North American News
Major US stock indices experienced a strong day with significant gains across the board
- NASDAQ leads the surge to the upside with a gain of 2.48%
Major US stock indices surged today, driven by increased confidence in the banking system and a boost in tech shares due to lower interest rates. The reassurance in the banking sector began when the Swiss National Bank announced a 50 billion Swiss franc support package for Credit Suisse. Later in the US session, after Republic Bank’s shares opened sharply lower on concerns of a bank run, leading banks stepped in and pledged to provide $30 billion in deposits to the bank.
Subsequently, the Federal Reserve stated that it would offer funds to eligible banks through the discount window if they faced any shortfalls. This intervention helped Republic Bank’s shares rebound from a low of $19.80 to a high of $40. The stock closed at $34.38, up $3.22 or 10.33%. This series of supportive measures bolstered the overall market, leading to the impressive gains seen in today’s session.
Tech giants like Nvidia and Microsoft experienced gains of 5.42% and 4.05%, respectively, contributing to the robust performance of the tech sector. The final numbers for the day are as follows:
- Dow Industrial Average: up 371.98 points or 1.17% at 32,246.54
- S&P Index: up 68.73 points or 1.76% at 3,960.29
- NASDAQ Index: up 283.23 points or 2.48% at 11,717.29
Atlanta Fed GDPNow estimate for growth in Q1 unchanged at 3.2%
- Atlanta Fed model for GDP growth in the Q1 of 2023
The Atlanta Fed GDPNow estimate for 1Q growth remains unchanged at 3.2% after the import export price data and real residential investment growth
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2023 is 3.2 percent on March 16, unchanged from March 15 after rounding. After this morning’s releases from the US Census Bureau and the US Bureau of Labor Statistics, an increase in the nowcast of first-quarter real net exports was offset by a decrease in the nowcast of first-quarter real residential investment growth.
US February housing starts 1450K vs 1310K expected
- US February 2023 housing starts and building permits
- Prior was 1309K
- Building permits 1524 vs 1340K expected
- Prior building permits 1339K
US import prices for February -0.1% versus -0.2% expected
- US February 2023 import/export price data
- Prior import prices -0.2% revised to -0.4%
- Import prices -0.1% versus -0.2% expected
- import prices year on year-1.1% year on year. This was the first 12 month decline since the index fell -0.3% in December 2020. It was also the largest drop since -1.3% decline in September 2020
- Export prices +0.2% versus vs -0.1% expected. This is the first monthly increase in export prices since June 2022
- Prior export prices 0.8% revised to +0.5%
- export prices year on year-0.8%. This was the first year on year decrease since the index fell -1.0% in November 2020
Details for imports:
- fuel import prices felt -4.9% for the second consecutive month representing the largest monthly drops since September 2022. Fuel prices have not risen on a one month basis since June 2022
- all imports excluding fuel rose 0.4% in February following a 0.2% increase in January
- prices for non-fuel imports advanced 0.2% year on year
- import prices for finished goods increase for each of the major finished goods categories. Consumer goods +0.5% which was the largest monthly advance since December 2021. Capital goods prices rose 0.3% (the largest one month advance since May 2022). Automotive vehicles increased 0.2% after a 0.3% rise last month.
Details for exports:
- the price index for agricultural exports rose 1.0% following declines of -0.9% in January -2.4% in December
- excluding agricultural, nonagricultural export prices rose 0.1% after rising 0.6% in the previous month
- export prices for major finished goods categories were mostly up in February. Capital goods prices rose 0.6% (versus 0.8% in January). Consumer goods rose 0.7% in February following a 1.1% increase the previous month
Initial jobless claims 192K versus 205K expected
- Initial jobless claims and continuing claims for the current week’s
- Prior week 211K revised to 212K (the first week above 200K after seven straight weeks below)
- initial jobless claims 192K versus 205K expected
- 4-week moving average of initial jobless claims 196.50K vs 197.25K last week
- continuing claims 1.684M versus 1.715M expected
- prior week of continuing claims 1.718M revised to 1.713M
- 4-week moving average of continuing jobless claims 1.676M versus 1.678M last week
US March Philly Fed -23.2 vs -15.6 expected
- US Philadelphia-area manufacturing survey data for March 2023
- Prior was -8.9
- New orders -28.2 vs – 13.6 prior
- Employment -10.3 vs +5.1 prior
- Avg workweek -3.2 vs -2.1 prior
- Capex -3.8 vs +7.5 prior
- Prices paid +23.5 vs +26.5 prior — lowest since Aug 2020
- Future activity -8.0 vs +1.7 prior
- Delivery times -24.3vs -13.6 prior
- Unfilled orders -21.3 vs -17.0 prior
Commodities
Gold depends on whether and how quickly market situation calms down – Commerzbank
The outlook for the Gold price is currently highly uncertain. he further development of the precious metal depends heavily on whether and how quickly the market turmoil subsides and the Fed is able to raise its interest rates further, economists at Commerzbank report.
Gold would likely give up its recent gains if market mood improves
“If further bankruptcies follow or if the market increasingly prices in the risk of contagion effects, interest rate expectations could fall further and the Gold price could, in turn, receive further tailwind as a result.”
“We had previously assumed a Gold price of $1,950 at the end of the year, as we had expected that the market would only increasingly bet on a turnaround of interest rates in the second half of the year. This has now occurred much earlier due to the turmoil in the banking sector. Thus, if these continue, XAU/USD should reach our year-end forecast already in the near future.”
“If fears can be allayed, this could allow the Fed to raise interest rates further in order to curb inflation, which remains too high. In this case, Gold would likely give up its recent gains.”
“For the second half of the year, we would continue to expect Gold to recover even in this scenario, as the aggressive interest rate hikes should then start to be felt in the real economy. The market’s focus would subsequently turn to possible interest rate cuts, which should make Gold look more attractive again in relative terms.”
WTI climbs on risk-on impulse, and Saudi-Russia meeting eased fears
- WTI is recovering from falling 5% on Wednesday due to a risk-off impulse.
- OPEC: The week’s fall is blamed on sentiment shifting sour on turbulence in the financial market.
- The market sentiment improved on Swiss authorities supporting Credit Suisse.
Western Texas Intermediate (WTI), the US crude oil benchmark, gains traction after dropping to a 15-month-low at around 65.72, sponsored by a risk-on impulse. The Wall Street Journal (WSJ) reported that major banks in the US are stepping in to help First Republic Bank, an action cheered by US equities and oil prices. WTI is trading at 68.25, above its opening price by 0.03%.
Saudi Arabia and Russia’s discussion capped WTI’s fall
Additionally to the abovementioned factors, WTI is underpinned by reports that Saudi Arabia and Russia met to discuss enhancing market stability. Saudi’s energy minister Prince Abdulaziz bin Salman and Russian deputy prime minister Alexander Novak met in the Saudi capital to discuss the OPEC+ group’s efforts to maintain market balance.
Delegates from the Organization of Petroleum Exporting Countries (OPEC) and its allies told Reuters that “this week’s slide in oil prices to be driven by financial fears, not any imbalance between demand and supply, and expects the market to stabilize.”
WTI fell due to the turbulence in the financial markets. Swiss authorities backing up Credit Suisse (CS) and US Treasury Secretary Janet Yellen assuring lawmakers that the US banking system remained sound were a tailwind for WTI.
This week, OPEC and the International Energy Agency (IEA) have both predicted an increase in oil demand, but the market is still being affected by concerns about excess supply.
The IEA commented that stockpiles in developed countries hit an 18-month high, while Russian output stayed around familiar levels in February.
EU News
Major European indices take the ECB rate hike in stride
- France’s CAC up 2%
The major European stock indices took the ECB’s 50 basis point hike in stride. The indices are all closing solidly higher with the Frances CAC leading the way.
A look at the closing levels shows:
- German DAX, +1.57%
- Frances CAC, +2.03%
- UK’s FTSE 100 +0.89%
- Spain’s Ibex +1.50%
- Italy’s FTSE MIB +1.47%
- Euro STOXX index, +1.3%
ECB told ministers Tuesday that some EU banks could be vulnerable – report
- That’s not what the market wants to hear
Naturally, everything leaks in Europe and this is not a good leak for European banks, which are turning lower on this headline. Note that we’re 30 minutes away from the ECB decision at 9:15 am ET.
Other News
Group of financial institutions in talks to deposit $20 – $30 billion in First Republic
- First Republican shares have been halted
Sources say that a group of financials institutions are in talks to deposit $20 billion in First Republic and attempt to save the company, build confidence, and keep the deposit base solid. The stock has been halted and is trading at $30.14 down -$1.02 or -3.27%.
CNBC Faber: The syndicate of banks are lining up to deposit funds into first Republic
- List of leading banks are lining up
David Faber from CNBC is reporting with more details on uninsured deposits into First Republic Bank
- Bank of America, Wells Fargo, JPM, and Citibank have all pledged $5 billion
- Goldman Sachs, Morgan Stanley has pledged $2.5 billion
- Truist, PNC, U.S. Bancorp, MT and Capital One are in for $1 billion each
First Republic Bank shares are trading at $35.30 up $4.14
Cryptocurrency News
Ethereum layer-2 Arbitrum’s most awaited airdrop of 2023 is expected on March 23
- Ethereum layer-2 scaling solution Arbitrum is positioning its ARB token airdrop for March 23.
- Users will receive 11.5% of Arbitrum’s total token supply with 1.1% earmarked for DAOs.
- Arbitrum’s ARB token is expected to be a competitor to Optimism’s OP token released in May 2022.
Arbitrum, one of the largest Ethereum layer-2 scaling solutions, has announced its airdrop scheduled for March 23. The Arbitrum Foundation said that ARB will be airdropped to community members and DAOs. ARB holders will vote on key governance decisions on the Arbitrum network.
Ethereum’s layer-2 scaling solution is set to launch Arbitrum ARB token
Arbitrum is one of the largest players in the layer-2 scaling landscape. The scaling solution is finally getting a token, ARB. The project announced that community members will tentatively receive the airdrop on March 23.
ARB will mark Arbitrum’s official transition into a decentralized autonomous organization (DAO). ARB token holders will vote on key decisions governing Arbitrum One and Arbitrum Nova. These two networks allow users to transact on the Ethereum blockchain with greater speeds and lower fees.
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