E Tuesday Talk: Full Steam Ahead

March left quietly, saving the fanfare and roar for April. Markets are at new highs with the S&P 500 closing above 4,000 in the first two trading sessions of the month. So far, investors are responding "full steam ahead" to Biden's infrastructure bill despite the plans to pay for it with higher corporate taxes.

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Monday the S&P 500 closed at 4,078, up 1.44%, the Dow closed at 33,527, up 1.13 and the Nasdaq Composite closed at 13,706, up 1.67%. Currently S&P futures are trading at 4,057, down 0.27%, Dow futures are trading at 33,356, down 0.18% and Nasdaq 100 futures are trading at 13,545, down 0.30%.

TalkMarkets contributor Stephen Innes sums up the market headlines in Fresh Highs As US Economic Data Fuels The Fire.  Some of his takes on the markets are as follows:

  1. Equity Markets - "The market just took another monumental stepping stone as both backwards-looking (payrolls) and forward-looking (ISM) is confirming what investors have been pricing in all along up until now: a post-COVID return to economic glory. Both historical and forward-looking strategies have their place, but when both confirm a huge economic rebound, there’s only one place for stocks to go: higher. Provided the data continues to be supportive, equities and risk-on can remain at elevated levels for some time – or at least until the next unexpected downside shocker hits."
  2. Oil Markets - "Oil prices continued to slide overnight as third and fourth wave virus outbreaks in Europe and parts of Asia, notably India, have elevated lockdown concerns that continue to hit both spot and forward demand outlooks. And at this stage of the oil market recovery, COVID-19 resurgence is walking back investor thoughts of an oil super-cycle down to a very wobbly monocycle on this bumpy road to recovery." (OIL)
  3. Currency Markets - "The US dollar is weaker through the global risk-on channel as FX traders sell the dollar, anticipating investors putting more money to work outside of the US...Vaccinations are set to accelerate significantly in April and May, and experience suggests current lockdowns will lower COVID-19 case numbers relatively soon. Indeed, this should be positive for the EURO." (FXE)
  4. Gold Markets - "Gold is a bit stronger this morning due to a weaker US dollar and slightly easier US yields. Gold has formed a short-term double bottom but needs to break above $1,750 before it can head higher. The metal could struggle to extend last week's recovery with the positive US NFP underpinning risk-on sentiment." (GLD)
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