US stocks hold steady after worst drop since February

The stock market has muddled along sideways today as investors weigh up signs of pessimism from consumers about the outlook for the economy.

After the big slides we saw yesterday, it’s some consolation that stocks have stabilised on Wall Street, even as the Crimea referendum hangs over proceedings. By early afternoon in New York, the Dow Jones was up 0.08% at 16,122, while the broader S&P 500 was also little-changed, up just 0.04% at 1847.0.

Somewhat paradoxically, today’s US economic releases have been more discouraging than yesterday’s. The University of Michigan’s index of consumer sentiment slipped to 79.9 for mid-March, which was worse than expected and down from the reading of 81.6 seen last month. The softness in the report derives from the expectations component, as opposed to current conditions. For once, this can’t be laid at the feet of bad weather, and perhaps comes from the tensions with Russia.

With no catalysts remaining on the economic calendar for the rest of the day, how investors behave could well be dictated from hereon in by how events unfold regarding Ukraine, Russia and the West. Given the uncertainty surrounding the situation, I would be surprised if caution doesn’t comprise part of the character of this afternoon’s trading session in New York.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.