Daily Market Update Mar 23

SPX gained another percentage point on the day and topped the 4500 level as the post Ukraine recovery is showing that it has legs after all. All sectors finished in the green with the exception of Energy, which was marginally lower despite Crude staying elevated. The Brent-WTI spread also widened close to USD 7 a barrel.

On a YTD basis, SPX's Financials has become only the second sector to turn positive at +1% - it is still no match for Energy though, at +36% YTD. The selloff in government debt continued as a chorus of Fed speakers backed Powell on weaning the economy off stimulus. Fed funds futures pricing in of close to nine 25 bps hikes in 2022 remains intact and the US 10Y yield is pushing past the 2.4% level now.

Ahead of the NATO meeting tomorrow (Zelensky will attend via video call and further sanctions are expected), there hasn't been much movement on the Ukraine situation. Estimates of Russian causalities are around 10k so far including as many as 5 generals (a surprisingly high number for a so-far relatively contained conflict).

Putin also took the opportunity to sentence his closest political rival Navalny to another 9 years in prison after what western media called a sham trial. With the one-month anniversary of the invasion coming up and Putin meeting with stiffer resistance than anticipated, the US has warned Russia is setting the stage to launch a possible biological attack under false pretenses.

Commodities couldn't sustain their rally in the second session of the week but Crypto helped pick up the slack. ECB President Lagarde's warning against further regulation to prevent Russia from circumventing sanctions here didn't really seem to affect price action on the day.

Bulk of the economic calendar today comes from the UK, with inflation data and the chancellor's Spring Statement. Markets are in more of a wait-and-see mode now as the next catalyst is awaited, which could come as soon as tomo depending on how the NATO meeting goes.

Have a great day ahead

"Bottoms in the investment world don't end with four-year lows; they end with 10- or 15-year lows."?

Jim Rogers