March Madness

Dan Stewart CFA®
President/Chief Investment Officer
NorAm Asset Management

No, I’m not talking about College Basketball.  I’m talking about the Fed’s March FOMC Meeting Minutes release, affectionately known as the ‘Beige Book.’

Janet Yellen’s Fed essentially walked backed the implication that the Fed would begin raising rates later this year or early next year and took a much more ‘dovish’ stance stating the Committee “reaffirmed its view that a highly accommodative stance of monetary policy remains appropriate.  For the Fed’s complete 2 page statement to read for yourself, it is the first link in the Trending Section.

These comments early afternoon sparked a big stock & commodity rally.  Nice, but will it last.  Well, let’s look at the internals for clues.  Market breadth was fairly positive with advancing issues 73% on both major exchanges.

But Up Volume was only 73% on the NYSE, which is somewhat weak for a 1% rally.  Up Volume was much more robust on the NASDAQ with Up Volume registering 86%, and was reflected in the nice percentage gain of 1.7% on the NASDAQ.

But the NASDAQ hit much harder during this correction so a stronger bounce is to be expected. The most troubling metric was total volume.  Volume was light, and with a big rally like this, you want to see broader participation on volume.  Both participation and volume were lacking.

Commodities, and again, especially oil, had another big day.  Continental Resources (CLR) was up another 1.5%.  We are also researching other stocks as we speak.

As I stated, we will be discussing our latest energy stock addition on The Wall Street Shuffle radio show this Saturday at 10:00 a.m. on 1190 in DFW.  You can also listen via iHeart radio.

The driver of the markets today will likely be Initial Jobless Claims.  If we can hold through today, then Friday’s earnings of JPMorgan Chase (JPM) and Wells Fargo (WFC) could help drive the markets higher.

Remember to tune into The Wall Street Shuffle Saturdays on 1190 AM at 10 a.m. in DFW. I hope you enjoy the show.

If you have any investment questions you would like discussed on the air or a complimentary portfolio review, e-mail me at Dan.Stewart@NorAmAsset.com.   Tim & I would be happy to review your positions to evaluate your sector exposure and individual stock risk.

We have 3 economic reports today.  We have 1 company reporting on the S&P 500, Family Dollar (FDO).  We have 5 companies reporting in the broader markets including our own Fort Worth based Pier 1 Imports (PIR).  Some notable companies are listed below.

Dan Stewart CFA®
NorAm Asset Management

Economic Reports Today:

Initial Jobless Claims
Import Price Index
Federal Monthly Budget Statement

Some Notable Earnings Reports Today:

Family Dollar (FDO – before market)
Pier 1 Imports (PIR – before markets)
Rite Aid (RAD – before market)
iGate (IGTE – before market)
The information presented is for educational and entertainment purposes only.  Opinions and information expressed are based upon information considered reliable.  However, factors are constantly changing and should not be relied upon. You need to do and verify your own research.  

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