US stocks fell slightly on Wednesday amid trading stalled ahead of the release of minutes of the Federal Reserve’s March policy meeting, which could provide clues about the central bank’s strategy. If the economy recovers from the coronavirus pandemic, it gets too hot.
Securities benchmark trading like?
Dow Jones industrial average
lost 36 points, or 0.1%, to nearly 33,395 transactions.
S&P 500 index
unchanged near 4,074.
The trading index was 11 points lower, or 0.1%, nearly 13,688.
On TuesdayThe Dow fell 96.95 points, or 0.3%, to 33,430.24, the S&P 500 fell 3.97 points, or 0.1%, to end at 4,073.94, after setting a record. intraday at 4,081.37, while the Nasdaq Composite fell 7.21 points, or 0.1% lower, to close at 13,698.38, ending the streak of three consecutive gaining sessions.
Want to understand the future of cryptocurrencies and NFT? Sign up for MarketWatch’s free live events today: https://events.marketwatch.com/crypto/home
What drives the market?
Optimism about the outlook for the business environment is growing as more Americans take vaccines and as Washington moves towards more spending measures to help facilitate complete recovery from the pandemic. coronavirus.
So far this year, investors have favored assets that perform better at the start of the economic cycle, marking a so-called value cycle.
Diane Jaffee, senior portfolio manager at TCW said: “We have not seen this kind of value recovery since 2016.“ Like there are super cycles of growth, I believe there are cycle super values. It didn’t pass in 2016 but I think we’re in for one now. “
Investors will be waiting for an account of the Fed’s two-day meeting on March 16-17, scheduled to be announced at 2pm Eastern Time. At that meeting, policymakers made forecasts about US economic growth and inflation, but insisted that adaptive monetary policy would be maintained until 2023.
However, the market pushed back those predictions, with yields rising rapidly this year on the expectation that a quick economic recovery from the pandemic could spur inflation higher.
Market participants are, on average, expecting a 4-quarter point increase by the end of 2023 from the current range of 0% to 0.25%.
Jaffee told MarketWatch: “I think investors are starting to realize that inflation will have a rise in the short term, but it will not be sustained. “However, if the yield curve turns more positive or the 10-year yield rises but it’s due to economic growth, that’s a good thing. That’s what we’ve been waiting for for the past 10 years! ”
While most investors are aware that increasing spending on infrastructure will help industries like materials.
There are many things in their favor, including some technical factors that will boost income and some regulatory mitigation.
Charalambos Pissouros, senior market analyst at JFD Group wrote: “We expect the minutes to confirm that the Fed is not considering commencing normalization earlier than committed.
“Although officials have upgraded their inflation and economic forecasts – inflation is forecast to be at 2.4 percent this year, Fed Chairman Powell has made it clear that this is temporary,” Pissouros wrote. and will not meet their standards.
“He is also insistent with his gun that it is too early to discuss mitigation [quantitative easing], ”But some skeptics are expecting that the Fed can point out its plans to strengthen its bond-buying program. as early as the end of the year.
The increase in bond yields has been somewhat reduced, with yields on a 10-year Treasury note
at around 1.65% on Wednesday morning from 1.72% on Friday. The drop in benchmark bond yields has helped motivate some technology stocks to benefit from the low interest rate regime.
“I have a little doubt that with excess savings, new stimulus savings, large deficits spending, more QE, potential new infrastructure bills, successful vaccines and euphoria to finish. After the epidemic, the US economy is likely to explode, ”the executive wrote. “This boom could easily happen in 2023 because all spending could extend to 2023.”
Which companies to focus on?
on Wednesday announced one commitment to spending more than $ 2 billion with black-owned businesses by the end of 2025. Shares are partially lower.
XPO Logistics Inc.
said Wednesday it has more than 1,400 jobs in North America and plans to accelerate hiring to meet growing demand. Shares jumped 0.9% in late morning trading.
LumiraDX Ltd., a point-of-care diagnostic testing company, coming to the public through a merger with a special purpose acquisition company, or SPAC, CA Healthcare Acquisition Corp.
in a deal with a pro forma business value of about $ 5 billion.
Shares of MSC Industrial Direct Co.
4.8% off On Wednesday, after metal outsourcing and maintenance, repair and operation (MRO) company reported a fiscal second-quarter profit that exceeded expectations but sales fell.
- AppLovin Corp., APPLICATION a software maker for mobile app developers, which has set the terms for Wednesday’s public initial public offering, with plans to offer 25 million shares from 75 USD to 85 USD per share.
Coinbase Global Inc.
revealed preliminary first-quarter sales late Tuesday at $ 1 billion, outperforming last year’s sales and quarterly profits of nearly $ 1 billion. The cryptocurrency trading platform is expected to launch on the stock market next week and announced preliminary results for the January-March period and the guidance for the full year 2021.
How are other assets performing?
ICE US Dollar Index
Monetary measure against a basket of six major players, was down 0.1% at 92.27.
The yield on a 10-year Treasury note
fell 0.5 bps at 1.646% like traders wait for the Fed minutes. Yields and bond prices move in opposite directions.
down 60 cents, or 1%, at $ 58.73 / barrel on the New York Mercantile Exchange.
down $ 1.40 or 0.1% to $ 1,741.60 / ounce on Comex.
In Europe, the index Stoxx 600
0.1% slide, while London’s FTSE 100
closed down 0.9%, while Japan’s Nikkei 225 I 0.1% increase.
Continue reading: Here are ETFs to help you invest in your Biden infrastructure plan