U.S. stock closed higher on Friday, 25th March 2022, to notch a second week of gains. With this, dip buyers once again came in near the close to reverse early weakness in another volatile trading session.
Energy was in focus with reports of drone attacks on a Saudi Arabian fuel depot, sending crude prices to nearly $120.
Meanwhile, the two-Year treasuries rosed 15 basis points to 2.28. Swap traders are now pricing a 2% addition to the 25 basis point we recently had from the Fed, causing one of the worst selloffs in treasuries since 1970.
President Joe Biden announced that the U.S. and the European Union will push to boost supplies of liquefied natural gas to European countries by the end of 2022 in a bid to begin to displace some Russian gas.
During this interval, the S&P closed up 0.5%, the Dow up 0.44% and the Nasdaq was down a little.
Here are the closing levels on Friday, 25th March 2022: –
| Last | Change | %Change | |
| Dow Jones | 34,861.24. | +153.30. | +0.44% |
| S&P 500 | 4,543.06 | +22.90. | +0.51% |
| Nasdaq Comp | 14,169.30 | -22.54. | -0.16% |
| U.S. 10Y | 2.47% | ||
| VIX | 20.81 | -0.86 | -3.97% |
Well, here is another week of gains in the face of war, rising rates, and high oil prices.
What will hold the market back? The dip buying brigade is winning and suggests that anyone not on board will be left behind.
The recent moves have changed the technical picture of the market and for now, it looks like a floor is in place.
Although the VIX is down, there could be more volatile days ahead. And, unless we get some really bad news, the markets will most likely trend upwards.
Having said that, there is a lot of bad news out there and a rush to new highs may not necessarily be a foregone conclusion. Thus, only time will tell.
On a final note, the two important statistics that are in sight this week in the U.S. are the February PCE inflation (Thursday, 31st March 2022) and March employment figures (Friday, 1st April 2022).
Source: CBOE, Bloomberg
This commentary is written by James Gomes
James has been in the finance industry for over 30 years and most recently worked for a large U.S. bank for more than 20 years.
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