Fri May 5, 2023

Stocks Move Lower To Kick Off May

~ Peter Lynch Good evening: Despite the prevailingly negative sentiment about the market, we entered May with the S&P 500 almost exactly where it was one year ago: it closed...

Fri May 5, 2023

As regional banks pressures spread, S&P 500 faces headwinds. But look for possible near-term bottom of banks (per Newton). April Jobs and CPI are next 2 key data points.

At the start of the week, I was hopeful that the combination of Fed decision day (5/3) and soft readings on labor (JOLTS, employment report) would cause markets to constructively...

Wed May 3, 2023

MAKE OR BREAK WEEK: JOLTS show the "bro"-cession becoming more visible in data and possibly April jobs (this Fri). Despite market weakness past few days, risk/reward positive on Fed "dovish" +25bp hike.

The S&P 500 closed a year ago (4/30/22) at 4,132 and closed April 2023 at 4,169. Yes, the S&P 500 is exactly flat with where it was one year ago....

Wed March 29, 2023

Aftershocks part 3: Ripples still widening. Technology borrowing costs now 63bp LOWER than banks and VIX closed below 20 1st time since SVB.

It has been nearly 3 weeks since the sudden failure of SVB and the aftershocks continue. The biggest impact from the banking crisis is the market's expectations for Fed policy...

Mon March 27, 2023

Even as banking crisis still expanding, FAANG/Tech nearly recovered entire 2022 losses

The scope of the banking crisis continues to edge wider, with additional regional banks seeing pressure by investors (bonds well under par) and over the weekend, a Bloomberg article noted...

Fri March 24, 2023

Post-March FOMC, Powell cited "tight" (regarding policy/banks) 23 times vs 8 in Feb = Fed reaction function changing. 5 reasons Technology/FAANG and Bitcoin holding up, despite credit/rates turmoil.

Two weeks ago, the collapse of Silicon Valley Bank (SVB Financial) triggered the current financial crisis and these aftershocks continue. The severity of the shock is far more evident in...

Mon March 20, 2023

Aftershocks Part 2: UBS/CS merger staves off failure, but confidence shaken for bank stakeholders = markets now "reaction dependent" and Fed might do so. 4 signs to see first signs the crisis ebbing. Stay OW Tech + Bitcoin.

Over the weekend, $UBS announced plans to acquire Credit Suisse, in the latest action to contain the widening financial crisis. A total of 4 notable events took place since Friday,...

Fri March 17, 2023

Indexes Finish Higher Amid Banking Chaos

Good evening: Turmoil in the banking sector has left many investors with flashbacks to 2008’s GFC and even the 1980s savings and loan crisis, though some–including our Head of Research,...

Wed March 15, 2023

SVB informs clients "back to business" yet carnage in FRC bonds, CITI+CS CDS (blowout) and KRE banks down 20% = Monetary Policy is finally "biting" = Fed can take foot off the gas. Ex-FAANG, S&P 500 P/E 14.3X ('24E), not demanding.

On Monday evening, the new CEO of Silicon Valley Bank (SVB) sent an email to clients informing them SVB "is open and conducting business as usual." I mean anyone would...

Mon March 13, 2023

INTRADAY ALERT: Aftershock part 1... Markets now see Fed cuts by YE as inflation expected to be "dead in its tracks" driven by possible job losses/disinflation by credit-tightening and VC-shock. Still near-term after-shocks.

There are some important developments taking place in financial markets this morning that warrant flagging. These are consistent with our comments from our First Word this am, but show a...

Mon March 13, 2023

Post-SIVB failure, 3 likely lingering impacts: job gains slow (start-ups), bank capital costs rise (tighter FC) and biz/consumer confidence hurt (spend) = lowering trajectory of Fed hikes, +25bp or possibly pause.

The dominant news over the coming weeks will likely be the lightning fast failure then resolution of SVB Corp ($SIVB, aka Silicon Valley Bank) and the corresponding second order impacts....

Fri March 10, 2023

S&P 500 Posts Worst Week Since September

Good evening: “How low can stocks go?” That was the ominous headline in _The Wall Street Journal_ 14 years ago this week as the Dow had fallen four straight weeks,...