Dow -1.56%, S&P 500 -1.57%, Nasdaq -1.55%, Russell 2000 -1.00%, SOX -2.27%, Eurostoxx -1.43%, SMI -0.67% .
Wall Street produces reports at the end of the month and quarter. The biggest winners in the first three months of the year are undoubtedly energy and utilities, while the S&P500 (SPX) fell for the first time in two years in a quarter, falling 4.95%. Growth stocks suffered, Nasdaq gained 9.1% over the period, value stocks held their ground, falling just 0.6%. Looking at the dark side of the rankings, we see telecom companies pulling down the Meta (FB), which fell 33.9% during the first quarter, its results and its very disappointing outlook were there.
A disappointing quarter for the stock markets, but March brings some optimism. SPX rose 5.21% there, Nasdaq up 5.08%, Eurostoxx up 3.63% and SMI up 2.52%. Of the last 11 trading sessions of the month, SPX ended nine up. As of yesterday’s call, it is 3.4% below its historical maximum, and the war is already looking in the rearview mirror, right or wrong. Wall Street’s major index also took advantage of March to clean up its technical configuration by reclaiming its 50- and 200-day moving averages, currently playing with its 100-day moving average. It is not moving into the overbought zone. In terms of volatility, March was the scene of a very good drop, with the VIX index (SPX volatility) dropping from a high of 37.52 to 20.56 yesterday. The pullback potential remains until 15, an important support level. Yesterday was a little special, we are closing the month and the quarter and it shows at the very end of the session with $20 billion in sales which is huge but let’s keep calm dear bulls a new quarter is starting today.
US Treasuries remain in the spotlight, a junction between 2-year and 10-year yields seems to be inevitable, the gap between the two accomplices is melting like snow in the sun at 1 basis point this morning. Thus, the US yield curve seems to be destined to turn over, perhaps already today the US bond market is sending us a signal with caution regarding the growth of their country. The dollar recovers color and returns to 1.1065 against the euro as well as gold, the ounce is starting to rise again and is trading at $1932 this morning. Oil stumbling on the carpet under the influence of Joe Biden’s desire to fill the market with strategic reserves, this morning a barrel of WTI Light Crude oil is trading at $98.85.
We feel the somewhat crazy hope sparked by Vladimir Putin’s reassuring words on Tuesday will last a short day at best. The owner of the Kremlin plays on the nerves of everyone, including the market. In this context, the feeling of Mr. Market has returned to a rather autumnal state, even mother nature is pulling up to it, sending us good kisses from Russia in the form of snow in the morning.
But Vladimir Putin does not have a monopoly on angry words, and the boss of the SEC (Securities and Exchange Commission), an American stock cop, who calms the ardor of participants about the prospect of an early agreement to allow Chinese companies to continue to be listed on US markets, is not bad either. As a result, the ETF KWEB (Kraneshares CSI China Internet) sank more than 6%.
Talks between Ukraine and Russia should resume today. The UN reports that humanitarian aid convoys have not yet reached Mariupol, but aid has arrived in the city of Sumy in the northeast of the country. Russian forces ceded control of Chernobyl after being exposed to radiation around the nuclear facility, according to Ukrainian officials. Joe Biden says Putin may have fired some of his advisers or placed them under house arrest. The Kremlin calls Joe Biden’s comments “a perfect example of disinformation on the part of the head of state.”
Shanghai is shifting the lockdown to the city’s western half, freeing the financial district from strict measures but leaving many of those in the eastern half on lockdown. Democrats and Republicans are close to agreeing on a $10 billion Covid funding package and could secure more funds for global vaccination efforts. Bombay will remove all restrictions.
The final March manufacturing PMIs will be released the day before the Eurozone March CPI (11:00 am). In the United States at 2:30 pm, the big statistic of the week will be published: employment data for March. This is followed by PMI Manufacturier (15:45) and ISM Manufacturier (16:00).
Ford and General Motors stop production in Michigan due to a shortage of chips. Vestas Wind Systems receives orders for 55 MW for Italian wind farms. Sika completes the sale of its industrial coatings in Europe for 200 million euros. Georg Fischer sells his stake in the American joint venture GF Linamar.
In Asia this evening and this morning, indices are trading lower, except for Shanghai, which rose 0.89%. Tokyo lost 0.56% after the bell, Hong Kong lost 0.34% and Seoul lost 0.65%. SPX futures rise 17 points and Europe opens at breakeven.