Hello everyone, this past week’s price action seemed to put a lot of traders on the wrong side of the markets. For our User Group our trades are doing nicely! Get my take on where to from here;
WEEKLY SOUND BITES
• Major indexes finished mixed as longer-term interest rates continued their ascent…The rise in rates again weighed on growth stocks by increasing the discount on future earnings, while value stocks managed gains…investors seemed divided about whether the rise in longer-term bond yields was due to a welcome upswing in growth expectations or a worrisome increase in inflationary pressures…however, progress in the “unaccompanied minor” Biden administration’s USD 1.9 trillion stimulus package appeared to further bolster growth expectations…many traders this week found themselves on the wrong side of the trade…
• The tension between growth hopes and inflation fears was evident in the market’s reaction to the week’s most closely watched economic data, the February jobs report…The report surprised significantly on the upside, with nonfarm payrolls rising by 379,000, roughly twice consensus estimates…Nearly all the gains came in the leisure and hospitality industry, especially restaurants, reflecting reopening steps in many parts of the country…The unemployment rate also fell a bit more than expected, to 6.2%, a new pandemic-era low. Stocks vacillated on the news: rising, falling, and then rising sharply again…
• Fixed income markets struggled as longer-term Treasury yields resumed their climb later in the week…Later in the week, increased selling from Asia, coupled with Fed Chair “Boom Boom” Powell’s comments regarding inflation, challenged sentiment and contributed to widening spreads (the extra yield offered over Treasuries, and an inverse measure of the sector’s relative appeal)…he didn’t offer any soothing words to suggest Yields should be lower. No talk of yield curve control or Operation Twist…markets were looking for something and got nothing…
• Shares in Europe ended higher, buoyed by the prospect that easing restrictions implemented to curb the coronavirus’s spread and supportive monetary and fiscal policies could set the stage for an economic recovery…German Chancellor Angela “Hard Nuts” Merkel and regional chief ministers extended lockdown restrictions until March 28. However, they also eased the rules in areas with low infection rates…
• Chinese shares fell in choppy trade as rising U.S. yields and inflation expectations spilled into the country’s stock market…Overall, the tone for Chinese stocks was cautious ahead of the annual National People’s Congress (NPC), the country’s highest-profile political gathering that kicked off this March 5…meanwhile, on the economic front, China’s official purchasing managers’ indexes for manufacturing and services in February came in below expectations.
Enjoy this week’s Round-Up;
Don’t Be A Rat Brain Trader – Be the Red Strip Zebra !!
Trade Smart !
hpb
