Today’s Market Will Decide…

Welcome back to the Rude Awakening for Wednesday, March 24, 2021.

While futures were decidedly up overnight, the market is tipping once again.

This marks day 3 in a row of declines.

The rule of three is significant in the markets and in trading.

If we close out another day in the red, it might be time to look out below.

For a deeper update, Yahoo Finance reports:

Stocks fell Thursday morning, with equities looking to extend losses for a third consecutive day.

The Dow and S&P 500 each opened sharply lower. The Nasdaq added to losses after the index shed 2% on Wednesday amid another day of selling for technology shares. U.S. crude oil prices gave back some gains after spiking 5% on Wednesday, though a massive container blocking passage in the Suez Canal continued to plug the significant trade artery for another day, weighing on oil supplies.

The quick move lower in equities came following remarks from Federal Reserve Chair Jerome Powell, who spoke on NPR’s Morning Edition Thursday morning. Powell doubled down in his assertion that the Fed remained strongly committed to targeting 2% average inflation over time, and said that any eventual pullback in Fed support would be done “gradually over time, and with great transparency.”

However, some investors have been skeptical that the Fed will resist adjusting its monetary policy positioning in the face of higher inflation this year. Though Powell and other Federal Open Market Committee members have advocated a “patient” stance that favors leaving accommodative policies in place during the recovery, the specter of much greater-than-expected inflation this year remains on the table.

“This will be the first time that every country in the world is emerging from recession simultaneously. And the Fed and other policymakers are banking on this idea that it’ll be a relatively short strain on supply chains but eventually, things get up and running again and you can get the input components to where they’re most needed,” Tim Quinlan, Wells Fargo senior economist, told Yahoo Finance. “But I think one of the under-appreciated risks is the scope for this to create more of an inflation shock in the short-run than they’re banking on right now.”

With all of this in mind…

We have some new stocks to add to your watchlist that are just about ready for a move.

Have a great trading day, folks.

We’ll talk tomorrow.

Regards,

Scott Stewart

Scott Stewart
Editor, Rude Awakening

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