Read our market review and find out all about our theme of the week in MyStratWeekly with our experts Stéphane Déo, Axel Botte, Aline Goupil-Raguénès and Zouhoure Bousbih.
Topic of the week: SPAC, blank-check bets and financial mania
- Excess liquidity always fosters financial innovation, that may turn out to be destabilizing;
- SPAC are blank-check investment vehicles set up to finance acquisitions of promising companies and list them rapidly in stock markets;
- SPAC are now drawing attention from regulators due to embedded risks stemming from information asymmetry between SPAC sponsors and investors;
- Recent SPAC price may signal that investors have become more cognizant of risks of shareholder value destruction.
Market review: Spring break
- Equities off to strong start in 2Q
- Supply chain pressures and geopolitical risks weigh on the outlook
- Stable bond yields, some pressure on Italian
- High yield outperformance continues
USA: quarterly equity funds inflows (Bn $)
The volume of purchases in the United States on equity funds has largely beaten their record: 313 billion dollars in the first quarter of this year while the previous all-time high was «only» 142 billion.
A significant part of household savings has therefore been invested. This may be a signal that this savings will not be spent as much as some hope. It is also a signal of market overheating that echoes our theme of the week on SPACs.
Figure of the week
Sharp increase in US GDP growth expected by the IMF at 6.4% in 2021. That is +1.3 point higher than the Jan forecast. And +3.3 pp higher than the Oct one.
The Biden stimulus convinced the IMF.
To go further