Major Indices are in Correction Territory. We Were Saying it’s Hard to Find Value. Now that seems to be changing…
The headline of the morning was “U.S. economy gains 379,000 jobs in February, in first full monthly employment report under Biden”
Although we all know we are still seeing benefits from the Trump economy. Like Trump or not (we do not take a stance on this one) the economy and or stock market reaped the benefits of his policies.
Is the Blue Wave and Democratic Policies starting to sink in to markets?
The economic policy of the Joe Biden administration is predicted to be characterized by economic stimuli resulting from the economic impact of the COVID-19 pandemic, raising the minimum wage in the United States, investment in clean energy, expansion of access to affordable healthcare, and the forgiveness of student loans. source: wikipedia
While the media devotes its coverage to social policy and identity politics, the economic plans of Biden are hardly written about, despite having great potential for harm to the economy. Mostly stemming from Tax increases and spending.
As of now the S&P 500 sits at 3,751 over 100 points below the 50 day moving average. The NASDAQ 12,307 about 1500 points below the 2021 high of 13,807 and well in to correction territory.
The good news is as of now Fed Policy remains the same. Keep rates low and continue buying bonds.
Jerome Powell delivered a speech at a virtual event held by the Wall Street Journal. He began by saying that inflation will likely rise but that the Fed believes that it will be a one-off. Also, he expressed confidence that hiring in the job market should pick up soon, fueling hopes of a positive NFP report later today. Ok, so tell us something new!
What Powell did not say was that the Fed is ready to intervene to fight the rise in the long-term yields. As soon as markets realized that stocks fell, Dow Jones dropped a thousand points before recovering some losses towards the end of the trading day yesterday. Should we see something from the Fed going forward in regards to controlling yields, that is the catalyst in my opinion that could spark a fresh market rally. Not stimulus! Although stimulus should temporarily help.
As we move on in to March 2021 Traders News Source plans to take a more conservative and selective approach in our reporting. We will have a new report coming between March 10th – 17th, 2021.
On November 30th, 2020 we issued a Fed Policy and Commodities as Inflationary Hedge Assets Report that may be of interest to our new readers just joining us.
The Economy Remains Strong, We Just Need to Fully Re-Open!
The Traders News Group
