The last week began for the US stock market with moderate growth, however, before the Fed meeting, there was a decrease in government bond yields.
The data on the US had an insignificant effect on the dynamics of trades. A report released by the Federal Reserve Bank of New York showed an acceleration in the growth of manufacturing activity in New York in March. The New York Fed said its general business conditions index rose to 17.4 in March from 12.1 in February, with a positive reading indicating an increase in manufacturing activity in the region. Economists had expected the index to rise to 14.5.
On Tuesday the market showed mostly negative dynamics. The utilities sector, together with the technology sector, showed strong growth, but the energy sector declined noticeably. The released economic data turned out to be disappointing, but many market participants linked it with force majeure in February. Retail sales fell 3% last month, according to data from the Commerce Department. Economists were expecting a decline - albeit a smaller 0.5% - after a jump in spending earlier in the year. February is usually a quiet month for retail sales, and the weather has slowed sales as well. Meanwhile, according to the Fed, industrial production fell 2.2% in February from January, breaking a four-month rise. The bulk of the decline was due to winter weather, which put some businesses on hold, the central bank said.
The results of the Fed meeting contributed to the growth of stock indices on Wednesday. As expected, the course of loose monetary policy was maintained until the US economy further recovers from the impact of the pandemic. At the same time, there was an improvement in economic growth prospects. According to the updated forecasts, most of the 18 participants in the meeting still expect the short-term interest rate to remain close to zero until the end of 2023. Fed chief Powell said the government's bailout helped "stave off one of the worst-case scenarios for the economy," and it was recovering faster than expected. He also said the Fed will continue to do whatever is necessary to support the recovery in the future. Powell noted that "the continued vaccination of Americans gives hope for a return to more normal conditions later this year."
The next day the fall in shares in the energy and technology sectors caused a general decline in major US stock indexes. Market participants also drew attention to the US data. As it became known, the number of weekly jobless claims rose unexpectedly last week, but the labor market is recovering as the acceleration of vaccinations leads to the resumption of the opening of more businesses. Initial claims for unemployment benefits were at a seasonally adjusted 770,000 for the week ended March 13, up from 725,000 in the previous week, the Labor Department said. Economists forecasted 700,000 applications. Meanwhile, the Conference Board report showed that the US Leading Indicators (LEI) index rose 0.2 percent in February to 110.5 (2016 = 100) after increasing 0.5 percent in January and 0.4 percent in December. ...
The week ended with a preferential decline, as the rise in the health sector quotes was offset by the fall in the financial sector. Investors also focused on the first high-level talks between the Biden administration and Chinese officials, during which both sides exchanged criticism.
