The major indexes put in a strong first quarter this year with the S&P 500 gaining 3.7%, the NASDAQ surging over 6%, and the Dow adding 3.6%. In fact, this year’s first-quarter ranks as one of the best in a number of years. Remarkably, the market has been able to push consistently higher despite persistent fears about increasing inflation and even with crude oil prices currently trading at well above $65 a barrel.

Because the Fed has stated it would be more data-dependent in making future interest rate decisions, traders continue to watch incoming economic releases almost obsessively, trying to anticipate what each piece of data will mean to the Fed in terms of its interest rate hiking campaign. Economic news releases have been difficult to interpret overall: While a slowing growth rate in factory orders announced today eased inflation fears somewhat, the recent upward revision of fourth-quarter GDP numbers (as one specific example) has some economists anticipating that inflationary pressures will creep up slowly.

In recent days, the equity market has focused more on the bond market, where yields have been on the upswing. This week alone, the yield on the benchmark 10-year note rose from 4.67% to 4.85%.

Looking ahead to the coming week, the March employment report (payrolls data) may have the most market-moving impact and could set the tone for April. This data is scheduled for release on Friday.

© HGH Associated Press

News Archive (from 1/1/2006 until 3/31/2006)