All Eyes on the Federal Reserve
The Nasdaq was up for the week on the likely event that the Federal Reserve may have one interest rate increase in March or May. The Nasdaq(technology) are trading up and showing leadership anticipating the Fed is done and stable to lower interest rates are ahead. Markets are growing increasingly optimistic about containing the banking crisis after a group of banks said it would aid First Republic Bank amid the industry’s crisis. Traders have been rotating to technology stocks on hopes that the crisis could push the Federal Reserve to shift its outlook on monetary policy at its meeting next week. The Nasdaq continues to lead and where we have been focusing on new buys. We have mentioned this several times over the past several months. When the Fed stops, growth will be preferred over value and growth resides in the technology/biotechnology sectors. The small-cap Russell 2000 remains under pressure. The 10-year Treasury yield has been moving lower since last week. We think that we have seen the highs in bond yields for this cycle and are watching the technology sector. We are bullish on technology and bonds.
The views expressed are not necessarily the opinion of Cadaret Grant, and should not be construed directly or indirectly, as an offer to buy or sell any securities mentioned herein. Investing is subject to risks including loss of principal invested. Past performance is not a guarantee of future results. No strategy can assure a profit nor protect against loss. Please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice.