The month of March came in like a lion but is going out like a bi-polar bear.  From start to finish, March has been a month of dueling viewpoints with a little geopolitical tension thrown in for good measure.

The Big Picture

On the heels of a brutal winter that affected every measure of economic growth, signs of spring abound.  True to form, investors now fret over a bull market entering its 6th year.   After notching another record high in early March, the S&P 500 index fell back to test support, before retesting that record high in the third week of trading.  Most of the trading sessions started off on an optimistic note, only to fall back on afternoon pessimism.

For the month, the Dow Jones Industrial Average is basically flat; the S&P off one-tenth of a percent; the NASDAQ dropping 3.5% on a biotech wreck.  Year-to-date the numbers aren’t much better: the Dow off nearly 1%, the NASDAQ off 0.01% and the S&P better by 0.9%.

In between all the sideways action, investors analyzed the first press conference of the new Federal Reserve Chair, Janet Yellen.  Arguably one of the most powerful women in the world, arm chair quarterbacks came out in force to critique her performance and debate whether her words indicated a policy shift. 

No confusion out of Russia, where President Putin followed through on threats to invade and reclaim Crimea from Ukraine.  Drums of war reverberated throughout the global economy before cooler heads and steadier nerves prevailed. 

Continued political posturing in Washington means no action on jobs, extension of unemployment benefits, immigration reform.  The deadline for applying for insurance under the Affordable Care Act is upon us, with an estimated 6 million people already enrolled.  However, efforts to undermine the law are in full swing. 

I, Investor  

 With the end of the month and the first quarter starting off the week, focus once again turns to economic data and corporate earnings.  Data this week should not be as affected by the weather as previous months.  Monday’s release of the Chicago purchasing manager’s index will give a glimpse into the economic health of the manufacturing and non-manufacturing activity in the region. 

Tuesday we get construction spending for February along with vehicle sales and Institute of Supply Management index for March.  February factory orders data is out on Wednesday and could include a revision to durable goods orders, which have declined for three consecutive months.  Weekly unemployment claims and February’s trade balance are on the docket for Thursday, with the employment situation report out on Friday.  Look for the unemployment rate to decline 0.1% to 6.6%, with the economy generating 200,000 non-farm jobs.  Investors are looking for gains in all sectors, not just service industry jobs.

The following week’s calendar is light on economic data but strong on corporate earnings reports.  The unofficial start of the earnings season is Tuesday, April 8th when Alcoa, the first Dow Industrial component to report, releases its earnings and revenue figures, followed by banking giant JP Morgan on Thursday.  Friday April 11th sees March producer price index and April Consumer Sentiment data.  Anticipate more sideways price movement before another attempt at record highs as investors digest earnings and economic data.

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