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Market Recap 3-19

March 19, 2015

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Whats moving the Market today?
Biotechnology outperforms & Crude oil pressured once again
Strong today: Health Care, Technology
Weak today: Energy, Financials, Industrials, Materials, Telecom Services, Utilities

Is there going to be another Q.E. under a different name
Follow thru from Wed. FOMC meeting showed the strengthening greenback has been a key factor in markets, sending ripples through U.S. equities, as traders worry about its impact on the profits of multinationals. The strong dollar has also fanned fears about deflation, as it pounded commodities markets, like oil and gold and weighed on emerging markets.
The dollar index slumped as much as 3 percent in the worst sell off in six years, after a dovish U.S. central bank on Wednesday pared back its own forecasts for interest rate hikes, cut its outlook for inflation and warned the economy has been moderating. The euro hit a high of about $1.10 to the dollar, in Wednesday afternoon trading, from a low point of $1.05.
Fed officials pared back their rate hike forecasts to a slower and lower trajectory. They basically cut the midpoint expectation for 2015 in half, with a year-end rate of about 0.6 percent. The central bank also forecast inflation would slow to half its prior projection—or 0.6 to 0.8 percent for 2015. Fed officials also reduced expectations for the longer-run unemployment rate to 5 to 5.2 percent, from 5.2 to 5.5 percent. It also tweaked its growth forecast, trimming it to 2.3 to 2.7 percent for 2015 from 2.6 to 3 percent, and warned that export growth has weakened.
My concern is if they dont raise rates, which they shouldn’t without any inflation to give cause to raise it, then the other tool they can use Q.E. But they probably dont want to label it that because it would scare the masses here and look like we haven’t recovered. So how will the feds package the new Q.E. under a different name. They really need to get inflation in order to raise them rates so they have something to lower for the next crash. Maybe thats a reason for feds promoting raising the minimum wages. Because that will cause a domino effect on inflation. Higher labor expenses increase prices to consumers. But it can also cause lower spending and send economy downhill.
Anyway todays current status:
The major averages are mixed at midday with the Nasdaq (unch) holding a slim gain while the Dow (-0.7%) and S&P 500 (-0.6%) trade near their session lows. today’s return of dollar strength has weighed on crude oil, sending the energy component into the lower half of yesterday’s trading range. At this juncture, WTI crude is lower by 3.2% at $45.17/bbl while the energy sector (-1.8%) sits at the bottom of the leaderboard.
Economic data included Initial Jobless Claims, Current Account Balance, Leading Indicators, and Philadelphia Fed Survey:
The initial claims level increased to 291,000 from an upwardly revised 290,000 (from 289,000) while the Briefing.com consensus expected an increase to 293,000
There were no special factors impacting this week’s claims reading. Volatility in the claims data has made it difficult to determine labor market conditions.
Philadelphia Fed’s Business Outlook Survey dropped slightly to 5.0 in March from 5.2 in February
shipments—or production—moved into a deep contraction in March as the related index dropped to -7.8 from +8.1 in February.
New orders growth slowed as that index fell to 3.9 in March from 5.4 in February. Unfilled orders entered an even larger contraction, dropping from +7.3 in February to -13.8 in March.

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One Reply to “Market Recap 3-19”

  1. Despite the weakness today of consumer discretionary, look at SBUX… 150% ROI in two days 🙂

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