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Momentum Stocks Bounce; ECB Rate Decision Looms

David Becker
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Momentum Stocks Bounce; ECB Rate Decision Looms

Stocks have started the last day of the first quarter on a positive note, and social media titan Facebook (NASDAQ:FB) seems to have found support. Momentum stocks have been under significant pressure over the past two weeks, as investors look for a new leadership to drive prices higher. Facebook has been one of the leaders as the Nasdaq soared to 14 year highs, but the decline of the benchmark stock has spelled trouble for the broader technology bourse.

This week investors will need to absorb a plethora of economic data points that will likely set the course for stocks during the first month of the second quarter. On Tuesday the ISM will release its manufacturing report, which will be follow on Wednesday by the ADP employment report and Friday will see the release of the BLS’s non-farm payroll report. The employment number released on Friday will be the first payroll report in which the Fed has dropped its target threshold for 6.5% unemployment. Even more important might be the ECB meeting which is scheduled on Thursday.

On Thursday, the ECB is scheduled to meet to determine monetary policy for the EU. Expectations are that the ECB will finally act in ways that will jumpstart the EU economy. Inflation is very subdued which is generating concern for central bankers. US investors are also expecting additional stimulus which has helped buoy the US market.

FB has tested the 200-day moving average as the relative strength index moved close to the oversold trigger level of 30. The Accumulation distribution line has remained elevated despite the decline in the stock price which generally reflects strong buying interest in the stock.

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