You would think the U.S. stock market would be excited by the $1.9 trillion stimulus the Democrat-dominated U.S. government just passed into law on Friday, 12 March 2021.
But the specter of higher inflation, which portends rising interest rates, robbed the market of much of upward momentum it could otherwise have had. Despite that headwind, the S&P 500 (Index: SPX) still managed to climb enough out of the red during most of the trading day to close at a record high value of 3,943.34 on Friday, 12 March 2021.
That puts the level of the S&P 500 very near the middle of the redzone forecast range on the alternative futures chart.
The level of the S&P 500 is consistent with investors focusing most of their forward-looking attention on 2021-Q2.
The news of the week was mixed overall, with rising inflation concerns a common theme in many corners of the world affecting investor expectations for the future.
- Monday, 8 March 2021
- Daily signs and portents for the U.S. economy:
- Oil slips after hitting pandemic high above $70/bbl after Saudi attack
- Fed extends small business liquidity facility three months to June 30
- U.S. wholesale stocks rise; inventories-to-sales ratio lowest in six years
- Bigger trouble developing in China, Latin America:
- Price and policy fears drive Chinese investors into cloistered stocks
- 'Sell the house': Latin Americans beg and borrow to pay COVID-19 debts
- Positive developments in the Eurozone, China:
- Euro zone investor morale improves to highest in a year
- China's consumption to recover rapidly in 2021 - commerce minister
- ECB minions say they'll do one thing, but do another:
- Nasdaq hits correction, Dow advances as stimulus bill nears finish line
- Tuesday, 9 March 2021
- Signs and portents for the U.S. economy:
- Oil slips to $68 as rally fizzles before U.S. supply report
- U.S. House to vote Wednesday on Biden's $1.9 trillion COVID-19 package
- One in three Americans on unemployment benefits struggle to pay for food, housing - survey
- Fed minions are too white, want to select others who think just like they do:
- Bigger trouble developing in Eurozone, Brazil:
- Coronavirus curbs hit euro zone fourth-quarter GDP more than estimated quarter-on-quarter
- Analysis: Brazil markets, on shaky foundations, rocked by Lula bombshell
- Nasdaq surges as tech stocks roar back
- Wednesday, 10 March 2021
- Signs and portents for the U.S. economy:
- U.S. business applications decline in February
- U.S. consumer prices rise; underlying inflation muted for now
- Biden's $1.9 trillion coronavirus aid bill gets enough votes to pass House
- Oil ticks up on global economic outlook, plummeting U.S. fuel inventories
- ECB minions greasing up printing presses:
- Dow hits record in stock rally as inflation fears recede
- Thursday, 11 March 2021
- Signs and portents for the U.S. economy:
- Oil prices climb 2% as dollar slips
- U.S. job openings rise in January, layoffs decrease
- Biden signs $1.9 trillion stimulus bill into law on U.S. lockdown anniversary
- ECB minions launch more QE money printing, suddenly develop Superman-like inflation vision power:
- ECB speeds up emergency bond purchases, Bund yields drop
- ECB signals faster money-printing to keep lid on yields
- ECB policymakers agree on bond purchase target, differ on yield level aim: sources
- Factbox: Key ECB comments on yield rise in run up to policy meeting
- Lagarde comments at ECB press conference
- S&P 500, Dow end at record highs after upbeat jobless claims data
- Friday, 12 March 2021
- Signs and portents for the U.S. economy:
- U.S. consumer sentiment rises in mid-March to highest in a year
- U.S. producer prices rise; consumers' inflation expectations ease
- Oil settles near $70/bbl on hopes of recovering demand
- Take Five: Week of the central banks
- Bigger inflation developing in India:
- Positive signs or really low Eurozone expectations?
- ECB minions confirm loosey goosey bond buying policies, don't see Eurozone recovery until fall, fear inflation caused by Biden's COVID stimulus:
- ECB's Villeroy flags flexibility on bond purchases
- Euro zone economy won't turn corner before autumn: ECB's Vasiliauskas
- ECB policymakers spar on fallout of U.S. stimulus, outlook: sources
- U.S. stocks close mixed as Dow notches fifth straight record high
Meanwhile, Barry Ritholtz picked out all the positives and negatives he could find in the past week's markets and economics news over at The Big Picture, where the Biden COVID stimulus shows up on the negative side of the ledger.
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