March 6, 2023, 7:30 pm EST
The stock market finished today with poor permanence. Although S&P 500 ended with a flat day, it actually gave up all intra-day gains. Technically, it marked a long shadow as shown in the featured chart.
Similarly, Dow Jones and Nasdaq were about the same behavior.
It means that the stock market does not have enough follow-up momentum to extend the rally made in the previous two sessions. Generally speaking, markets wait for the comments from Fed chairman Jerome Powell to talk about inflation and policy.
In our opinion, the inflation fight would be an extended and painful process. Due to the prolonged quantitative-easing policy, reckless spending, and zero interest rates, it would take a while to control inflation. During this tightening process, many industries and businesses would have to suffer from the economic slowdown, squeezed profit margins, and difficulty hiring.
Therefore, we can see that there was no progress for the S&P 500 in the past 6 months (March 2022, March 2023).
Therefore, it would be better to stay cautious in terms of portfolio management.