Market Update: Friday, March 3, 2017


  • Markets pause ahead of Yellen speech. (9:52am ET) The S&P 500 is trading marginally lower this morning as market participants await speeches from Federal Reserve Bank (Fed) Chair Yellen and Vice Chair Fischer that could signal the direction of the mid-March FOMC meeting; market expectations of a rate hike at the meeting have risen sharply this week to around 80%. Today’s caution follows a pullback Thursday in which the S&P shed 0.6%; nine of 11 sectors lost ground. The financials sector (-1.5%) was particularly weak, although it has been the best-performing sector over the last month. Utilities (+0.7%) and telecom (+0.1%) performed best in the risk-off environment. Overseas, Asian markets (Nikkei -0.5%, Shanghai Composite -0.4%, Hang Seng -0.7%) followed the U.S. lower. European exchanges are mixed in afternoon trading with weakness in Germany offset by strength in France and Italy. Meanwhile, WTI crude oil ($52.88/barrel) has clawed back a portion of yesterday’s 2.3% slide, COMEX gold ($1228/oz.) is falling, and the yield on the 10-year note is at 2.49% after a large increase this week.


  • Brexit, EU summit, China forecasts, Fed “quiet period”, and February jobs report highlight week ahead. Other than the February employment report (due out next Friday, March 10)  it’s a relatively quiet week for U.S. economic data. It’s also the unofficial quiet period for the Fed ahead of the March 14-15 FOMC meeting. The overseas calendar is chock full of potentially market-moving events, including the EU leaders summit, a potential House of Lords vote on Brexit, the European Central Bank meeting, and China’s National People’s Congress, where Premier Li will provide government targets for the Chinese economy in 2017.
  • Six in a row? The S&P 500 is up 0.6% for the week, which would be the first six-week win streak since late 2015. In fact, this would be the fourteenth six-week win streak since the March 2009 S&P 500 lows. Looking at the previous 13 times this occurred, the S&P 500 was higher on average by 0.8% a month later and positive in nine of the 13 instances.
  • The second worst day of the year. The S&P 500 closed down 0.59% yesterday, which might not sound like a lot, but it was actually the second worst session of the year. Only the 0.60% loss on January 30 was worse. This puts in perspective how persistent the rally has been, as there has been no downside volatility. In fact, today could be the ninety-eighth consecutive day without a 1% close lower for the S&P 500 – the longest such streak since 105 in 1995.


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  • ISM Non Mfg. (Feb)
  • Yellen (Dove)
  • Fischer (Dove)



  • China: National People’s Congress Meeting Begins in Beijing


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