Market Matters Morning Report Tuesday 22nd March 2016
KISS "Keep it simple stupid" over the next few weeks, there are 3 events unfolding that are likely to dictate equities movements / activity.
Easter holidays are only a few days away and most people will enjoy at least a four day weekend; that said, a lot of people are taking extra days to get some prolonged R&R - just check out the roads!
The Volatility Index (VIX) made fresh lows for 2016 last night telling us people are, not surprisingly, exhausted with the volatility so far this year and have had enough. We expect little market activity prior to Easter as short term positions are squared off and turnover falls away rapidly.
2 US reporting season The majority of listed US companies will release their quarterly earnings in early-mid April, not that long after Easter. It is normal practice for companies undergoing buybacks to stop purchases in the few weeks ahead of their report to avoid conflict i.e. buying with knowledge the market was not privy to. This may cause a decent pullback in the S&P500 which has rallied over 13% during the last 6 weeks.
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