To The Moon

Tuesday (16 April) trading session was hit by volatility by major indexes. The S&P 500 experienced a slight decrease of 0.2%, while the Nasdaq Composite saw a marginal decline of 0.1%.

The only one that has managed to provide a modest increase of 0.2% was Dow Jones Industrial Average. The increase was being supported by a significant increase from $UnitedHealth(UNH)$ which urged 5.2% following its earnings announcement.

Market React To Fed Chair Comment For More Time

During the afternoon session, we saw there is fluctuations after Fed Chair Powell emphasized the need for more time to assess the impact of restrictive policies, especially in light of the ongoing challenges with inflation. This has been interpreted as a confirmation of recent adjustments to interest rates, though there is no major surprises, market still suffered from fluctuation and volatilty.

As time of writing, the CME FedWatch Tool has shown only 15% probability for a June rate cut, this is much lower that what was expected. I would personally think that if you have any mortgage loans, maybe it is time to speak to your banking for some refinancing.

Things looked like rate might remain, with the geopolitical tensions escalating, I would not be surprised for a rate increase.

Treasury Market and Economic Data

Treasury yields was performing, there was uptick seen with the 2-year note yield rising by two basis points to 4.99% and the 10-year note yield increasing by three basis points to 4.67%.

Despite the disappointing report on Housing Starts and Building Permits for March, which signalled a continued negative sentiment in the market, we still see rise in yields. I believe the yields increase would continue.

Negative Earnings Contribute To Downward Bias

Bank of America earnings came in negative and the shares drop by 3.5%. This has contributed to the market’s downward bias. The negative sentiment has also influenced the broader market as decliners led advancers by nearly 2-to-1 on both the NYSE and Nasdaq. The $SPDR S&P Bank ETF(KBE)$ also declined by 1.3%.

The March's Industrial Production report showed continued growth, driven by manufacturing output, indicative of a growing economy, this might give some hope on the manufacturing sector.

I would think that Gold and Semiconductor ETFs could still be an area we can look at

$SPDR Gold Shares(GLD)$ $VanEck Semiconductor ETF(SMH)$

Summary

The international markets will be closely monitored, with notable movements in Europe and Asia's major indexes and commodities prices. These key economic data and reports scheduled for release include the Weekly MBA Mortgage Index, Weekly Crude Oil Inventories, the April Beige Book, and February's Net Long-Term TIC Flows might played an important roles in determining how the market would continue to move this week.

Appreciate if you could share your thoughts in the comment section whether you think market would give a short recovery after Fed Chair comment has indicate that more time is needed to assess whether rate cut is coming?

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.