Market Outlook 22/03/21

US equities were treated to a week full of fundamentals as we had an FOMC meeting which could be the catalyst to send the stock market on its way to new all time highs or could be the catalyst to send tech stocks even lower.

US Fundamentals This Week

Last week saw Fed Chairman Jerome Powell come out and reiterate the Fed’s accommodative policy path. This week however, slows down slightly in terms of economic event risk. At the time of writing, we saw Existing Home Sales come out negative for the dollar. All eyes will be waiting for Thursday, which will bring a good amount of volume and liquidity to the Indices market with GDP as well as Initial Jobless Claims data being released. Friday also brings us Core PCE, the central banks preferred measure of inflation. Should we see any further restraint on the bond market, this could be the green light to send yields even higher. We saw yields climb as high as 1.73%, the high it created in January 2020 before the worldwide lockdown. At the time of writing, the 10 Year Treasury Yields are sitting at 1.68%, still hovering close to the 1.7% region.


Technically, NASDAQ is reaching a very crucial inflection zone around the $13 200 region which we saw price struggle to break through last week. With big banks and hedge funds keeping a close eye on the Treasury Yields, we could see a continued sell-off within tech stocks as large firms continue to liquidate their money in technology stocks and rotate into more industrial stocks within the Dow Jones for example. Monday brought us a green day for the NASDAQ with a 2% gain at the time of writing. A key level to keep an eye on throughout the week will be the region of $13 200 once again as we wait to see if price will manage to create a new high.


With regards to the Dow Jones, we’ve seen the eventual pullback in price after we saw US30 gain insane bullish momentum once President Biden signed the $1.9 trillion Stimulus Deal. Monday saw price dip into the $32 500 region, but it will be interesting to see if price manages to pullback into the psychological level of $32 000, or if we will see price continue to rally in weeks to come on the back of all the current fundamentals taking place. 


With many more updates to come this week, be sure not to miss out, by subscribing to our blog for updates directly to your email. As always, practice risk management & we hope you have a great trading week ahead!

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