Bearish? Bullish? It’s MAYHEM
Welcome back to the Rude Awakening for Monday, March 8, 2021.
We are coming off a wild week last week. It wasn’t bearish, it wasn’t bullish, it was just MAYHEM.
We saw swings in the Dow of 500 points to the upside and downside, and the market is still trying to find its footing.
However, if you look at things from a macro perspective, it doesn’t look quite so scary…
And for a look at today’s activity…
Another Mixed Morning for Stocks
As I write about an hour into today’s session, stocks across the indices are mostly increasing and Treasury yields are climbing. This is mostly thanks to Congress making some headway toward passing the next round of stimulus packages.
As Yahoo Finance reports:
The S&P 500 and Dow each advanced, with the latter adding 150 points, or 0.5%. The Nasdaq added to losses, however, after the index closed out a third straight weekly loss last week amid a drawdown in tech and growth stocks.
The consumer discretionary, financials and materials sectors led gains in the S&P 500, while information technology and real estate lagged.
Treasury yields resurged across the curve, and the benchmark 10-year yield spiked to a one-year high of more than 1.61% after the U.S. Senate passed a $1.9 trillion virus relief package over the weekend, with the additional stimulus seen likely to boost the pace of the economic recovery.
The U.S. House of Representatives is poised to vote Tuesday on the Senate’s version of the stimulus bill, which includes $300 per week in enhanced federal unemployment benefits through early September, $350 billion in state and local aid and $1,400 stimulus checks to most Americans, albeit under tighter income restrictions than had been included in the earlier House version of the bill. The Senate bill, which passed on a party-line vote, is likely to be approved in the House and signed by President Joe Biden before a March 14 deadline, so as to renew pandemic-era federal unemployment benefits from mid-March through early September.
The prospects of a strong recovery enabled by both the ongoing vaccine rollout as well as the historic levels of fiscal and monetary policy stimulus have simultaneously pushed growth forecasts sharply higher, while also stoking concerns over an overly rapid rise in inflation. Jitters over an eruption of price pressures and higher interest rates have recently provoked volatility in equity markets. However, some strategists suggested these fears may be overblown, and that rising rates should be in fact taken more positively as a signal of a firming economic backdrop.
With this background, we have some new stocks to add to the watchlist…
Find out all the details when you tune in for today’s video…
Have a great rest of your trading day.
See you tomorrow.
Editor, Rude Awakening