Euclid Investment Advisory Blog

Review & Analysis at Close March 3, 2023


The day started with renewed optimism. For now, investors seemed to be growing more optimistic that the Federal Open Market Committee would stick with its more dovish approach of a quarter-point rate increase at the late March meeting. 


Fed Chairman Powell will spend the next two days testifying on Capitol
Hill for his "Semiannual Monetary Policy Report to the Congress." Anything Powell says tomorrow could quickly be overtaken by other news.


The February jobs report is due out on Friday, with economists expecting a 200,000 rise in non-farm payrolls, a notable slowdown from January's 517,000 new jobs.




Equity markets were mixed Monday: large caps and Europe rose a bit while bonds and small caps fell 1.7%. China gave back some of last week's gains. 

Sector Trends
Bullish - Materials, Communication Services, Energy, Financials, Industrials, Technology; Bear Alert - Staples, Real Estate;

Bull alert: Consumer Discretionary; Bearish: Consumer Staples, Utilities, Health Care, Gold Miners.

Weekly Market Breadth indicators: Nasdaq Composite market -Bull alert; NYSE market- Bullish.

Dominant market: NYSE but Nasdaq Comp on verge of overtaking. Large-cap growth just began outperforming large-cap value. Small cap outperforming large caps.

Fixed Income
The 10-year US Treasury Yield closed today at 3.983%, up from last week's 3.964%. While the long-term trend is up, the pace is weakening and may pull back.

The 2-year US Treasury Yield closed today at 4.89% up slightly from last week's 4.86%. While the long-term trend is up, it is on verge of turning down.

The 10-2 year Yield Curve remains inverted, the closing spread widened to -0.91 from last week's -0.89.

While the trends vs. US dollar of the Australian Dollar, the Euro, British Pound, and Yen remain on Bear Alert, their declines have halted and reversing up.

While the US Dollar Index remains on Bull Alert, its advance is weakening.

Gold's Bear alert decline appears halted for now, same for Base Metals and Copper; West Texas Light Crude appears forming a base.

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