Fear of further trouble in the banking sector created a cloud of anxiety around the market. The Federal Reserve (Fed) has a chance to intervene next week. Following Tuesday’s and Wednesday’s meetings, the central bank could raise the federal funds rate by another quarter of a percentage point. It will certainly release new quarterly forecasts for the economy, including forecasts for inflation and interest rates. In Friday’s futures market, the odds of a quarter-point rate hike by the central bank were around 70%. “Next week is going to be a shaky one because it depends a lot on what the markets do when the Fed meets,” said Ethan Harris, head of global economic research at Bank of America. rice field. BofA expects the Fed to raise rates by 25 basis points on Wednesday, as does JP Morgan. But Goldman Sachs economists expect the Fed to pause. A basis point is equal to 0.01 percentage point. “If there are no bank failures and bank stocks are more stable on Monday and Tuesday, we can let go of bank stocks, but it will be very risky.In our view, bank stocks are suspended. will do,’ he said. George Gonsalves, Head of US Macro Strategy at MUFG, said: Investors have been worried about the health of other smaller and regional banks since last Friday’s shockingly quick failure of Silicon Valley Bank and the subsequent collapse of its signature bank. The government agreed last weekend to protect depositors at Silicon Valley Bank and Signature Bank, which closed over the weekend. First Republic Bank was at the epicenter of regional sales. On Thursday, a consortium of banks stepped in to deposit his $30 billion into First Republic, but its shares continued to be criticized on Friday, as did other local banks. “The good news is that the ambulance arrived at our house so quickly. The bad news is that we needed an ambulance,” said Art Hogan, chief market strategist at B. Riley Financial. “Everyone moved to strengthen these banks. The bad news is that they needed to be strengthened….We still have more questions than we have answers. Some strategists expect the stock to remain highly volatile and likely test the October lows. .SPX 1Y line stx “I wouldn’t be surprised if the market retested and she didn’t break past her October low, but that’s not saying ‘out of the woods, that was the bottom’ No,” said Liz Ann Sonders. Chief Investment Strategist at Charles Schwab. “I think it’s still going to be pretty choppy. The good news from a valuation standpoint is if the Fed is done, or nearly done.” Did. The S&P 500 saw him rise 1.4%, while the Dow saw him lose a meager 0.2%. The Nasdaq rose 4.4% this week as big tech companies such as Apple, Microsoft and Alphabet attracted investors. His two largest stocks, Apple and Microsoft, hit a record 13.5% of the S&P 500’s market capitalization as of Friday morning, according to Todd Sohn of Safeguard Strategas. Other stocks sold off, but Apple saw him up 4.4% in his one week, while Microsoft and Alphabet both saw him up 12.5%. AAPL MSFT 1Y line tec “They are now being treated as safe,” Mr Sohn said. “Equity alone rarely has more than 6% weighting.” Sonders of Schwab said the Big Tech acquisition was a safe haven for the sector itself. “Big tech a year ago looked pretty bad just because the valuations were so stretched. There was carnage there. Valuations are more reasonable, but not cheap,” she said. She said there was likely still some influence from Silicon Valley banks, which had many startups and technology companies for both borrowers and depositors. “I think there was a flight of capital into well-capitalized tech stocks that acted as safe havens,” she said. Peter Boockvar, chief investment officer at Bleakley Financial Group, said it might be overkill to point out the names of tech companies. “If the customer does well, so does the technology,” he said. “When the U.S. economy goes into recession, they buy less cloud services. They buy less software. Economists expect lending by banks, especially regional banks, to tighten, which could push the economy into recession. “I don’t think people appreciate the mishaps that are happening here. Regional banks are losing the momentum to lend like they used to. Regional banks account for nearly 40% of bank lending,” he said. said. “A local restaurant that wants to open two new locations isn’t going to go rent from Goldman Sachs. There’s some data worthy of a look: on Friday, February’s durable goods report will be followed by the release of flash S&P Global PMI data for services and manufacturing. St. Louis Fed President James Bullard will be the first Fed official scheduled to speak after Fed Chair Jerome Powell’s post-meeting briefing Wednesday afternoon. Bullard will speak Friday at 9:30 a.m. Equity investors will also be paying close attention.In the Treasury market, yields fluctuated and were much lower during the week.However, the swing was in both directions. Um, below 4% Friday was 3.82% Yields move inversely to bond prices US2Y 1Y line bonds Bespoke says 2-year bond yields 6 “It’s been up more than 20 basis points for a straight day, so I wouldn’t be surprised if it resulted in some losses,” MUFG’s Goncalves said. Concern. “I hope the cold minds will win if the Fed’s program is implemented.” CALENDAR 1 WEEK AGO Monday 10:00 am Quarterly Financials Tuesday FOMC Starts Meeting 10:00 am Existing Home Sales Wednesday 2:00pm FOMC Statements and Forecasts 2:30pm Fed Chairman Jerome Powell Briefing Thursday 8:30am New Home Sales Friday 8:30am Durable Goods 9:30am St. Louis Fed’s James Bullard Governor 9:45am S&P Global Manufacturing PMI 9:45am S&P Global Services PMI
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