Stocks gain on easing of jitters

Equity markets were broadly higher as traders put off the banking turmoil and jitters surrounding regional banks as Treasury Secretary Janet Yellen reaffirmed full support by the federal government to intervene in the market when needed.

Indeed, the US government stands ready to contain the contagion effect from bank runs and prevent a full-blown crisis from emerging. Given the calmness we have seen in the financial market, there is increasing chance that the Fed will be well positioned to proceed with a modest rate hike of 0.25%, dashing dovish participants’ hope for the Fed to stay put.

GameStop – A surprising profit in the making

The meme stock posted a surprise profit for the fourth quarter, helping its shares to soar. This comes as its hardware and accessories categories grew by 4.6% to hit $1.24 billion in sales. This also leads the pack of major, highly shorted stocks, such as AMC, to rise higher.

Traders are now expecting more short covering to occur if the price recovery stays current, given that there is still a significant short pool.

All eyes are on the Fed.

Indeed, we will receive the news on the Fed’s FOMC rate decision and the press conference that comes after the decision will prove to be significant as we assess Uncle Powell’s perception of the crisis, and if it motivates the Fed to take a more dovish and cautious stance towards the future rise.

It is also when the Fed could provide updates on the economic focus that could shape traders’ expectation trajectory for the months ahead. The Fed is in an awkward situation, given the tools it has to tackle a financial health problem in the economy and a burning inflation situation.

What’s on the menu today?

At 2 am, we will have the FOMC Economic projection and interest rate decision. The consensus is for a 0.25% rate hie to hit 5%. The press conference at 2.30 am will shed light on more insights into the FOMC’s minds.

It is 22 March, Wednesday, 8.55 am in Singapore and 8.55 pm in New York. It has been a wild market ride, and I hope all friends have a safe trading period.