Archives of “March 2021” month

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SG expect the US 10 year at 2% by year end – the key risk is the Fed responding

  
  Analysis

Scanning some notes this stood out from Société Générale

Analysts at the bank expect the US 10-year yield to climb to 2% by the end of 2021 citing:

 

  • fiscal support,
  • improving fundamentals,
  • easy financial conditions
  • accommodative Federal Reserve support

 

Nothing too surprising ion their reasoning but the 2% forecast is above what I’ve seen elsewhere. SG highlights a key risk to their view as the Fed launching a policy response to the slump in price.

If the 10yr keeps on heading up its hard to see the USD losing too much ground.

Overnight US Market : The stock rotation continues out of high-tech and into cyclicals

  
Analysis, US Market
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Higher yields remain the catalyst

The longs in the technology stocks continue to get hammered and the rotation into the cyclical continues as fears of interest rates have traders repricing the high flyers of 2020.

The final numbers are showing:
  • S&P index -20.72 points or -0.54% at 3821.23
  • NASDAQ index -310.98 points or -2.41% at 12609.16
  • Dow industrial average rose 306.21 points or +0.97% at 31802.51
The NASDAQ index closed below its 100 day moving average for the 1st time since October 30.
Some of the oversized decliners today included:
  • Doordash -11.92%
  • Snowflake, -10.74%
  • Chewy, -8.01%
  • Zoom, -7.91%
  • Nio, -7.66%
  • Nvidia, -6.99%
  • Square, -6.74%
  • Broadcom, -6.57%
  • Palantir, -5.91%
  • Tesla, -5.86%
On the positive side, some of the Reddit meme stocks were in the big gainers:
  • Express, +62.6%
  • Gamestop, +40.1%
  • Koss, +26.79%
  • AMC, +15.52%
  • Bed Bath and Beyond, +10.32%
Airlines also rose sharply:
  • United airlines, +7.03%
  • Southwest Airlines, +6.41%
  • American Airlines, +4.94%
  • Delta Air Lines, +3.61%
Big cap high flying names of 2020 had a tough time of it today as well:
  • Facebook -3.35%
  • Amazon -1.58%
  • Apple, -4.13%
  • Netflix, -4.48%
  • Microsoft -1.79%
  • Alphabet -4.3%
Other winners included:
  • Walt Disney, +6.27%
  • Whirlpool, +3.46%
  • Ford, +3.10%
  • MasterCard, +2.9%
  • Citigroup, +2.82%
  • Cisco Systems, +2.79%
  • Exxon, +2.39%
  • General Motors, +2.29%
  • Home Depot, +2.16%

SOMETIMES I JUST SITS

  
Analysis, Education

And right here let me say one thing: After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I’ve known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level, which should show the greatest profit. And their experience invariably matched mine –that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance.

Jesse Livermore,  Reminiscences of a Stock Operator

Treasury Secretary Yellen: We’re concerned about permanent scarring from crisis

  
  Analysis

Treasury sec. on making comments at a IMF event

Treasury Secretary on is speaking at a IMF event. She says

  • pandemic has had extremely unfair impact on women’s income, employment opportunities
  • very concerned about economic scarring for women as a result of pandemic: must be addressed going forward
  • Hope by next year we can get labor market on track
  • US is addressing low wages, lack of benefits in jobs
On Friday the US nonfarm payroll rose by 379K vs. 200 K estimate. Despite the better-than-expected rise, 9.5 million jobs remained lost since the start of the pandemic. Most those jobs have impacted low income earners and women. If the economy and schools are able to reopen successfully, the hope is that those jobs do come back over time. However, there is a long way to go.

European shares close higher. German DAX record high close.

  
Analysis, Global Indices

Strong gains in European shares.

Rotation inequities is also across borders. The tech heavy NASDAQ continues to underperform. The European shares meanwhile are doing better. The major indices all rose strongly in trading today with the German tanks trading to a new all time high in closing at a record level.

Strong gains in European shares.
France’s CAC is trading at its highest level since February 2020.

The provisional closes are showing:
  • German DAX, +3.4%
  • France’s CAC, +2.2%
  • UK’s FTSE 100, +1.4%
  • Spain’s Ibex, +2.1%
  • Italy’s FTSE MIB, +3.3%
For the year:
  • German DAX, +4.83%
  • France’s CAC, +6.46%
  • UK’s FTSE 100, +4.0%
  • Spain’s Ibex, +4.74%
  • Italy’s FTSE MIB, +6.7%

ICYMI – Saudi Arabia set April official selling price for its Arab Light crude to Asia higher

  
  Analysis

More weekend news that was pretty much swamped by this item:

  • Oil traders note – Saudi oil export ports, facilities targeted in attacks Sunday
Saudi Arabia’s state oil producer Aramco set its April official selling price (OSP) for its Arab Light crude to Asia at plus $1.40 per barrel versus the Oman/Dubai average, up $0.40 from March, according to a statement issued on Sunday. Info via Reuters 

US President Biden is keen to sign direct stimulus checks – coming within 2 weeks

  
  Analysis

The news over the weekend was the US Senate had approved the relief plan:

  • US Senate passes $1.9 trillion stimulus bill

The bill now heads to the US House of Representatives for a vote on Tuesday, where it is expected to be easily approved. The bill will then be signed by Biden, and then the checks.

President Joe Biden said

  • “When we took office 45 days ago, I promised the American people that help was on the way. Today, I can say we’ve taken one more giant step forward in delivering on that promise that help is on the way”
  • “This plan will get checks out the door starting this month to the Americans that so desperately need the help”
The news over the weekend was the US Senate had approved the relief plan:
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