As fear and panic eased, major equities recovered significant losses from the earlier banking woes. Still, market participants look closely at how monetary policy evolves as most expect a tightening effect after the bank turmoil.
Without major data release on Monday, it was a calm of sea as the weekend brought no fresh wounds to the banking sector.
The consolidation seen in regional banks
There are signs of healing after we read about First Citizens (FCNCA) buying over Silicon Valley Bank’s deposits, loan book, and branches network. It comes after regulators eased conditions, and provided lifeline to the acquisition by being willing to shoulder part of any losses or gains from SVB’s commercial loans. This sent relief rebound in many regional banks, such as First Republic Bank, which climbed much higher during the session.
Still, I remain cautious about our outlook. The macro uncertainty must see significant easing before we can see the meaningful appreciation of the S&P 500 towards its year high of 4200.
Bitcoin and digital assets seem to consolidate; wait for Friday before major movement
As the Fed is expected to be less aggresive in its rate hike in the wake of financianl sector stress, the strong performance of cryptocurrency is taking a breather.
The gain appeared to be fading, and Friday could be another major catalyst day. The upward charm appears to be weakening, and Bitcoin has to break a psychological level of US$30,000 market for us to see a meaningful upswing from the current level.
Inflation data back in focus
On Friday, we will receive another piece of inflation data, the Personal-Consumption Expenditures (PCE) index. As we have shared numerous times, this is the Fed’s golden standard of inflation indicator. So watch out for this and stay nimble for the week.
It is 28 March, Tuesday, 8.55 am in Singapore and 8.55 pm in New York. It is a brand new week, and I hope you have a prosperous trading week as we wrap up a heart-pumping March.
From your lovely Trading Buddy.
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All is well.