With stocks up today, investors have more to question about the overall direction of equities. After all, this year has been a bumpy one. We started the year on a tear, with most risk assets rising through mid-February. Then, markets began to take a breather as macro conditions tightened, and a banking crisis emerged.
Today’s move across most major stock indices has been notably positive. Indeed, most indices have risen more than 1% at the time of writing, surging on renewed investor optimism around a banking crisis being avoided. Sentiment has improved considerably, with investors appearing to look to add some risk, to avoid missing out on a continued rally through the end of Q1.
As we near the end of the first fiscal quarter of the year, investors may be looking forward to what’s to come for the rest of the year. Let’s dive into what today’s price action might portend for upcoming quarters.
Why Are Stocks Up Today?
As mentioned, concerns around the banking crisis appear to be abating, with investors appearing to view the U.S. banking system as resilient. Concerns about the strength of the U.S. dollar are also being pushed aside, with capital continuing to flow into the domestic stock market at a reasonable clip.
Interestingly, oil and other commodities have seen strength, with global demand expectations appearing to remain robust. This comes in the face of expectations that global economic growth may be slowing, with a recession around the corner.
Additionally, other high-risk asset classes such as crypto are rebounding once again. The bellwether of this sector, Bitcoin (BTC-USD), has crossed the $28,000 threshold once again. Thus, aggressive momentum investors are seeing impressive returns via adding risk in this environment. This bullish sentiment appears to be flowing into pockets of the equity market, with several companies also reporting strong earnings today, which has further boosted sentiment across the board.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
