Equity markets remain shaky

Stock markets remain wobbling despite rising on Monday as the banking crisis continued to hit confidence. The weekend deal by UBS and Credit Suisse (CS) had helped to prevent a wider contagion arising from the fallout of Silicon Valley Bank. Investors are assessing the health of lenders and safe haven asset like gold remains on track to sustain their highest closing in 52 weeks if the pressure mount on the financial condition.

It is also the second weekend that central bankers are coming together to push a string of confidence and end the crisis. Yet, history shows possible secondary effects such as on the bond markets where assets are written off in a crisis.

First Republic needs another lifeline of confidence and support

After our positions in CS were hit, our positions now First Republic remain precarious as the stocks plunged heavily despite a recovery seen in regional banks. Despite many big banks plunging deposits into the banks and shoring up their liquidity, investors are still expecting more. With that First, Republic saw a massive sell-off despite news arising that Dimon is leading the talk to support First Republic in this turmoil.

There is an expectation that the deposits of $30 billion by the major banks could be converted into investments. Alternatively, a sale of the bank and an infusion of capital injections are also on the table. Regardless of the choices, I will probably need to take some further hits from our positions as we try to fence-ring our portfolio from further fallout. This will be the third week of a downturn for our portfolio.

It also comes at a time when its credit rating was cut from BB+ to B+ as S&P downgraded its bank credit rating.

What’s on the menu today?

At 10 pm, we will have existing home sales data released. We should see a climb from 4M to 4.17M for the period.

It is 21 March, Tuesday, 8.20 am in Singapore and 8.20 pm in New York. Our other positions such as in Bed Bath and Beyond are also in crisis and we would have to write that off in our portfolio potentially with Frist Republic in yet another setback.

Till then, I shall update you on the latest development in the market as I review my portfolio once again to better position for a challenging and downbeat moment.

From your lovely trading buddy.