Wall Street Faces Volatility: Goldman Urges Diversification, and Crypto Hits New Highs

The previous week witnessed a decline in Wall Street's major indexes, with Nvidia experiencing a significant reversal after a recent rally. Despite a 5% drop in one day, Nvidia ended the week with gains of over 6%, contributing to a remarkable increase of over $1 trillion in its market capitalization for the year.

U.S. stocks displayed mixed performance on Monday, with gains in Basic Materials, Telecoms, and Oil & Gas sectors, but losses in Consumer Services, Industrials, and Technology sectors. Investors were preparing for upcoming consumer and producer price data, hoping to gain insights into the Federal Reserve's potential interest rate decisions in the coming months.

Goldman Sachs strategists have emphasized the U.S. equity market's dominance, maintaining a 50% share of the global equity market. This outperformance is fueled by factors such as robust earnings growth and exposure to rapidly expanding industries. However, in recognition of potential risks, the strategists advocate for increased geographical diversification.

Concerns about the concentration of global stock markets, especially in U.S. equities and technology stocks, have been raised by Goldman Sachs strategists. While acknowledging the potential justification for this concentration, there is a growing consensus among experts for investors to diversify their portfolios across various regions and sectors.

The increasing prominence of the technology sector in both U.S. and Asian markets is attributed to its significant earnings growth, while other sectors have shown limited progress since the financial crisis. Despite the dominance of technology stocks, Goldman Sachs suggests diversification opportunities, particularly recommending a preference for the healthcare sector in most regions due to its relative affordability and strong growth potential.

Positive earnings from Oracle, particularly in the field of artificial intelligence, influenced gains in other technology stocks. The cloud giant's joint announcement with Nvidia fueled optimism, leading to increased demand for cloud infrastructure in the growing AI industry. However, concerns lingered about a potential slowdown in the tech sector, prompting some investors to lock in profits.

Boeing faced challenges as its shares declined amid expectations of cooperation in investigations by the Justice Department and the National Transportation Safety Board regarding an Alaska Airlines 737 MAX 9 mid-air emergency in January.

In the cryptocurrency market, Coinbase ended the day lower, while MicroStrategy soared after Bitcoin reached a new record high. Regulatory progress and an upcoming halvening event in the crypto space contribute to positive sentiment around Bitcoin.

U.S. Treasury yields edged up ahead of key data releases, with the 10-year notes showing a slight increase. The Federal Reserve is scheduled to release its next policy statement on March 20, while market participants are closely monitoring inflation data to gauge the central bank's future actions.

Fed Chair Jerome Powell's recent comments and expectations for rate cuts later in the year have influenced market sentiment. The economic calendar this week also includes retail sales data, updates on industrial production, consumer sentiment, and weekly jobless claims, contributing to the anticipation of another potentially volatile week on Wall Street.

Data for Technical Analysis (1H) CFD US 500 [S&P 500]

Resistance : 5134.1, 5135.3, 5137.2

Support : 5130.3, 5129.1, 5127.2                           

1H Outlook

Source: Investing.com                                 

Buy/Long 1 If the support at the price range 5125.3 - 5130.3 is touched, but the support at 5130.3 cannot be broken, the TP may be set around 5134.1 and the SL around 5123.0, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 5134.1 - 5139.1, TP may be set around 5145.0 and SL around 5128.0, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 5134.1 - 5139.1 is touched, but the resistance at 5134.1 cannot be broken, the TP may be set around 5129.0 and the SL around 5141.0, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 5125.3 - 5130.3, TP may be set around 5119.0 and SL around 5136.0, or up to the risk appetite.       

Pivot Points Mar 12, 2024 01:51AM GMT