Friday, March 12, 2021
New Street View video
LPL Research Chief Market Strategist Ryan Detrick lists four things investors need to know about the market and a special thank you to a 30-year veteran of the financial industry. Watch Street View Video.
Markets open lower amid two-day tech rally
- New highs for the Dow, S&P 500 Index, and Russell 2000 Index Thursday, but the Nasdaq Composite was the big winner, up more than 2 percent. Higher yields have most markets lower this morning.
- European markets are slightly lower, after the European Central Bank increased bond buying in an effort to keep a lid on yields.
- Asian markets were mixed ahead of highly anticipated U.S.-China meetings next week. Hong Kong’s Hang Seng was down over 2%, while Japan’s Nikkei finished higher over 1.5%.
Signs of life in Europe? At LPL Research, we have remained consistently negative on foreign developed equities to the benefit of tactical portfolios. However, rising interest rates and the rotation to value-style equities has benefited one of the weakest equity sectors of the past decade: European Financials. We take a technical look at this group later today on the LPL Research blog, available at 12pm ET.
The Nasdaq rallied more than 8% from its Friday intraday lows through Thursday’s close. However, the index is selling off again this morning, down more than 1% in early trading. Those Friday intraday lows (12,397) mark the first line to watch as tactical support. Part of the issue appears to be rates: The 10-year yield is pushing higher again this morning, and a move above 1.63% signals a breakout of the recent consolidation.
The United States reported 49,000 new COVID-19 cases on Thursday, down 28% week over week. The trend in cases continue to decline, though progress is much slower than a month ago (source: Johns Hopkins).
- Cases have stopped declining in the Northeast, as the trend appears to be increasing, most likely due to the B1526 variant. The variants in New York City account for 51% of cases sampled over the past week.
- The pace of vaccinations continues to rise. The approval of the Johnson & Johnson vaccine likely will result in a step increase in daily vaccinations over the next few weeks.
- The picture in Europe remains mixed. The B117 variant yet again has shown itself resistant to looser restrictions; however, both cases and hospitalizations are falling at a slowing rate, with an 86% drop in cases since late January.
Rising Rates And Stock Market Performance
LPL Research discussed the market signals supporting the potential for stock gains in the current rising rate environment. Read this week’s Weekly Market Commentary.
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