We are back at it with our biweekly market update for the 2nd half of March 2021! Much like 2020, 2021 is proving to be an active year and the month of March was no different. If you would like a more in-depth review of what moved the markets, an FFR Trading portfolio assessment, or would like to speak to one of our client care specialists for more information on our offered strategies, we welcome you to reach out to by giving us a call at (800) 883-0524 or contacting us via email or our contact form. We are always happy to help! Now, let’s discuss our market update for the 2nd half of March 2021 starting with March 15th.
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 it’s 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 was “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 market’s 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
- 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.
Wednesday – March 24
- Stocks sank into the close with the Nasdaq being today’s biggest laggard down almost 2%.
- Bond yields barely nudged today, but overall, they did very little to lift tech stocks.
Thursday – March 25
- Stocks seesawed with the Dow falling 348 early in the session but rebounding sharply to end the day near its all-time highs.
- Early morning weakness might have been a response to Fed chief Powell’s statement that one day, the Fed may remove the stimulus that’s propped up equities throughout the pandemic.
- Jobless claims for the week ending March 20 showed some relief, coming in at 684,000 which was much lower than the anticipated number of 730,000.
- Fourth-quarter 2020 GDP also came in at 4,3%, just slightly higher than the expected figure of 4.1%.
Friday – March 26
- Stocks rallied into the close led by bank shares and economic reopening plays as investors cheered data showing subdued inflation.
- Financial stocks rose after the Fed announced that banks could resume buybacks and raise dividends starting at the end of June. The central bank originally said it would lift pandemic era restrictions in the first quarter, but even the delayed move gives investors more clarity
- Despite all this drama about higher interest rates, the S&P’s modest gains were proof to many investors that a healthy back-and-forth inflation between tech and cyclically-sensitive value names is keeping the markets afloat.
Monday – March 29
- Wall Street kicked off the week on a cautious note with the Dow swing around 300 points from high to low but managing another record close.
- Meanwhile, there was massive selling, or rather “forced liquidations” in financial stocks, Chinese tech giant ADRs (like Baidu), and US media conglomerates (such as Viacom) due to the margin call crash of hedge fund Archegos Capital Management.
- The selling also caught global financial firms like Nomura Holdings and Credit Suisse who found themselves counterparties to Archegos’ risk and eventual losses.
Tuesday – March 30
- The broader market slid lower today as the 10-year yields held firmly at 1.7%, pressuring big-name tech stocks.
- In the meantime consumer confidence rose to 109.7, far outpacing analyst expectations of 96.0.
- January home prices are up month-0ver-month by 1.2% matching consensus.
Wednesday – March 31
- It was a mixed close on Wall Street for this final trading day of the month and this first quarter.
- The Dow closed down with the S&P 500 and Nasdaq closing positive at the end of the trading day; the tech-heavy Nasdaq was today’s outperformer.
- The tech sector rose with large-cap tech names shrugging off rising rates.
- Private sector employment increased by 517,000 jobs from February to March according to the March ADP National Employment Report.
- Pending home sales fell for a second straight month in February, signaling a cooling in the housing market in the months ahead as accelerating prices amid tight supply and rising mortgage rates reduce affordability.
- The Chicago PMI came in higher at 66.3, beating forecasts of 60.7.
That concludes our overview of what moved the markets for our market update for the 2nd half of March 2021. Stay tuned for an update on what influenced the markets in April coming soon! It is important to stay in the loop and pick up on trends that are occurring in the markets so that you can notice patterns and conduct your trading proactively rather than reactively. We anticipate market volatility ahead, with continued dips and all-time market highs! April is shaping up to be an interesting month with lots of corporate reports, as well as data on the health and patterns of the U.S. economy. You can sign up for email updates for our market update by contacting us or visiting our social media pages. We are active on Instagram, Facebook, Twitter, and LinkedIn. Happy trading, everyone! We wish you all the best!