As the calendar turns to spring, investors are hoping that the March Madness in stocks will end. They may have to wait a bit. This week, all the major indexes closed below their 200-day moving averages. This is a technical indicator that can signal that investor psychology is becoming bearish.
That sentiment is being fed by government data that shows inflation remains stubborn. That will likely keep the Federal Reserve from lowering interest rates, and the latest chatter includes a potential move higher.
But investors have been willing to overlook troublesome data before. What’s different now is the overlay of the conflict with Iran. Questions linger over how long it will last and whether it will escalate. The answers to those questions will dictate energy prices, which are a direct indicator of consumer sentiment.
