, Brazil’s figures have come off a recent peak but remain elevated, and India recently reported a record high of more than 130,000 new daily infections.

Encouragingly, the U.S., U.K., and Israel continue to see limited acceleration in new infections, suggesting that a combination of vaccinations and previously high infection rates may be limiting the opportunities for the virus to spread. Nevertheless, it may be too early to claim victory as new cases remain elevated, and a handful of U.S. states are experiencing meaningful increases in infections, driven by the same variants that have taken over in Canada.

Divergent paths

The resurgence of the virus around the world in recent weeks may have played a role in curtailing some of the inflation concerns and bond volatility that surfaced earlier this year. As a result, the last few weeks have seen some sector rotation in the global equity markets. The strong rally in cyclical parts of the global equity market – energy, mining, banks, and industrial companies for example – has stalled a bit, while areas like technology and other so-called growth stocks have stabilized and seen some gains as of late. In turn, this rotation has driven some recent outperformance of the U.S. equity market relative to others.

Investors have acknowledged that a simultaneous re-opening of most economies around the world is unlikely to occur, and instead we are likely to have divergent re-openings and economic trajectories throughout the course of the year. The U.S. and U.K. may initially lead on the growth front, while other economies falter given renewed measures put in place and slower vaccination rollouts. But investors are looking past the near-term headwinds, believing that lockdowns and mass inoculations will eventually prevail, allowing regions like Europe, Canada, and Asia to catch up and propel a stronger tailwind for economic and earnings growth towards the end of the year.

We suspect that the volatility in bond yields and concerns around inflation have not completely disappeared, and may resurface when some of the incoming data over the next few months reveal that the economic recovery is gaining steam and global breadth. That may once again reignite an intense debate around whether central banks, like the U.S. Federal Reserve, will have to tighten monetary policy earlier than they have indicated.

Third wave and economic news in North America, Europe and India

While the third wave of new variant infections persists, RBC Global Asset Management’s Chief Economist Eric Lascelles observes promising economic data in North America. He also examines economic weakness in Europe and India in particular, where updated infection numbers have emerged.

Use this link to watch the video online: Third wave and economic news in North America, Europe and India

Third wave/ Rapid vaccinations/ Good econ news/ Europe's underperformance/ India

Watch time: 13 minutes 58 seconds


Podcast: First Quarter Review

Two businessmen smiling in a boardroom. Text: First quarter review. RBG Global Asset Management

From accelerated vaccine rollouts to rising bond yields, Stu Kedwell, Co-Head of North American Equities with RBC Global Asset Management, recaps the events of the first quarter in this podcast. Stu also shares his thoughts on where interest rates could go for the rest of the year, and what investors should consider.

Listen to the podcast online: First Quarter Review

(9 minutes, 22 seconds)


You’re invited! 2021 Global Outlook: A new investment order
April 28, from 1 p.m. to 2 p.m.

Please join us for the next online event in the Elinesky Schuett Speaker Series, 2021 Global Outlook: A new investment order, featuring our special guest speaker Kurt Reiman.

Kurt will be sharing his expertise and insight during this special online event, providing an updated 2021 Outlook that will focus on three main themes:

  • The New Nominal
  • Globalization Rewired
  • Turbocharged Transformations

You can read Kurt’s full biography on our website: 2021 Global Outlook: A new investment order, featuring Kurt Reiman


Kindly RSVP by Monday, April 26, using the link below.

Elinesky Schuett Speaker Series: 2021 Global Outlook: A new investment order. Wednesday, April 28, 2021, 1 p.m. - 2 p.m., Your host: Elinesky Schuett Private Wealth Management. RBC Wealth Management and RBC Global Asset Management logo. Photo of Kurt Reiman, Senior Strategies for North America, BlackRock



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Community Corner

Each week, we like to end our posts with a few good news stories from in and around the community. We hope that they brighten your day!

As always, we are available to connect with you personally. Please don’t hesitate to contact us at 519-822-2024 or