After another busy week, its time to wrap up.

Global stock markets have climbed new peaks as more evidence emerges that the economic recovery from the pandemic is strengthening.

Britain’s FTSE 100 index has closed over 7,000 points for the first time since the early days of the pandemic over a year ago, while Wall Street and the Europe-wide Stoxx 600 indices have hit new records.

Analysts said clearing the 7,000 points mark was a major milestone in the indices recovery, with some predicting further gains this year.

Today’s rally came after China recorded its fastest year-on-year growth ever, with GDP over 18% higher than in the first quarter of 2020. Chinese retail sales surged over 30% year-on-year in March, while factories also posted double-digit gains.

But some analysts were more cautious, pointing out that quarterly growth had slowed to just 0.6% in Q1.

In other news...

• Morgan Stanley has revealed that it lost over $900m in the collapse of Archegos last month, taking the shine off record profits in the last quarter.
  
  
• Exports from the UK into the European Union have almost halved so far this year, compared to January-February 2020.
  
  
• US housing starts have hit their highest level since 2006, surging last month as America’s economy strengthened
  
  
• US consumer confidence has also rise, although concerns about inflation are also up
  
  
• Ocado has invested £10m in a self-driving vehicles company to drive its ambition to make autonomous grocery deliveries and develop “kerb-to-kitchen robots” to drop off shopping in homes.

• Online second-hand tech reseller MusicMagpie is flocking to the London stock market, and aiming for a £200m+ valuation.
  
  
• UK retailer Marks & Spencer is facing a backlash over its plan to “do good for the environment” by releasing 30 million honeybees into the British countryside
  
  
• Workers on zero-hours contracts and other insecure jobs are twice as likely to have died of Covid-19 as those in other professions, according to a report revealing stark inequalities in the workplace.
  
  
• Shoppers are expected to flood to high streets and shopping centres in England and Wales this weekend after a bumper week, particularly for clothing and homewares sales, as people make the most of the reopening of non-essential stores.

So whatever you’re doing, have a lovely weekend. GW

The London stock market has closed for the week.... with blue-chip stocks at their highest level since the market crash over a year ago.

The FTSE 100 index has closed at 7019.5 points, a gain of 36 points or 0.5% today, amid ongoing hopes of a strong economic recovery from the pandemic.

That’s its highest close since the last few days of February 2020, when the first wave of Covid-19 cases in Europe triggered market panic, as lockdowns began in Italy.

But it still leaves the Footsie short of its pre-pandemic levels, unlike the US and German stock markets, for example, which are at new records.

Steel maker Evraz (+3.2%) finished on top of the FTSE 100 risers, followed by supermarket chain Tesco (+3.3%) and retailer Next (+2.8%). Banks and miners also had a good day.

But the London Stock Exchange Group itself was the top faller, down 2.5% following Sky’s report about a pay revolt.

The smaller FTSE 250 index, which contains medium-sized firms and is more domestically focused, ended at a new record high of 22,522 tonight.

The odds of a major revolt over the London Stock Exchange Group (LSEG) boss’s pay package have shortened after an influential advisory group recommended opposing it, Sky News is reporting.

Here’s the story:

Sky News has learnt that Institutional Shareholder Services (ISS) has urged investors to vote against LSEG’s remuneration report following its decision to hand chief executive David Schwimmer a 25% increase in his base salary.

The recommendation means a substantial minority of shareholders in the company are likely to vote against Mr Schwimmer’s pay deal, according to City sources.

More here: London Stock Exchange owner braces for backlash as advisor urges pay revolt

Shares in the LSE Group are down 2.3% this afternoon, the top faller on the FTSE 100 (as it heads for a new one-year high).

US consumer confidence has risen to its highest level since the pandemic.... but worries about inflation are also higher.

The University of Michigan’s consumer sentiment index has jumped to 86.5 this month, up from a final reading of 84.9 in March.

That’s the highest in a year, although weaker than expected (economists polled by Reuters had forecast a rise to 89.6).

The survey’s barometer of current economic conditions rose to 97.2 from 93.0 in March, while the gauge of consumer expectations was unchanged at 79.7.

It’s another sign that the US economy is strengthening, as vaccine rollouts allow businesses to reopen and take on more staff.

But the survey also shows Americans are anticipating paying higher prices; the survey’s one-year inflation expectation jumped to 3.7% from 3.1%, as this tweet shows:

We have more strong economic news from the US, with new housing projects hitting their highest level in 15 years.

Housing starts surged 19.4% in March, month-on-month, to a seasonally adjusted annual rate of 1.739 million units, the highest level since June 2006.

That suggests construction activity rebounded strongly from February’s winter disruption, even though supply shortages have been pushing up prices of raw materials like lumber.

On an annual basis, housing starts were 37% higher than in March 2020 (when the first wave of the pandemic hit the US economy).

The number of new building permits, for future construction work, rose by 2.7%.

US bank Morgan Stanley has revealed it lost over $900m in the collapse of Archegos last month, but still beaten profit forecasts with a surge in earnings last quarter.

Morgan Stanley has reported that net revenues surged to $15.7bn in the first quarter of 2021, up from $9.8bn a year ago.

Net income jumped to $4.1bn, or $2.19 per share, more than double the $1.7bn, or $1.01 per share, seen last year.

Morgan Stanley’s institutional securities division reported record net revenues, with investment banking benefitting from strong global dealmaking.

The Reddit-fuelled boom in share trading also boosted activity at its equities division, in a quarter that saw the GameStop short squeeze fuel interest in so-called ‘meme stocks’

But.. Morgan Stanley also flags that a “single client event in the quarter” has caused losses totalling $911m.

It says:

Equity net revenues increased from a year ago reflecting strong performance across products and geographies, with notable strength in derivatives, driven by continued client engagement and elevated volumes.

The current quarter includes a loss of $644 million related to a credit event for a single prime brokerage client, and $267 million of subsequent trading losses through the end of the quarter related to the same event.

They don’t identify the client, but Morgan Stanley is known to have been a prime broker for Archegos, the family office which blew up in March after being hit by margin calls.

That triggered a fire sale of assets, in which rival bank Credit Suisse was left with a loss of $4.7bn (it reported earlier this month).

James Gorman, chairman and chief executive officer, says Morgan Stanley is ‘very well-positioned’ for future growth:

“The Firm delivered record results. The integrated Investment Bank continues to thrive. We closed the acquisition of Eaton Vance which takes Investment Management to over $1.4 trillion of assets.

Wealth Management brought in record flows of $105 billion. The Firm is very well positioned for growth in the years ahead.”

That follows strong results from Goldman Sachs, JP Morgan and Bank of America earlier this week.

Today’s FTSE 100 gains extend a strong rally that began almost six months ago.

The Footsie ended October at around 5,600 points, as the second wave of Covid-19 weighed on the UK economy after the summer bounceback.

As this chart shows, it then surged in early November:

The first trigger was the US election, with Joe Biden’s win clearing the path for massive new stimulus spending.

Then days later, the dramatic news that Pfizer’s Covid-19 vaccine had shown 90% efficacy in trials, which send global stocks soaring.

The avoidance of a no-deal Brexit has also helped.

Nick Peters, multi asset portfolio manager at Fidelity International, says London stocks could outperform, having lagged behind other markets.

We’re broadly positive on UK equities relative to other markets, now that Brexit negotiations are behind us and the vaccine roll-out has been stronger than expected. Whilst we’re not out of the woods yet, economic data has surprised to the upside this year, and a strong domestic economy should particularly benefit the FTSE 250.

“The UK equity market’s composition is also highly tilted towards more cyclical sectors (in contrast to other equity regions which had fared better during the worst of the pandemic period last year). Recent performance has been positive in the UK, but valuations still look reasonable compared with some other areas of the global equity market, particularly certain sectors such as energy and financials. As the global recovery becomes more entrenched, fuelled by continued fiscal stimulus and ultra-loose monetary policy, we think this should translate into continued positive UK equity market performance.”

The FTSE 100 is continuing to rally to new pandemic highs, as recovery hopes lift stocks in London.

The blue-chip index has now risen to 7037 points, up around 53 points or 0.75% today. That extends its earlier gains, and is still the highest level since late February 2020.

Telecoms group BT has now claimed the top risers spot, ahead of mining group Anglo American, consumer credit score operator Experian and airline group IAG.

Banks are also rallying, reflecting optimism about the economic recovery from the pandemic.

Alastair George, chief investment strategist at Edison Group, says the vaccine rollouts, support from governments and central banks, and strong company results have all lifted stocks.

“This recovery in the UK equity market is a testament to the policy response to the COVID pandemic, both here in the UK and across other developed markets. It’s also proof you do not need to reach for yield or pursue esoteric investments to get good returns.

Science is progressively taming COVID-19, earnings forecasts continue to rise and the fiscal and monetary policy settings are still running at full bore. The UK market is also well-represented in more cyclical names benefiting from the “re-opening trade”.

Provided vaccination programs can stay one step ahead of the virus, this rally is on firm foundations in our view as valuations still look attractive relative to other equity markets and the still ultra-low rates on long-term bonds.”

UK exports to the European Union have almost halved so far this year, widening the EU’s surplus with the United Kingdom.

Statistics body Eurostat reports that in the first two months of 2021, following the end of the Brexit transition period, both EU exports to and imports from the United Kingdom “dropped significantly”.

UK exports into the EU are down 47% in January and February, to €16.6bn (£14.4bn) from €31.3bn (£27bn) in the first two months of 2020.

EU exports into the UK have held up better, down 20.2% to €39.8bn from €49.9bn a year ago.

That may reflect the fact that Britain chose to phase new checks on EU imports, giving hauliers and business more time to adapt, while the EU implemented them on January 1st, meaning UK exporters faced new paperwork and red tape.

As a result, the EU’s trade surplus with the UK has risen to €23.2bn in the first two months of 2021, from €18.6bn a year ago.

Trade between the EU and other major countries, such as the US, Japan and Russia, has also fallen this year amid the pandemic - but not as sharply as with the UK, as this table shows:

This is an improvement on January’s data. In the first month of this year, UK exports to the EU plunged by 59.5%, with a 27.4% drop in goods coming into the United Kingdom from the European Union.

Here’s the full report.

Earlier this week, the UK’s Office for National Statistics reported a ‘partial’ recovery in UK exports to the EU in February, after January’s slump.

Online grocer Ocado are also among the FTSE 100 risers, up 2%, after investing £10m in self-driving vehicle company Oxbotica.

My colleague Mark Sweney explains:

Ocado has invested £10m in a self-driving vehicles company to drive its ambition to make autonomous grocery deliveries and develop “kerb-to-kitchen robots” to drop off shopping in homes.

The online grocer, which has previously tested a prototype self-driving truck delivering food and snacks to customers in south-east London, has moved to strike a commercial partnership with Oxford-based Oxbotica, which developed the truck.

Ocado, which will take a seat on Oxbotica’s board, said the technology could be used for “last-mile deliveries and kerb-to-kitchen robots”. The trials in Greenwich, London, in 2017 used a small “CargoPod” that holds eight boxes and required customers to leave their houses to pick up their shopping.

Investors are growing more optimistic about the UK stock market as the Covid-19 recovery continues, says Adam Vettese, analyst at multi-asset investment platform eToro:

“While the FTSE 100 continues to be a laggard in international terms, the fact it has broken through the 7,000 mark for the first time since February last year can be read as a sign of cautious optimism among investors.

“The UK’s blue-chip index is now more than 40% higher than it was at the worst of last year’s sell-off, although growth has stagnated in the past week or so.

“With the vaccine roll-out fairly advanced and talk positive about the future state of the economy, investors are once again seeing opportunity rather than threat in UK shares.

“The FTSE 100 is often derided for its ‘old world’ constituents, but it is these miners, banks, oil companies and airlines that will power the recovery and investors are beginning to wake up to that.

“Add in the fact that UK shares are looking relatively cheap when compared with other developed markets, and the investment case becomes quite compelling.”

Britain’s FTSE 100 index has hit its highest level since the pandemic crash over a year ago.

The blue-chip index of top shares has jumped over the 7,000 point mark in early trading in London, gaining over 0.5% to 7024 points.

That’s its highest level since late February 2020, when the first wave of Covid-19 infections sent share prices plunging.

Most sectors are higher this morning, led by the basic materials, financials and industrials sectors.

Top risers includes steel maker Evraz (+2.7%), packaging firm Mondi (+2.4%), Barclays bank (+2.2%) and mining giants Anglo American (+1.5%) and Antofagasta (+1.3%).

The smaller FTSE 250 index, which contains medium-sized companies, has hit a new record high in early trading.

With global markets near record peaks, it underlines that investors continue to anticipate an economic recovery from the pandemic thanks to vaccine rollouts, and government stimulus.

China’s latest GDP report shows that its economy is recovering (although growth did slow quarter-on-quarter) while yesterday’s extremely strong US retail sales and jobless claims figures have shown that America’s economy is bouncing back.

UK-focused stocks have benefitted from the prospect of lockdown measures easing, with non-essential shops and hospitality reopening on Monday.

Julian Evans-Pritchard, senior china economist at Capital Economics, cautions that China’s recovery could level off this year.

“The upshot is that with the economy already above its pre-virus trend and policy support being withdrawn, China’s post-COVID rebound is levelling off.

We expect quarter-on-quarter growth to remain modest during the rest of this year as the recent boom in construction and exports unwinds, pulling activity back towards trend.”

Kyle Rodda of IG says the economic data is a little mixed -- and suggests the surge in retail sales in March [34.2% year-on-year] could concern the People’s Bank of China,

GDP growth year-over-year expanded by the 18.3% forecasters had tipped, but industrial production and fixed asset investment missed estimates.

Retail Sales shot the lights out, although that mightn’t be seen as a totally good thing from the market’s perspective – with very hot consumer sentiment perhaps a reason for the PBOC to tighten financial conditions further and remove support for the markets.

Simon Rabinovitch of The Economist also flags that China’s quarter-on-quarter growth (+0.6%) was much more modest than the annual change.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

The economic recovery from the pandemic continues today, with China reporting its strongest economic growth since records began nearly three decades ago.

The world’s second largest economy expanded by a record-breaking 18.3% in the first quarter of 2021 compared to a year earlier, when the coronavirus outbreak forced strict lockdowns and travel restrictions.

That’s the best year-on-year growth since 1992, when China started publishing such figures, and up from 6.5% in the last quarter of 2020.

However, on a quarter-on-quarter basis, the Chinese economy grew by a more modest 0.6% in the January-to-March period - slower than expected.

The recovery was driven by a surge in consumer spending -- retail sales surged by 34.2% year-on-year in March, beating forecast of a 28% rise.

China’s factories also benefitted from the pick-up in global demand, with output rising by 14.1% year-on-year in March. However, that is down on the 35.1% surge seen in the January-February period, suggesting growth may be moderating.

“The national economy made a good start,” National Bureau of Statistics spokesperson, Liu Aihua, told reporters on Friday.

Liu also flagged that the strong growth was also due to a low base effect (as the economy contracted so sharply a year ago), as AFP explains:

The sharp spike was partly due to “incomparable factors such as the low base figure of last year and increase of working days due to staff staying put during the lunar new year” holiday, said Liu.

But she added that quarter-on-quarter growth has “demonstrated a steady recovery”.

With the US also reporting a near 10% surge in retail sales last month, and a fall in new jobless claims, the global economic recovery appears on track for a solid recovery this year.

That pushed Wall Street to fresh record highs overnight, with the Dow Jones industrial average breaking through the 34,000-point mark for the first time.

Ipek Ozkardeskaya, senior analyst at Swissquote, points out that US bond yields actually fell back yesterday, suggesting investors put aside recent worries that central banks could tighten monetary policy to fight inflation.

Was it because the abnormal rise in retail sales was the direct result of the latest stimulus checks – which certainly is, and should not last to have a durable impact on inflation expectations, or was it because there are still 8 million jobless Americans that need to find a job before the Fed decides to tighten its purse’s strings is yet to be seen.

But the enthusiasm regarding the very good data somewhat surprised and brought many to conclude that Jerome Powell is doing a great job keeping the market hypnotized, or simply high on excess liquidity.

More reaction to follow.

The agenda

• 10am BST: Eurozone inflation for March (final estimate)
• 10am BST: EU trade data for February
• 1.30pm BST: US building permit and housing starts for March
• 3pm BST: University of Michigan Consumer Sentiment survey for April