North American News
US stocks mixed. Dow and S&P close higher for the 3rd consecutive day
- Nasdaq moves lower
The major US stock indices are closing mixed on the day. The Dow and the S&P are closing higher. The Nasdaq fell. Higher interest rates took some of the wind out of some of the high tech mega cap stocks which become a “safe haven” through the banking crisis.
Energy, financials and industrials led the gains today.
The final numbers are showing:
- Dow Industrial Average Rose 194.53 points or 0.60% at 32432.09
- S&P index rose 6.55 points or 0.16% at 3977.53
- NASDAQ index fell -55.11 point or -0.47% at 11768.85
- Russell 2000 rose 18.74 points or 1.08% at 1753.67
Shares of the regional bank ETF – KRE – rose $0.38 or 0.87%. First Republic rose $1.49 or 12.06% year
Shares of Microsoft fell by $4.34 or -1.55% to $276.23. He moved up some 15% from the low in March to the high March. Nvidia was also lowered today by $-2.29 or -0.86% to $265.50. It moved up 23% from the March low to the March high reached last week.
Dallas Fed March manufacturing index -15.7 vs -13.5 prior
- Dallas Fed manufacturing business survey
Details:
- Production index +2.5 vs -2.8 prior
- New orders index -14.3 vs -13.2 prior — 10th month in a row negative
- Growth rate of orders -15.2 versus -16.9 last month
- Employment +10.4 versus -1.0 last month
- Hours worked +2.6 versus +4.9 last month
- Capital expenditures +2.9 versus -1.3 last month
- Wages and benefits +30.5 versus +32.7last month
- Prices received +7.0 versus +15.8 last month
- Prices paid for raw materials +20.3 versus +25.1 last month
- Finished goods inventory +6.6 versus -3.0 last month
- Shipments -10.5 versus -5.0 last month
Fed’s Barr: Examining whether more-stringent standards would have helped SVB
- Comments from Barr in Congress
- Staff at Federal Reserve briefed Fed board about interest rate risk at SVB and other banks
- SVB had inadequate risk management, supervisors found deficiencies in its liquidity risk management near the end of 2021
- It appeared contagion from SVB could be far-reaching and damage broader banking system
- We are prepared to use all of our tools for any size institution as needed to keep system safe
- Recent actions demonstrate we are committed to ensuring all deposits are safe
Commodities
Gold ‘s Wild gyrations in rates markets unlikely to spark a change in trend – TDS
Wild whipsaws in rates markets associated with banking stress newsflow have weighed on Gold prices to start the week. However, the trend for the yellow metal is unchanged, strategists at TD Securities report.
Gold has only seen lackluster interest associated with safe-haven buying
“Interestingly, the evidence suggests that Gold markets have only seen lackluster interest associated with safe-haven buying.”
“In Comex Gold markets, the crisis catalyzed some discretionary short covering, but much of the increase in long positioning has been associated with CTA buying activity. Even so, marginal liquidations from this cohort are unlikely to occur above the $1,955 mark, whereas additional buying activity could be catalyzed just north of the $2,000 range.”
“The wild gyrations observed in rates markets are unlikely to spark a change in trend for Gold.”
WTI soars above $70.00 on positive sentiment and geopolitical tensions
- WTI advances on sentiment, Kurdistan oil exports halt.
- Investors shrugged off the US banking system woes after First Citizens BankShares acquired Silicon Valley Bank.
- WTI Price Analysis: Stuck in neutral to the downward trend but could rally to $80.00 once RSI turns bullish.
Western Texas Intermediate (WTI), the US crude oil benchmark, advances sharply on an upbeat sentiment. Another reason for oil’s jump was a halt to oil exports from Iraq Kurdistan and Putin’s nuclear threats. At the time of writing, WTI is trading at $71.13 per barrel.
A confidence vote in the banking system sparked a shift in market mood after First Citizens BankShares, Inc. takeover the Silicon Valley Bank (SVB). Reports emerging that US authorities are considering expanding emergency lending facilities gave another reason for hope, which was cheered by investors.
WTI’s reversed its course after a dragonfly doji emerged on its daily chart after Friday’s close. Hence, oil traders threaten to push prices to the 20-day EMA at $72.10.
In the middle east, an arbitrage case won by Baghdad halted 450K bpd exports from Kurdistan to Turkey due to Kurdistan’s need for Iraq’s consent to ship oil.
Russian President Vladimir Putin’s announcement to deploy tactical nuclear weapons in Belarus in an attempt to intimidate the West due to its support for Ukraine also contributed to the increase in oil prices. NATO described Putin’s comments as “dangerous and irresponsible:, and Ukraine called for a UN Security Council meeting.
At the same time, Russia’s Deputy Prime minister Alexander Novak commented that Moscow is close to achieving its 500K crude output, to about 9.5 million bpd.
EU News
European equity close: Strong start to the week
- Closing changes
- Stoxx 600 +1.1%
- German DAX +1.2%
- French CAC +0.9%
- Italy MIB+1.2%
- Spain IBEX +1.4%
- UK FTSE 100 +1.0%
It was a good start to the week in Europe as banking worries fade for the moment
BOE Bailey: If persistent inflation appears, further tightening would be required
- Comments from the Bank of England leader
- We have to be very alert to any signs of persistent inflationary pressures and if they become evident further monetary tightening would be required
- Evidence has pointed to more resilient activity in the economy
- Path of inflation will not be entirely smooth
- What monetary policy must do is ensure than inflation that has come to us from abroad does not become lasting
- We have seen some big strains in parts of the global banking system emerge
- When we look at the outlook for inflation today, we have to recognize that the full effect of the higher level of bank rate is sill to work its way through
- Rise in inactivity driven by early retirement seems likely to have contributed to a rise in cyclical rate
- This is part of the reason why we have had to raise bank rate by as much as we have
Other News
Doubleline’s CEO Gundlach: Economy is clearly weak
- Doublelines Jeffery Gundlach on CNBC
- Economy is clearly weak
- I think the recession is here and if you want
- that is not going to raise rates unless two year yield climbs
- Expects the Fed to cut a couple times in 2023
- Banking system is enduring uneven stress
- We are in a trading range
- If we have a recession, the Fed will have reacted very dramatically
- We will likely have monetary policy that would be inflationary
- optimal strategy is to reduce risk on strength
Goldman Sachs increases recession expectations to 35%
- Up from 25%
Goldman Sachs economist Jan Hazius has increased the chances of a US recession to 35% from 25% previously.
Hazius on March 13 said “In light of the stress in the banking system, we no longer expect the FOMC to deliver a rate hike at its next meeting on March 22,”. The Fed did hike rates by 25 basis points after markets stabilize the bit.
Cryptocurrency News
Binance sued by CFTC of regulator violations
- Binance and CZ sued
Binance Holdings, which is the world’s largest cryptocurrency exchange, along with CEO Changpeng Zhao, were sued by the US CFTC for breaking trading and derivatives rules, according to a Bloomberg report.
I don’t think crypto investors realize how devastating US regulators can be and it’s increasingly clear that they don’t want crypto trading to flourish. They did the same thing with retail FX 10 years ago and it was scorched earth.
The lawsuit is in regards to not registering with the CFTC while allowing US residents to buy and sell derivatives. Other reports say the IRS and other US officials have been investigating Binance’s anti-money-laundering compliance and the SEC has been scrutinizing whether the exchange supported trading of unregistered securities.
Bitcoin is down 3.3% and ethereum about the same. The losses accelerated after these headlines but that’s also an indication of worsening sentiment broadly. In addition, fading fear about US banks is diminishing demand for crypto safety.
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