Market Factors This Week
Genentech propped up the biotech sector today +7%, which helped keep the Nasdaq afloat, for the moment. Friday is a quadruple options expiration day, that usally causes some vexation on the markets, otherwise referred to as a quadruple "witching". Most of last week, the unwinding of these options was a drag on the market. Options expiration, combined with three critical report releases, will have some influence on the market action this week.
Tues - Net Foreign Security Purchases, Wend - Current Account Balance and Fridays Import Price Index. My take is: the Foreign purchases will be slightly down (due to less foreign purchases of our bonds; current account balance will be a negative number (as the trade deficit has increased to record levels in both dollar terms and as a % of GDP) and the import price index will increase (due to dollar weakness and commodities price increases). I expect a market upturn Mon thru mid Wend. The potentially negative reports and options vexation could weigh heavily on the market mid to later in the week.
Investors are looking past this week to the FOMC meeting and PPI report on March 22 and the CPI report on March 23. The meeting and reports will be closely eyed for signals from the Fed and the inflation data about whether a more aggressive near-term monetary policy is likely.
Tues - Net Foreign Security Purchases, Wend - Current Account Balance and Fridays Import Price Index. My take is: the Foreign purchases will be slightly down (due to less foreign purchases of our bonds; current account balance will be a negative number (as the trade deficit has increased to record levels in both dollar terms and as a % of GDP) and the import price index will increase (due to dollar weakness and commodities price increases). I expect a market upturn Mon thru mid Wend. The potentially negative reports and options vexation could weigh heavily on the market mid to later in the week.
Investors are looking past this week to the FOMC meeting and PPI report on March 22 and the CPI report on March 23. The meeting and reports will be closely eyed for signals from the Fed and the inflation data about whether a more aggressive near-term monetary policy is likely.
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