Hey everyone, price action is searching for direction as we have counter balancing forces moving against each other. Get my take on overall market direction in this week’s Round Up.
WKLY SOUND BITES:
• Major indexes were mixed for the week, as investors seemed to continue weighing optimism about reopening against inflation and interest rate concerns…Small-cap stocks lagged for the second consecutive week, signaling a potential pause or reversal in their recent market leadership…The closure of the Suez Canal because of a disabled cargo ship raised worries about already stressed global supply lines but boosted oil prices and energy stocks.
• This past week brought several downward surprises in economic data, with February existing home sales falling 6.6%, roughly twice expectations, while new home sales tumbled 18.2%, nearly triple consensus estimates…Poor weather and supply chain issues appeared to take a toll on business investment, with nondefense durable goods orders excluding aircraft falling 0.8% in February…The University of Michigan also revised its gauge of March consumer sentiment higher, while weekly jobless claims fell much more than expected and reached a new pandemic-era low of 684,000…and finally, inflation data—perhaps at the top of the list of recent investor concerns—remained muted…Core (excluding food and energy) personal consumption expenditures index increased by 1.4% year over year in February, down from 1.5% in January and still well below the Federal Reserve’s 2% target…we also saw both Federal Reserve Chair Jerome “Power Ranger Boom Boom” Powell and Treasury Secretary Janet “Aunt Bee” Yellen testified before Congress that they saw little danger of an overheating economy…
• The yield on the benchmark 10-year U.S. Treasury note decreased through much of the week but appeared to rise somewhat in response to Thursday’s claims data…Strong overnight buying from Asia provided a tailwind for the investment-grade corporate bond market keeping credit spreads tight…yet the asset class experienced some weakness due to ongoing virus concerns across Europe. Below investment-grade funds industrywide reported negative flows.
• Shares in Europe rose on hopes of an economic recovery, reversing earlier losses stemming from concerns about additional restrictions to curb the spread of the coronavirus and the European Commission’s (EC) threat to halt vaccine exports…Eurozone business activity unexpectedly grew in March, a survey of purchasing managers showed. The flash composite Purchasing Managers’ Index (PMI), which combines services and manufacturing, rose in March to 52.5—the highest level since late 2018—compared with 48.8 in February…
• Chinese stocks recorded a weekly gain, thanks to a rally on Friday after the country’s central bank signaled that it was not about to tighten monetary policy…note this is its first weekly gain after five straight weeks of losses…and finally, China will need to spend USD 6.4 trillion on green power generation to meet President Xi Jinping’s goal of carbon neutrality by 2060 which will increase longer term demand for raw materials like Copper, Lithium and Nickel among others.
Enjoy this Week’s Round-Up;
Don’t Be a Rat Brain Trader – Be the Red Stripe Zebra !!
Trade Smart !
hpb
