Weekly Economic and Stock Market Commentary – March 22, 2021

The Ides of March turned out to be a good day for the investment markets, but the rest of the week wasn’t much fun, unless you like roller coasters.  The problem with last week’s ride was that the entrance platform was above the exit platform.  The international roller coaster came back with little height adjustment required.

Last week seemed to be the week where Caesar taketh away, with the talk of higher taxes.

It’s premature to guess at what will eventually make it into law, but I am confident it will affect nearly every American, and not only those above a certain income threshold.

Last week gave us a move towards sanity in the bond markets, despite what the Federal Reserve and “our friends in Washington” prefer.  I am not saying interest rates are going to skyrocket, but the group on Wall Street known as the bond vigilantes concluded that lending money to the government for 10 years will require a return of greater than 1 percent.  That is not necessarily a bad thing, as it shows an improving economy.  If you still have not refinanced a long-term loan/mortgage, you may want to consider it.

The Nasdaq Composite finally made a buy signal last week, and promptly cratered on the news.  We are not back to the days of the tech wreck we had in 2000.

The bullish percent indicators gained some ground last week.  I recommend WEALTH ACCUMULATION across the board.

Remember, Xs mean OFFENSE or wealth accumulation, while Os mean DEFENSE, or wealth preservation.

Below is where our indicators stand as of March 19th, 2021 (Courtesy Dorsey, Wright, and Associates).

The Federal Reserve met last week, and decided to do nothing with short-term interest rates. In fact, the betting is that they will do nothing about short-term interest rates until 2023. That was the only economic news of consequence last week. Call me with any questions about this stock market commentary.