(PresidentialWire.com)- Jerome Powell and Janet Yellen are trying to speak optimistically about the American economic recovery, but investors don’t seem to believe them.
On Wednesday, Powell, the chair of the Federal Reserve, told Congress that 2021 would be “a very, very strong year.”
The three major Wall Street indexes closed much lower on Wednesday. Investors sold off some of the biggest performers from 2020, which were shares of technology companies that had doubled the status of the Nasdaq. In their wake, these investors bought value-oriented stocks they felt were underpriced, and were likely to do well during the recovery.
This week alone, Wall Street has gone back and forth. Technology stocks rose as bond yields fell, since they are reliant on capital that is low cost. But they seesawed again as the week has progressed.
The 10-year yield decreased roughly 1.6%. On Wednesday, the value-oriented shares closed flat, which outpaced a 1.4% decline in what are termed as growth stocks.
David Kelly, a chief strategist for JPMorgan Asset Management, said investors are focusing on the yield of the benchmark 10-year Treasury note. Their decision is whether there would be room for long-term interest rates to run. As he explained:
“We’re in a little bit of a lull here. We know that the economy is primed to begin to really accelerate in the second quarter. But we haven’t seen that acceleration yet so that’s what we’re waiting for.”
In early March, factory activity in the U.S. picked upas new orders increased. Disruptions in the supply chain, though, put a lot of cost pressures on these manufacturers. This, in turn, has caused some fears of inflation to come into focus.
David Yepez, the lead equity analyst and portfolio manager at Exencial Wealth Advisors, said:
“Everybody’s bullish about the prospects of a recovery right now. In order for the market to bottom, we need to have more fear, and I don’t feel like the market has fear right now.”
Crude oil prices rebounded from a 6% decrease in the last session. That helped financials gain 0.4%, energy increase 2.5% and industrials increase 0.7%.
For the indexes as a whole, all three major ones slipped. The Nasdaq Composite decreased 2.01%, or 265.81 points. The S&P 500 dropped 0.55%, or 21.38 points. And the Dow Jones Industrial Average dropped 0.01%, or 3.09 points.
The volume on the exchanges was done, too. There were 12.72 billion shares exchanged recently, compared to 14 billion over the previous 20 days of trading.
Some of the biggest declining companies were tech stocks such as Facebook, Microsoft, Apple and Tesla.
Intel Corp. decreased 2.3% after they surged a bit following their announcement to spend $20 billion to build new factories in Arizona and open these factories to outside companies. They are working to build their capacity to make chips that are used in many different technologies today.
Bitcoin has gained, though, following Elon Musk saying his company, Tesla, would accept the cryptocurrency as a form of payment for their electric vehicles.