New York Stock Exchange, S&P 500 index

The S&P 500 hovered near its all-time high on Friday, as U.S. bond yields rose to end the week.

Yields on the 10-year notes rose back above the 1.60% level, as it approached its 1-year high.

The rise in yields has been credited to growing fears of inflation, as producer prices increased last month, leading to the largest annual gain since 2018.

Monthly figures showed that the producer price index was up 0.5% last month, which followed a 1.3% jump in January, which was the biggest rise since 2009.

The S&P 500 was 0.10% higher on the day, closing at 3,943.34.

Related: U.S Indices Rally as Jobless Claims Drop

UK GDP shrinks less than expected

Despite being in lockdown for the past 3-months, today it was reported that Britain’s GDP fell less than expected in that period.

Data from the Office for National Statistics showed that Gross domestic product shark by 2.9% in January, versus an expected contraction of 4.9%.

Overall, the United Kingdom’s economy is around 9% smaller than it was before the coronavirus pandemic began just over a year ago.

As the nation continues to press with COVID-19 vaccinations, it is believed that the economy would shrink by 2% in Q1 of this year.

The FTSE 100 rose on Friday, closing 0.36% higher.

Europe braces itself for “third wave”

Germany’s main index the DAX 30 fell 0.46% on Friday, as it was reported that many believe that they have entered a third wave of COVID-19 infections.

The country had recently started to ease restrictions, as it increased the vaccination program, however today the country’s head of public health, stated infections were again rising.

Lothar Wieler, head of the institute for Infectious Diseases stated that, “We have clear signs that the third wave in Germany has already begun, The virus is not going to disappear, but once we have a base level of immunity in the population, we can control it”.

This comes as Italy has also seen an increase in cases, prompting Prime Minister Mario Draghi’s administration to discuss possible tougher lockdown measures from March 15th to April 6th.

Quote of the day – “Time is your friend; impulse is your enemy.”

– John Bogle

Eliman Dambell

Senior Market Analyst
edambell@tvmarkets.com