Stock Market Today: March 20th - 24th, 2023

Top of the morning StonkForumers! Happy FOMC Rate Decision Day to all of you and welcome to the new trading day and a frrrrrrrrrrrresh start. Here is a quick check on those futures as we are a little under 2 hours from the cash market open.

GLTA on this Wednesday, March the 22nd, 2023!

 

Good Wednesday morning StonkForumers!

Here is this morning's pre-market news thread for those of you wanting to get a quick read before today's open-
<-- click there to read!

Hope everyone has a great trading day ahead!

 

Morning Lineup - 3/22/23 - Now Batting
Wed, Mar 22, 2023

There’s no economic data on the calendar and there’s little in the way of earnings news to focus on this morning, so for the next six hours, we’ll only have the Fed to worry about. Markets are still overwhelmingly pricing in a 25 bps hike with the current odds at close to 90%. It’s hard to imagine a rate hike given the weakening macro backdrop and the crisis in the banking sector, but those are the numbers, and at this point, there have been little signs of the problems spreading.

The fact that UK CPI just printed its sixth straight month of double-digit y/y increases and ECB President Christine Lagarde was out saying she doesn’t see clear evidence that inflation is trending down doesn’t help the cause of those calling for a pause. Those are trends literally an ocean away, though, and over on this side of the Atlantic, just about every inflation indicator we track has been trending lower. Whatever decision the FOMC makes, it’s safe to assume that there will be no shortage of critics after the fact, and we don’t envy the position that Powell is in.

Heading into today’s rate decision, most sectors have traded down over the last week with Real Estate and Energy leading the way lower. Surprisingly, in the middle of a banking ‘crisis’ Financials isn’t even the worst performing sector as it is down less than 1% over the last five trading days and isn’t even the worst performing sector on a YTD basis. Sure, it’s down over 6.5%, but Utilities and Energy are also both down more than the Financials.

While Financials, Utilities, and Energy have been a drag on the market, Communication Services, Technology, and Consumer Discretionary have been the main drivers of gains this year. Not only are they the only sectors up more than 1% on the year, but they’re also all up over 10%, so these three sectors are basically in a league of their own versus the rest of the field.



Lately, Technology has been the clear leader. It’s only the second-best performing sector YTD, but its further above its 50-DMA than any other sector, and it’s on the verge of breaking out of the sideways range it has been in for the last two months.

 

Here is a final look at today's market and futures maps, as well as how each sector performed individually at the close on Wednesday, March 22nd, 2023.

 

Spoiler: Coming up at 2pm eastern time today!

Sorry I couldn't resist!

 

Top of the morning StonkForumers! Happy Thursday to all of you and welcome to the new trading day and a frrrrrrrrrrrresh start. Here is a quick check on those futures as we are a little under 2 hours from the cash market open.

GLTA on this Thursday, March the 23rd, 2023!

 

Good Thursday morning StonkForumers!

Here is this morning's pre-market news thread for those of you wanting to get a quick read before today's open-
<-- click there to read!

Hope everyone has a great trading day ahead!

 

Morning Lineup - 3/23/23 - Always Keep 'Em Guessing
Thu, Mar 23, 2023

In foreign relations, a policy of strategic ambiguity can often be effective. Conflicting messages regarding responses to a potential action leave all actions on the table and keep the parties involved guessing regarding any reaction you might have. The US has been employing this strategy with respect to China and Taiwan. Over the years, various officials have repeatedly given conflicting messages regarding how we would respond to a Chinese invasion or if Taiwan sought to declare independence. By doing this, it keeps China from invading under the threat of a US military intervention, but by also supporting the one-China principle, Taiwan has refrained from declaring independence from China. It may not be a long-term answer, but in the short term, it maintains the status quo.

One area where a policy of strategic ambiguity may not be as effective is in the handling of a banking crisis. Within the span of under 30 minutes yesterday, we saw the heads of the Federal Reserve and US Treasury give somewhat conflicting signals regarding the US banking sector. At 3 PM Eastern, Treasury Secretary Janet Yellen told a Senate Committee that she is not considering a broad increase in deposit insurance at US banks. Besides the fact that she made somewhat contradictory remarks just a day earlier, her statement seemed to be the complete opposite of FOMC Chair Powell who said just a few minutes later in his post-meeting press conference that the Fed has the tools to protect depositors and is prepared to use them in order to safeguard deposits. Given the conflicting signals, most rational investors would not stay put thinking that there is a good chance their deposits are safe, they would step on the gas and get out of dodge!

The conflicting signals given by Powell and Yellen yesterday certainly didn’t instill a whole lot of confidence on the part of investors, and that helped spark a sharp late-day sell-off in equities towards the close. From the end of Powell’s press conference through the closing bell, the S&P 500 sold off more than a full percent to finish right near the lows of the day.

Powell made another subtle shift in his messaging yesterday. While he has tended to kick off prior speeches lately with an adamant anti-inflation message (remember Jackson Hole), that wasn’t in yesterday’s speech. Instead, he used the opportunity to highlight the ‘decisive’ actions taken by the Federal Reserve and Treasury to address and contain the crisis and keep the banking system ‘sound and resilient’. If you thought the omission of the anti-inflation message was a sign of a more dovish Powell, though, he tried to dispel any notions of that when he closed out his press conference with the statement "I mentioned with rate cuts, rate cuts are not in our base case. And you know, so that’s all I have to say, so." Always keep them guessing!

 

Here is a final look at today's market and futures maps, as well as how each sector performed individually at the close on Thursday, March 23rd, 2023.

 

Top of the morning StonkForumers! Happy Friday to all of you and welcome to the final trading day of the week and a frrrrrrrrrrrresh start. Here is a quick check on those futures as we are a little under 2 hours from the cash market open.

GLTA on this Friday, March the 24th, 2023!

 

Good Friday morning StonkForumers!

Here is this morning's pre-market news thread for those of you wanting to get a quick read before today's open-
<-- click there to read!

Hope everyone has a great final trading day of this week ahead today!

 

Morning Lineup - 3/24/23 - Markets Can't Calm Down
Fri, Mar 24, 2023

They're starting to drop like flies. The dragnet on global banks has moved on to Deutsche Bank (DB) this morning as the stock trades down over 10% following a sharp decline yesterday as well. Given the tendency of the bank to always find itself right in the middle of any issue related to banking troubles, it’s almost surprising that it didn’t happen sooner. There only potential catalyst for the decline in Deutsche Bank stock this morning is a report that suggests that the language in other CoCo bond documents gives regulators discretion to write down the value of those bonds. The fact that central banks worldwide have been happily hiking rates amid global bank runs hasn’t helped the situation.

Credit default swaps (a relatively illiquid market) for Deutsche Bank have surged to a four-year high this morning as investors poke at the bank’s stock and bonds for any evidence of underlying problems. Defenders have cited the bank’s healthy common equity tier one capital (CET1) ratio of 13.4% and the fact that the ratings agencies had been recently upgrading the bank’s credit rating, but for now, the bank’s reputation is all the probable cause the bank vigilantes need.

The trouble in European markets has made its way over to US markets as bank stocks are all trading lower, crude oil is down sharply, and treasuries are as popular as a Taylor Swift concert ticket. There have been some wild moves across financial markets in activity that has been anything but orderly. The two-year Treasury market is a perfect example where 20 bps daily moves in yield, while previously uncommon, have become the norm. Just over two weeks ago, the two-year yield was over 5%. This morning, the yield is at 3.56%. Who’s running this market? Ticketmaster?

 

Here is a final look at today's market and futures maps, as well as how each sector performed individually at the close on Friday, March 24th, 2023.