Market Update - March 21, 2021
Hope all is well. Stocks couldn’t maintain their positive momentum from the previous week, as the three major U.S. indexes recorded modest declines of less than 1%. The S&P 500 hasn’t made any big sustained moves up or down since mid-February. I have broken down this week's news using lyrics from the classic show tune Don't Rain on My Parade.
I'll march my band out I'll beat my drum
The U.S. Federal Reserve continues to march its band out and pump up the markets. They upgraded the economic growth outlook and reiterated the expectations they will keep interest rates at ultralow levels well into the future. In fact, a majority of Fed members expect to see short-term rates stay near zero through 2023.
Don't bring around a cloud
No storm clouds this week in the market as short-term volatility has slipped to the lowest level in about 13 months. On Wednesday, the Cboe Volatility Index closed at 19.2—the lowest since the pandemic triggered a spike in volatility.
Don't tell me not to fly I've simply got to
Small cap stocks cooled off a bit this week but continue to be the most high flying portion of the stock market. Despite the weekly setback, the Russell 2000 remained up more than 50% over the past six months. Bitcoin continued its ascent as well early in the week, the price of bitcoin briefly climbed above $60,000 for the first time ever. While it failed to maintain that threshold later in the week it's current price is crazy considering six months ago, bitcoin was trading below $11,000.
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