The stock market is stormy right now. Friday's session ended with a slump after good growth, Monday closed with record highs in the S&P 500 and Dow Jones Industrial Average, and Tuesday let the companies down again.
Last session was not very successful for the industrial Dow, and the others also sank. The high-tech market lasted the longest, but after reaching a two-week high, it also fell back. This process reflects the struggle of the bond and equity markets.
The most experienced investors immediately expressed concern about the possible inflation of the economy, so the attention of the entire investment world is now focused on the current meeting of the Fed. At the same time, the fear indicator is falling and is now at its lowest level since the beginning of the pandemic.
It is expected that the regulator will still raise economic forecasts and confirm the continuation of some subsidy programs.
Investors even stepped up their injections, fearing the end of inflation and "hysterics" that would bring the financial rally to naught.
Meanwhile, retail sales in February fell more than analysts had predicted, and the reason was severe frosts. This news slightly upset the markets yesterday. Winter storms caused a decline in production indicators in Texas, the center of the oil field.
Against the background of this news and the growth of bonds, the Dow Jones index fell by 0.45%, and reached 32,805.03 by the middle of the US session. The S&P 500 lost 0.28%, and reached 3,957.79, while the Nasdaq Composite fell by 0.18%, and reached 13,435.18. Then, the indices bounced back a little. Now, it seems like the intensity of expectations is letting investors down – we are again witnessing a decline.
Shares of energy producers fell by 2.4% after oil price fluctuations, but financial indicators showed a decline of about 1%. Technology services and communications grew by about 0.5% and 0.7%, respectively.
The Russell growth index was slightly higher compared to the 0.7% drop in the Russell Value index, reflecting investors' preference to invest in high-tech markets.
Ford Motor Company's capitalization fell by more than 4% after news of a $2 billion convertible debt deal.
Apple Inc. rose after Evercore ISI showed a target price for its shares above other analysts.
The NYSE showed a ratio of falling issues to rising ones of 1.87:1, and the Nasdaq - 2.65:1, which caused the decline.
The S&P 500 posted 72 new annual highs and no new lows; the Nasdaq Composite posted 214 new highs and 13 lows.
E-mini futures on the S&P 500 fell by 0.04% on Wednesday.
By protecting investments, traders add fuel to the fire by withdrawing assets and depositing them in the relatively quiet Asian region. But even here, not everything is smooth. The Asian session, which should soon come to an end, shows fluctuations in the indices depending on the sessions.
The Regional equities excluding Japan index fell by 0.5%. The South Korean KOSPI showed the strongest drop.
The Shanghai Composite and Hang Seng each lost 0.3% on news of swap speculation by the People's Bank of China. Now, Hang Seng has recouped against the background of news about possible claims of Chinese companies that have fallen under US sanctions against the US government. However, the Shanghai Composite still shows a minus.
Japan's Nikkei 225 lost some ground, while the TOPIX reversed a 0.1% gain.
All this shows the strong dependence of the Asian market on news from the United States. And it's still dangerous to open longs here.
European stocks were even weaker, with Euro Stoxx 50 futures down by 0.1%. FTSE futures also declined in the premarket, and in the early hours of trading.
From the market fluctuations, we can come to the logical conclusion that investors can not stand the strain of waiting for the publication of the results of the meeting of the Federal Reserve Commission. Fears of a closing "stimulus rally," as Wall Street asset managers have called it, as well as a relentless rise in bond yields, could trigger a stock crash of up to 10%.
The attractiveness of gold as an asset grows against the background of these "slides" in the market. Gold prices rose to a 2-week high. Spot - added 0.3% and reached $1,736.55.
Commodity markets also look more resilient. Brent futures rose to $68.72, while crude oil futures in general, regardless of the brand, rose by an average of $0.40, and reached $65.20 per barrel.
The cryptocurrency market is also interesting for investors. Although there are fluctuations here, they are less dependent on the dollar. Only a strong influx/the outflow of finance can affect this market. Against this background, some people prefer to put money in cryptocurrencies. At the same time, cryptocurrencies are still highly volatile, and against this background, gold looks more attractive.
