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Market Updates

Daily Commentary

March 4th, 2021

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Headline News:

U.S. stock futures are flat after better than expected weekly jobless claims by the Labor Department. First-time filings for unemployment insurance totaled 745,00 for the week ending February 27. That was a drop from 7500,000 the previous week. Investors will also be watching a speech on the economy by Federal Reserve Chairman Jerome Powell later today. Also, pre-market, the U.S. 10-year Treasury yield was 1.48%, well below the 1.6% yield achieved on 2/25/2021.

Markets:       

The S&P 500 closed at 3819.72, which was below support at 3830.41. The selling did intensify during the day once that level was breached. So, the index is now just above the critical 50-day moving average at 3817.87. Also adding to the concerns, RSI 45.59 again closed below the mid-line in support of the selling. Volume was above average, with 2,702,671,872 shares traded. The index needs to close above the 50-day average, or we feel a test of the 2/26/2021 low at 3789.54 could potentially be immanent.

We are currently long-term bullish and short-term cautious.

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John N. Lilly III CPFA
Accredited Portfolio Management Advisor℠
Accredited Asset Management Specialist℠
Portfolio Manager, RJ
Partner, DJWMG
Windsor Wealth Planners & Strategist

Futures trading is speculative, leveraged, and involves substantial risks. Investing always involves risk, including the loss of principal, and futures trading could present additional risk based on underlying commodities investments.

 

The Relative Strength Index (RSI), developed by J. Welles Wilder, is a momentum oscillator that measures the speed and changes of price movements.

 

The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S stock market. Past performance may not be indicative of future results. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investors’ results will vary. Opinions expressed are those of the author John N. Lilly III, and not necessarily those of Raymond James. “There is no guarantee that these statements, opinions, or forecast provided herein will prove to be correct. “The information contained was received from sources believed to be reliable, but accuracy is not guaranteed. Investing always involves risk, and you may incur a profit or loss. No investment strategy can guarantee success. The charts and/or tables presented herein are for illustrative purposes only and should not be considered as the sole basis for your investment decision. International investing involves special risks, including currency fluctuations, different financial accounting standards, and possible political and economic volatility. Investing in emerging markets can be riskier than investing in well-established foreign markets.

 

This is not a recommendation to buy or sell any company’s stock mentioned above.

 

New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing (decreasing) trend suggests a deteriorating (improving) labor market. The four-week moving average of new claims smooths out weekly volatility.

US government bonds and treasury bills are guaranteed by the US government and, if held to maturity, offer a fixed rate of return and guaranteed principal value.  US government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government.  Bond prices and yields are subject to change based upon market conditions and availability. If bonds are sold prior to maturity, you may receive more or less than your initial investment. Holding bonds to term allows redemption at par value. There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices generally rise.

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