Stubborn Resistance Repels Bullish Surge
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Welcome to the Schwab Market Update podcast, where we prepare you for each trading day with a recap of recent news and a look at what's ahead. I'm Colette O'Clare, and here is Schwab's early look at the markets for Friday, March 21st.

With no major economic announcements on the docket today, investors are free to focus on yesterday's positive news. The Philadelphia Fed Manufacturing Index and existing home sales were stronger than expected, while weekly jobless claims were lower than expected.

The news appeared to help stocks rally back from a negative opening bid yesterday. But a technical barrier appears to be blocking the S&P 500 index from moving much higher and then send the major indexes into negative territory. Resistance around the 5,675 level has repelled the bulls for the last five trading sessions, suggesting the bears have the advantage.

The bond market saw some flow of funds as investors looked for safe havens on Thursday. Bonds were rallying this morning, likely due to the follow-on effects from yesterday's Fed meeting and the Bank of England taking a more cautious and measured approach to cutting rates, according to Cooper Howard, director of fixed income strategy at the Schwab Center for Financial Research. Howard expressed concern that the Fed lacked confidence in their outlook and the situation could change rapidly.

If uncertainty continues to rise, then bonds could see more buying. Despite the bond buying, investors have favored energy, financials, and industrials over the last five trading sessions. Defensive sectors like utilities and healthcare are also in the green, but consumer staples are in the red. This may suggest that investors aren't getting too defensive just yet.

Micron and FedEx reported earnings after yesterday's market close. Micron jumped 6.12% in after-hours trading on positive earnings and revenue, while FedEx fell 3.9% after missing earnings estimates. It remains to be seen if these returns will carry over in the morning session.

Comparing the S&P 500 Value Index to the S&P 500 Growth Index using the Relative Strength Indicator shows that investors appear to be favoring value during the recent decline in the markets. However, the Growth Index has overall been stronger than the Value Index going back to January of 2023, which may suggest that growth could still have the secular advantage because the uptrend remains intact.

The S&P 500 slid 12.40 points Thursday, or 0.22%, to 5,662.89.

The Dow Jones Industrial Average ticked 11.31 points lower, or 0.03%, to 41,952.32, and the Nasdaq Composite decreased 59.16 points, or 0.33%, to 17,691.63. This has been the Schwab Market Update Podcast.

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