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The equities are bouncing back this week, but metals aren’t keeping up. More important this week is Janet Yellen’s statement indicating that interest rates could raise sooner than expected. The unemployment rate, though manipulated, is still higher than what the FED would regard as keeping ‘full employment’ that would prevent them from keeping the rates at the low levels they’ve been at for years.

Overall, 2014 is not the rallying market we saw in 2013. Metals are slightly down this week though Palladium saw a 1% gain on Thursday. All of this and more is discussed in this week’s Weekly Market Wrap-Up!

Equities

Welcome to CrushTheStreet.com’s Weekly Market Wrapup! Let’s get started in the equities sector, which saw a bounce-back following a modest sell-off in the prior day’s session. The benchmark S&P 500 added 11 points to close up at 1,872 points, now within two-thirds of a percent from its all-time record high. The Dow Jones was the leader for Thursday, adding nearly 109 points for the session, while the NASDAQ again lagged behind the other indices, only adding slightly more than a quarter of a percent of valuation. 

The big news item for the week was Wednesday’s announcement by newly appointed Federal Reserve chair Janet Yellen indicating that interest rates could go up sooner than previously expected. While Wall Street has been anticipating the Fed to raise rates for quite some time, the ambiguous manner in which Yellen addressed the issue sent stocks and bonds tumbling. Adding to the vagueness were other mitigating factors that would play into the Fed’s decision making process, namely the unemployment rate which currently stands at 6.7 percent, well above the 5.2 to 5.6 percent range Fed officials see as in keeping with full employment.

Should the labor market, which has been injected with low paying seasonal jobs, not improve both quantifiably and qualitatively, how would that affect the equities sector, which has been a substantial beneficiary of the Fed’s monetary programs?

The trajectory mostly points towards the negative : while the major domestic indices were hailed last year for producing 25% annualized gains, this year, we are off to an incredibly lethargic start, with a first quarter performance that is on pace to net less than two-percent. While the final week of March can always pull a few surprises, the data on advancing and declining days for the S&P 500 is rather telling.

In the first quarter for 2013, advancing days exceeded declining days by nearly 61%. For 2014, that ratio is down to 16%, and with only 7 more sessions remaining for the current quarter, there’s not much room for improvement, considering that we could see sell-offs from fund managers booking profits ahead of what may turn out to be an underperforming macro-environment.

Currency

  • Gold Bullion

    Gold and the rest of the precious metals complex has been taking some hard hits this week, scaring off would-be investors from diverting capital into the traditional safe-haven asset. While the yellow metal is down below a key support level of $1,350, it is also up 9% for the quarter, a performance that is 6-times that of the aforementioned large-cap equities sector.

  • Silver Bullion

    Silver has had the toughest road so far, only up 2% for the quarter. However, despite the recent volatility, it’s trading right at its 50 day moving average, which may build a technical support line should sentiment not completely break down.

  • Palladium Bullion

    Hard asset investors may want to key in on palladium prices, which saw a 1% gain on Thursday and may provide some important clues as to the direction of the Ukrainian crisis. The industrial metal has been rising against the tide of global weakness, particularly in China, suggesting that speculators are pricing in geopolitical risk despite assurances of calm from world leaders.

And that will do it for this edition. Thanks for watching and we’ll see you next week! 

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