By Bill Hornbarger, Chief Investment Officer
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Three Things to Watch
- The week ahead is expected to be dominated by news and performance of the banking sector. Sunday night, banking regulators announced they will backstop Silicon Valley and Signature Banks, and the Federal Reserve announced a new Bank Term Funding Program to help troubled institutions. Equity futures jumped on the news and hopes are that this will stabilize the stock prices in the bank and regional bank space.
- The inflation report for February will be released on Tuesday. CPI is expected to be up 0.4% month-over-month with overall inflation declining to 6% and core CPI falling slightly to 5.5%. Inflation has been stubbornly resilient and last month, the inflation readings were generally stronger than expected.
- Leading economic indicators are expected to be negative for the 11th consecutive month and retail sales for February are also expected to be negative. This week’s reports should help shape next week’s Fed decision on the size of the expected interest rate hike (25 or 50 basis points).
Three Things to Know
- The World Health Organization characterized Covid-19 breakout as a pandemic on March 11, 2020. The first cases of novel coronavirus were first detected in China in December 2019, with the virus spreading rapidly to other countries across the world. This led WHO to declare a Public Health Emergency of International Concern on Jan. 30, 2020. (Source; WHO)
- The Federal Reserve Board has announced it will make additional funding available to eligible depository institutions to help ensure banks can meet the needs of all their depositors. It will also allow eligible collateral to be held at par (original value) on bank balance sheets. Selling securities at losses ($1.8 billion) was a contributing factor in Silicon Valley Bank’s demise. (Source: Federal Reserve Board)
- The median bank account balance in the U.S. is $5,300 and the FDIC insurance limit is $250,000. (Source: Charlie Bilello)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.