City A.M. TV: Daily Market Snapshot (video)
Markets globally pushed higher last week. In many instances the gains were pretty marked. The key US S&P500 index was up over 3 per cent on the week; the NASDAQ, which has been the centre of weakness in much of 2021, was up over 5 per cent; while the US mid-caps rallied aggressively (+7 per cent).
With that, some markets are breaking out to new highs (e.g. US small and mid-caps) while others are hitting key resistance levels, including the S&P500 (which is now back at its mid-February record highs). US 10 year bond yields are also attempting to push to new multi month highs. Overarching all of that, our short term market timing models (i.e. which generate 1 – 2 week market timing signals) are back on SELL.
In terms of events, this week will be dominated by central bank meetings, especially the Federal Reserve announcement and press conference on Wednesday. The Bank of England and the Bank of Japan are also both meeting this week (Thursday and Friday, respectively). Following on from the ECB’s comments last week about bond yield levels, investors and traders will be watching for any discussion on, or linked to, yield curve control. Elsewhere the US releases lots of macro data this week including an update on housing (with the NAHB homebuilders’ index on Tuesday; housing starts & building permits on Wednesday) and February’s retails sales (Tuesday). UK data this week is light. The key focus, other than the BoE, will be consumer confidence and public sector monthly borrowing (both Friday).