March 23, 2023, 10:23 pm EDT
Wobbling Along With Inflation
The stock market kept wobbling along with the inflation environment. Fed fund rate reaches about 5% after about a year-long rising rate policy. When CPI is still at 6% level, it would be hard to predict when it will fall to 2% level. Although the Fed gave hint that the hiking process could slow down or stop with another 0.25% this year, there is no guarantee at all.
When banks are still struggling, we know that the stock market has no place to go.
Today, the semiconductor, software, and communication sector performed relatively well.
- Semiconductor: MU, MRVL +5%, MPWR, ASML +4%, LRCX, AMAT +3%
- Software: ACN +7%, NET +5%
- Communication: NFLX +9%^, NTES +6%
Also, precious metals gold and silver kept advancing.
Otherwise, the stock market struggles to climb higher because of the lack of confidence. The government may help the banks financially. But. the economy needs to see the decline in inflation to boost their morale.
We believe there is a long way to go to see inflation go back to 2% again. So, it would be wise to stay cautious when investing.
Technically, Nasdaq is on the bullish bias but S&P 500 and Dow Jones are barely hanging for all trend lines.