Morning Briefing
March 22, 2021 | Daily JAM, Morning Briefing |
The yield on the 10-year Treasury didn’t move much today, Monday, March 22, with the yield dropping 3 basis points to 1.69%. Treasury volatility could pick up big time later this week as the government auctions off Treasuries across a range of maturities. The action will reach a crescendo on Thursday as the U.S. Treasury auctions off $62 billion in seven-year notes. It was a disastrous failed auction of that maturity a month ago that ratcheted up volatility in the Treasury market.
March 19, 2021 | Daily JAM, Morning Briefing |
The market went into one of it’s typical square the positions move ahead of the weekend. Nobody wants to be too far out in front of anything that might happen this week. U.S. and Chinese trade talks could see an outbreak of pie throwing. The Federal Reserve could decide the while Treasury bonds will count against bank reserve requirements again on March 31 (as the central bank announced today) stocks starting with the letters B, G, and V won’t. Embattled New York governor Andrew Cuomo could announced that as of Monday New York City restaurants could open at 41.5% of capacity (up from 35%) as long as the 423 candidates running for New York City mayor swear to make it a campaign promise never to eat pizza with a knife and fork. But the market wasn’t about to let unfettered optimism break out either. And stocks that were down big yesterday only showed modest recoveries today. For example, Square (SQ) down 9.00% yesterday, regained 0.24% today. Twilio (TWLO) down 5.19%, picked up 1.07% today.
March 18, 2021 | Daily JAM, Morning Briefing |
After not moving very much yesterday on the actual news from the Federal Reserve-the Standard & Poor’s 500 finished up 0.29% and the NASDSQ Composite closed higher by 0.40%, today, March 18, markets decided they really didn’t like the Fed’s stance on inflation, interest rates, and bond yields.
A day after Fed chair Jerome Powell said the Fed wasn’t much concerned about either the projects for higher inflation or the rise in Treasury yields, the yield on the 10-year Treasury spiked to 1.71% at the close. (It was at 1.74% as 1 p.m. in New York.) The closing yield amounted to a jump of 7 basis points in the yield on the benchmark Treasury issue. The yield on the 10-year Treasury is now up an astonishing 42 basis points in a month. And as has been the case in 2021 and as you might expect, stocks sold off with high multiple, high momentum technology shares taking the worst beating.
March 17, 2021 | Daily JAM, Morning Briefing |
At today’s (March 17) meeting of its Open Market Committee the Federal Reserve held its target interest rate at 0% to 0.25% and continued its commitment to buying $120 billion a month in Treasuries and mortgage-backed assets, as expected. But the central bank’s dot-plot survey showed more slippage on projections of when the Fed will raise interest rates. The majority of the Fed officials polled continued to see no interest rate hikes through 2023. But a larger number than in December–7 out of 18, up from 5–now see the first rate increase coming some time before the end of 2022.
March 16, 2021 | Daily JAM, Morning Briefing |
On Wednesday the Federal Reserve will update its projections for GDP growth, inflation, and the timing of any interest rate increase. In December, Fed officials, on the famous (or infamous) dot plot indicated that that central bank officials expected to hold benchmark interest rates in the current 0% to 0.25% range through the end of 2023. in the months since that projection from the Fed the market has been pricing in a different scenario, one that sees a tightening in interest rates from the Fed at the end of 2022. In other words roughly a year earlier than the Fed’s projected schedule last December.
March 14, 2021 | Daily JAM, Morning Briefing |
With everything going on, it’s easy to forget about the upcoming meeting of the Federal Reserve’s interest rate setting body, the Open Market Committee, on Wednesday. Which would be a mistake because, in my opinion, nothing is more important than interest rates (and bond yields) for the direction of stocks over the next four months or so. The Fed isn’t expected to announce any change in policy on Wednesday. Benchmark interest rates will stay at 0% to 0.25%. The central bank is almost certain to keep buying $120 billion a month in Treasuries and mortgage-backed securities But this meeting in scheduled to include an update on the Fed’s projections for future inflation and economic growth. Those words have the potential to shift the market ahead of any action.
March 12, 2021 | Daily JAM, Morning Briefing |
The yield on the 10-year Treasury note climbed to 1.62% today, March 12. That’s a jump of 9 basis points on the day. Following the recent pattern, the climb in yields meant a drop in the prices of technology stocks. Among BIG TECH stocks Apple (AAPL) fell 0.76%; Facebook (FB) dropped 2.00%; Amazon (AMZN) was lower by 0.77%; Alphabet (GOOG) slid 1.50%; and Microsoft (MSFT) lost 0.58%.
March 11, 2021 | Daily JAM, Morning Briefing |
New claims for unemployment dropped to 712,000 in regular state programs in the week ended March 6, the Labor Department reported today. That drop of 42,000 from the prior week was a bigger drop than economists had projected. Economists surveyed by Bloomberg were looking for 725,000 new claims in regular state programs.
March 10, 2021 | Daily JAM, Morning Briefing |
Headline inflation, as measured by the consumer price index, climbed 0.4% month over month in February the Bureau of Labor Statistics reported today. That puts the year over year increase in headline inflation at 1.7%. Core inflation, which excludes more volatile food and energy prices, was up 0.1% month over month in February. That’s a 1.3% year over year increase in core inflation. Both measures are well below the Federal Reserve’s 2% inflation target.
March 9, 2021 | Daily JAM, Morning Briefing |
Technology stocks, so pummeled yesterday, roared back today. The NASDAQ Composite gained 3.69% on the day. The NASDSQ 100 with its huge waiting to BIG TECH closed up 4.03%. After yesterday, a day when the recent rotation into value, cyclical, and vaccine recovery stocks resulted in a sell off in technology shares, today, March 9, those shares showed only muted if any gains, and tech stocks saw huge pickups.
March 8, 2021 | Daily JAM, Morning Briefing |
Two indexes will tell you what you need to know about today’s stock market action. The Dow Jones Industrial Average, driven by cyclicals, vaccine recovery, and consumer stocks rose to an intraday record high. After a slight retreat at the end of the session, the Dow finished ahead 0.97% on the day. The NASDAQ Composite, on the other hand, weighed down by technology and growth momentum stocks dropped 2.41% on the day to fall into a full correction from the February 12 closing high.
March 5, 2021 | Daily JAM, Morning Briefing |
Stocks broke out of the gate today seemingly determined to turn a big three-day losing streak into an even bigger four day plunge. At 11:30 a.m. today, March 5, the Standard & Poor’s 500 was down 1.04%. The NASDAQ Composite was lower by 2.6%. The high momentum technology growth stocks were taking another drubbing. Taiwan Semiconductor Manufacturing (TSM), down 5.46% yesterday had slipped another 0.16% as of 11:30 a.m. Twilio (TWLO), clobbered yesterday to the tune of a 7.16% loss, had plummeted another 9.88% as of 11:30 a.m. And then, the market turned on a dime.
