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  • The S&P 500 hit fresh intra-day highs just shy of the 4000 before pulling back to close in the 3970s.
  • Quarter-end flows, strong data and anticipation ahead of Biden’s infrastructure announcement have all been cited as positives.

The various banks/institutions calling for a cascade of quarter-end selling in US equity markets were left red in the face by Wednesday’s price action. The S&P 500 hit fresh intra-day all-time highs in the mid-3990s, before dropping back to close at 3973, which still amounted to gains of about 0.4% on the day. The Nasdaq 100 was the outperformer of the major US indices, gaining 1.5% amid subdued pre-US President Joe Biden infrastructure announcement conditions. The Dow dropped 0.3% and the Russell 2K gained 1.1%. The VIX saw a modest 0.21 vol drop to 19.40.

In terms of the GICS sectors; energy and financials underperformed with both losing 0.9% on the session. The former was dragged lower by a sharp drop in crude oil prices in the final hours of the US session (WTI is now trading under $59.50, down nearly 2.0% on the session), while the latter continues to reflect some regulatory concerns in wake of the Archegos Capital Management debacle. The information technology sector was the best performer (hence outperformance in the Nasdaq 100), gaining 1.5%, with Apple gaining after being upgraded by UBS and with strength in Microsoft after to company secured a $22B contract with the US army.

Monthly/Quarterly performance

On the month, the S&P 500 gained 4.25%, the Dow gained 6.63% and the Nasdaq Composite gained 0.4%. On the quarter, that means the S&P 500 closed 5.78% higher, the Dow added 7.77% and the Nasdaq Composite index gained 2.78%.

Driving the day

Rather than selling, month/quarter-end buying was the name of the game on Wednesday. But there were other positive factors for equity investors to latch onto. Firstly, US data was for the most part positive; the latest monthly employment change estimate from ADP points to a solid NFP number this Friday and the Chicago PMI survey (also for the month of March) points to a strong ISM manufacturing PMI survey on Thursday. Admittedly, February Pending Homes Sales data was pretty bad, but housing data has generally been very strong as of late, so one poor print is not too much of a concern.

Elsewhere, traders also cited anticipation of Biden’s infrastructure announcement. The President is currently speaking and is, as expected, unveiling the $2.25T American “jobs” plan, which is part one of a two part transformative investment in the nation’s infrastructure (part two is going to be unveiled next month and is called the American “families” plan). The news that France has gone back into a strict nationwide lockdown did not appear to dent sentiment at all.