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Key Events That Moved the Market in Mar 2021
The following is a review of US and world events from the last month. Please be advised that this content is based upon the opinions and research of GFF Brokers and its staff and should not be treated as trade recommendations.
S&P 500 – Daily Chart – Mar 1-23, 2020 (Source: Tradingview)
Monday – March 1
- Stocks rose higher to start the week with the Dow jumping more than 700 points, and the S&P 500 is up 2%, its best day since June of last year.
- Vaccine news from Johnson & Johnsons set the mood for trading early on in the day.
- February PMI came in at 58.6, just a point above consensus.
- The February ISM manufacturing index came in at 60.8, led by new orders and an exceptionally strong build in backlog orders, above expectations of 58.9.
- January construction spending rose to 1.7%, slightly doubling consensus of 0.8%.
Tuesday – March 2
- Indexes took a turn today as inflation fears took hold of the market.
- There are no major economic reports today.
Wednesday – March 3
- Stocks sold off into the close with the tech-heavy Nasdaq leading the way lower.
- The yield of the 10-year Treasury broke above 1,5%, fanning fears of inflation, dragging tech and high growth stocks lower.
- Motor vehicle sales in February came in at 15.7 million, slightly weaker than the expected figure of 16.4 million.
- The February ADP jobs report gave us weaker news with 117,000 jobs in private payrolls, but lower than the expected 165,000.
Thursday – March 4
- US indexes plunged today with the Dow falling 722 points but rebounded to half that amount. The Nasdaq is now down 10% from its high a week ago.
- Much of this has to do with “rate shock” as Fed chief Jerome Powell said in a statement the Fed is willing to tolerate runaway inflation.
- Although Powell’s statement doesn’t deviate from anything he’s said before, investors are worried that the Fed doesn’t see inflation as a bigger deal, and that the central bank may act too late in putting a lid on the impending inflationary surge.
- Jobless claims for the week ending February 27 came in better than expected with only 745,000 new claims versus the 760,000 consensus.
- Non-farm productivity came in higher than consensus at -4.2% versus -4.7%.
- Unit labor costs came in at 6.0% versus the expected 6.7%.
Friday – March 5
- Stocks whipsawed wildly between gains and losses as investors pondered the implications of higher interest rates and inflation, while a stronger-than-expected jobs report helped support sentiment.
- Reporting mid-day, the S&P 500 traded higher, up 1.2% after shedding 1% earlier. The Nasdaq Composite advanced a mere 0.7% in the volatile session. The Dow Jones Industrial Average climbed 350 points.
Monday – March 8
- The Dow staged a decisive rally hitting record highs, advancing more than 650 points before closing up over 300 points. But the S&P 500 and Nasdaq slipped, struggling to not lose their footing.
- Early optimism was boosted by billionaire hedge fund managerDavid Tepper who said he believes that interest rates are set to stabilize and that it’s difficult to remain bearish on stocks.
- Tech stocks, however, still got roiled in what appeared to be a “battle of the big caps.”
- Aside from the market action, there were no major economic reports released.
Tuesday – March 9
- The broader market was off to the races again with the Nasdaq finding enough footing to edge higher.
- Bond yields eased of their recent highs, enough to spark a rally in tech.
- Investors’ nerves were calmed when the 10-year Treasuries proved unable to hold their highs, causing a rotation out of the “reflation trade” back into the tech sector.
- No major economic reports were released today.
Wednesday – March 10
- Stocks soared today with the Dow hitting a record high with two new factors helping move the market forward.
- The first is that tame inflation data via the February CPI, an important consumer inflationary gauge, came in at 0.4% month-over-month, helping calm investors’ fears of rising consumer prices.
- The second is that the 10-year bond auction remained quiet–traders obsessing over the 10-year yields got what they wanted: a boring market.
- Year over year, the figure was 1.7%, also matching consensus.
- Minus food and energy costs, consumer prices were minimally lower than expectations.
- The March Atlanta Fed Business Inflation Expectations, however, were higher–coming in at 2.4%, indicating expectations of higher input costs (and possible consumer price increases).
Thursday – March 11
- The market staged a powerful rally with the Dow and S&P 500 closing at record highs and the tech-heavy Nasdaq wiping out all of its losses for the month.
- Jobless claims weren’t as bad as expected as 712,000 new claims were filed last week versus expectations of 754,000 new claims.
- The January JOLTS report came in surprisingly higher at 6.917 million, as compared with analyst expectations of 6.752 million.
Friday – March 12
- It was a mixed day so far as the broader market but the Dow and S&P 500 managed to end the day with record highs. The Nasdaq ended the day lower after yesterday’s big surge.
- Bond yields are surging once again, rekindling fears that rising rates will take the bounce-back momentum out of equities, especially tech.
- The February PPI came in slightly higher, 0.5% month over month (versus 0.4% consensus), and 2.8% year over year (versus 2.6% consensus).
- Consumer sentiment, however, remains exceedingly bullish, coming in at 83.0, topping analyst expectations of 78.5.
Monday – March 15
- Markets rallied building on last week’s record highs for the Dow and S&P 500, with the Dow riding a seven-day win streak.
- Stocks shook off morning inflation fears sparked by a strong read on NY state manufacturing coming in at 17.4, far above the 14.8 consensus.
- WIth Covid stimulus rolling out to individual households, the next focus is a massive infrastructure bill which saw related sector stocks rise as the figure for that bill has been estimated at around $4 trillion.
Tuesday – March 16
- The broader market pulled back from record highs as investors await tomorrow’s FOMC announcement.
- A softer batch of economic data came in with February retail sales backing off -3.0%, far greater than the -0.5% analysts had expected.
- February industrial production numbers also presented a negative surprise, down to -2.2%, whereas an 0.5% rise was expected.
- January business inventories, at 0.3%, came in just as expected and March homebuilder assessments, coming in at 82, was more or less in line with, though slightly lower than, analyst expectations of 83.
Wednesday – March 17
- The stock market raced higher today with the S&P and Dow both reaching record highs.
- The market was celebrating the Fed’s steady drumbeat of “easy money”–affirming its stance on holding off from rate hikes until at least 2023 and its maintaining a steady flow of stimulus despite worries of rising prices (inflation).
- The Fed also set its full year GDP forecast up 6.5% as the strength of the economic recovery picks up.
- Fed chief Powell carefully and skillfully “threaded the needle,” acknowledging better growth prospects for the nation amid rising inflation, and assuring investors that the recent spike in the 10-year yields were “disorderly” and that any lift-off in inflation will likely be “short-term.”
- This was one of the first instances in which the Fed stated very clear numbers, and apparently, the markets liked what they heard.
Thursday – March 18
- Stocks stumbled following yesterday’s Fed-fueled rally as rising yields continue to weigh on investor confidence despite the Fed’s assurances yesterday that such an event would be short-term and temporary.
- The selling may have been a bit on the technical side as the 10-year Treasury yield reached 1.7%, the highest level since January of last year.
- And with tech stocks underperforming, Covid lockdown news from Europe added to the markets pessimism.
- New jobless claims numbers brought in 70,000 more claims than expected; while economists forecasted 700,000 new claims, the economy showed 770,000 new claims.
- However, the March Philly Manufacturing Index did come in stronger at 51.8 when 24.0 was expected.
Friday – March 19
- Stocks capped off the week with modest losses across the board.
- The Dow fell in response to the Federal Reserve’s decision to not extend a pandemic-era capital break for banks, stoking a rise in bond yields and a sell-off in financials.
Monday – March 22
- The broader market kicked off the new week on a positive note with all three indexes logging in healthy advances.
- The Nasdaq was today’s biggest outperformer as bond yields retreated ahead of this week’s bond auctions (the familiar story being: yields go down, and tech stocks go up).
- February existing home sales showed modest decline, coming in at 6.220 million, slightly below the expected figure of 6.500 million–though down -6.6% month over month, home sales are up 9% year over year.
Tuesday – March 23 (mid-day)
- Reporting mid-day, the stock market fell slightly, one year from the bull market’s re-emergence post pandemic bottom, as investors took some profits in shares that will benefit the most from the reopening of the economy.
- Mid-day, the S&P 500 fell 0.2%, pressured by industrials and materials, while the Dow Jones Industrial Average dipped 110 points. The tech-heavy Nasdaq Composite slid 0.4%.
- New home sales slid to 775,000, down from the anticipated consensus of 875,000