Wall Street finished lower yesterday
On Wednesday, only the Nasdaq reported a small gain among the major US indexes.
The S&P 500 finished at -0.70%, the Nasdaq ended the trading session at +0.05% and the Dow Jones closed at – 0.87%.
The US stock market selloff has been driven by worries of a domino effect regarding the banking sector, after the Silicon Valley Bank collapse.
On the other hand, the tech sector is performing well with stock gains reported by Meta, Netflix, Apple and Microsoft.
The investors’ sentiment is Extreme fear, as indicated in the graph below:
Sentiment indicator – Fear & Greed Index
The market sentiment is 18, in “Extreme Fear” mode.
The latest US economic data
Yesterday, retail sales data were down 0.4% in the month of February. Consumer spending has declined more than the expectation of 0.3%.
The Producer Price index has also gone down more than forecasted. The figure for the month of February is -0.3% versus the 0.1% expected.
The above data are showing a cooling of inflation in the US and investors are betting that the Federal Reserve, during the next meeting, will hike the interest rate by 25% and not 0.50% as expected one week ago (before the SVB failure).
What to watch today
The initial jobless claims for the second week of March are going to be published today at 12:30 GMT.
The claims are forecasted to be 205,000 down from the previous 211,000.
Markets will continue to be volatile today, due to these events.
I remain neutral and cautious about the stock market.
I hold long and short stock positions and aim to profit regardless of the market direction.
If you are already copying my portfolio, please keep the copy open.
If you are thinking of copying me, now could be the right time, if you can invest for the long term (years).
Remember to copy the open trades to optimize the copy.
Remember to set the stop loss on the copy at the minimum level, so you don’t get stopped if there is a correction.
Thank you, everyone. Have a nice day!
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1. Create an eToro account here: https://federicamontella.com/go/etoro/
2. Verify your account and make a deposit of at least 200 USD (you can deposit in any currency, like GBP and EUR)
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4. Start the copy (copy open trades and set the lowest stop loss possible, to allow some movement)
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Let me know if you have any questions.
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The post Extreme Fear is driving the US market after SVB collapse appeared first on Federica Montella.