Hey Folks, very interesting market is starting to shape up for us. Get my take why and where to next from here.
WEEKLY SOUND BITES;
Major indexes DOW, S&P and the Russell made new record highs early in the week but then lost ground as bond yields reached their highest levels in over a year while energy stocks fell sharply as oil prices saw their biggest daily drop since last summer…the equity rally stalled on Tuesday morning after longer-term Treasury yields resumed their rise—over the next two trading days, the yield on the benchmark 10-year note soared roughly 17 basis points (0.17%) and hit a new pandemic-era high of around 1.75% before retreating a bit…The Fed statement and “Boom-Boom” Powell’s post-meeting press conference forcefully communicated the central bank’s dovish monetary stance as they indicated no rate hikes until 2023 with inflation being transitory…excessive optimism, euphoria, complacency and speculative fervor do create more shorter term market risk…biggest risk now is not COVID but Inflation…
Weekly jobless claims rose unexpectedly to 770,000, their highest level in a month. Industrial production fell 2.3% in February versus consensus expectations for a slight increase, while an index of homebuilder sentiment fell to a seven-month low as housing starts and permits also saw declines. Retail sales excluding the volatile auto segment slumped 2.7% in February, the biggest decline since April’s 15.2% plunge. A positive outlier was a current gauge of manufacturing output in the mid-Atlantic region, which surged to its highest level in nearly five decades.
Bond traders appeared to look past the mixed economic data and focus instead on the potential for higher inflation, leaving longer-term U.S. government bond yields significantly higher for the week.
In Europe we saw that Germany, France, and Poland took steps to contain a surge in coronavirus infections. The UK government said that it may have to slow the pace of coronavirus inoculations amid delays to vaccine shipments from India…meanwhile, the BoE’s policymakers in the U.K. voted unanimously to keep the benchmark interest rate at an all-time low of 0.1% and to continue its existing bond-buying program.
Chinese stocks fell for the week, with the Shanghai Composite Index slipping 1.4% and the large-cap CSI 300 Index shedding 2.7%. Chinese stocks underperformed other Asian markets on Friday after negative headlines about the first day’s talks at the U.S.-China meeting in Alaska, with each side criticizing the other.
Enjoy This Week’s Round-Up;
Don’t Be a Rat Brain Trader – Be the Red Stripe Zebra !!
Trade Smart !
hpb
