February’s CPI report should be a major market driver in the coming week as investors focus on the continued impact of SVB Financial Group’s Silicon Valley Bank shutdown. Tuesday’s consumer price index report is the last major inflation data ahead of his March 21 and 22 meetings of the Federal Reserve. Other key data for next week include his February retail sales and producer price index on Wednesday, and consumer sentiment on Friday. “It will be the last CPI report before the Fed meeting,” said Michael Arone, chief investment strategist at State Street Global Advisors. said. Silicon Valley Bank troubles overshadowed pretty much everything else in the market on Thursday and Friday as investors sought safety in bond markets and sold bank shares. fell to 3.69% by Friday afternoon. Meanwhile, the two-year US Treasury yield recorded its biggest two-day drop since 2008. Yields move inversely to prices. The SVB came under pressure after it revealed Wednesday that it lost $1.8 billion of his assets in an asset sale and is seeking more money. “The market is shooting first and then asking questions,” he said. The bank failure is the biggest since the financial crisis, and he is the second biggest after the Washington Mutual failure in 2008. Major bank stocks took a big hit on Thursday, but Friday’s losses were stable or smaller, prompting investors to selectively target smaller banks. and local banks. First Republic, for example, was down nearly 10% on Friday afternoon, while PacWest was down 35% of him. Regional stocks on the KRE 1Y line “This could be a sign of his Fed tightening, so there is some concern about contagion now. Stocks like FirstRepublic are also down,” Arone said. says. “Investors are starting to wonder if this is going to be a more systemic problem. There are certain customers who are suffering, as is the case with companies at Arone, which so far said there is no indication that the SVB problem will become a bigger problem for the banking system. Silicon Valley banks were shut down by regulators on Friday morning.The Federal Deposit Insurance Corp. said insured depositors should be able to access their funds by Monday morning at the latest. , said the branches would reopen at that time because it was hit by a number of financial crises,” said Diane Swonk, chief economist at KPMG. But he said bank concerns won’t dictate the Fed’s rate hikes and the Fed won’t change its policy plan unless markets recover. Swonk is in the camp that expects the Fed to raise rates to 50 basis points after raising rates by just a quarter of a percentage point at its last meeting. US10Y 1Y line 1o “From the Fed’s perspective, anything the Fed does at this stage could lead to more entrenched inflation unless the financial markets are fully seized,” she said. “They are data dependent. Financial stability is important. The federal funds futures market was offering about 37% odds of a 50 basis point rate hike on March 22 as of Friday afternoon, according to CME Group’s FedWatch tool. A basis point is equal to 0.01 percentage point. Those odds were as high as 70% before the Silicon Valley Bank news started hitting the market. “Fears of an outbreak in the financial sector have overturned expectations of a more aggressive Fed,” said Ben Jeffery, U.S. rates strategist at BMO Capital Markets. Federal Reserve Chairman Jerome Powell said in congressional testimony this week that the Fed could be forced to hike rates more than expected, causing yields to rise sharply and then reverse. rice field. Inflation data are now being closely monitored as very hot numbers could mean the Fed will become more aggressive. However, investors have taken note of the fact that average hourly earnings rose less than expected, which is seen as a good sign of inflation. According to Dow Jones, economists expect his CPI to rise by 0.5% or 6.1% year-on-year. This compares to his 0.5% increase in January, and a 6.4% annualized pace. “It could be a little hotter. Even after the January heat, retail sales could be a little higher than expected,” Swonk said. She added that Friday’s February jobs report gives some clues as to what other data might look like. In terms of market developments, Swonk said he was looking specifically at bond ETFs because investors were worried about banks. “My biggest concern, especially in the Treasury market, is the fact that ETFs are being used as Treasuries,” she said. [bank] Collateral and I don’t know what all these ETFs contain. Uncertain unknowns because of the uncertainty,” Swonk said. Stocks ended the week sharply lower. The S&P 500 fell 4.6% to 3,861.Calendar Monday Earnings: Gitlab, BuzzFeed Tuesday Earnings: Lennar, Vacasa, Volkswagen 6:00 am NFIB Small Business Survey 8:30 am CPI (February) 5:20 pm Fed Governor Michelle Bowman Earnings Wednesday: Adobe, Oatly, Five Below, Pager 8:30 am Retail Sales (Feb) 8:30am PPI (February) 8:30am Empire State Manufacturing (March) 10:00am Business Inventory (January) 10:00am NAHB Survey (March) 4:00pm TIC Data (Jan) Earnings on Thursday: FedEx , Designer Brands, Lands’ End, Dollar General, Signet Jewelers, Jabil 8:30 am First Unemployment Claim 8:30 am Housing Starts (February) 8:00 am 30 minutes Import Prices (Feb) 8:30 am Philadelphia Fed Manufacturing Survey (March) 8:30 am Business Leaders Survey (March) Friday 9:15 am Industrial Production (Feb) 10:00 am Consumption Mind (March Bulletin)
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