MARKETS TODAY March 24th, 2023 (Vica Partners)
Good Afternoon,
Yesterday, US equities bounced-back on a late day rally with S&P 500 ending the session up 0.30%. Tech/ Fang+ lead advancers driven by the mega caps. 7 of 11 of the S&P 500 sectors were lower with Energy and Financials as the biggest decliners. Yields dropped across the curve, Oil futures fell, USD Index was up, Gold up and Bitcoin topped $28k again.
Overnight, Asian markets finished lower with shares in Hong Kong leading the region. The Hang Seng was down 0.67% while China’s Shanghai Composite was off 0.64% and Japan’s Nikkei 225 lower by 0.13%. The Fed released its weekly balance sheet update which showed that use of the new bank credit facility (BTFP) was up >$40B while the discount window usage remained high >$110B.
Premarket, European markets finished lower today on Deutsche Bank concerns, with shares in France leading the region. The CAC 40 was down 1.74% while Germany’s DAX off 1.66% and London’s FTSE 100, lower by 1.26%. S&P futures opened <0.7%> below fair-value.
In US Markets today, Indices rallied late Friday as Bank optimism improved with the SPDR S&P Regional Banking ETF ending up >3%. The S&P 500 closed at 3971, ahead of 100d, 200d ma and led Indices gainers. 6 of 11 of the S&P 500 sectors were lower/ Real Estate +1.91% and Utilities +1.77% outperform. USD Index up while Yields, Oil futures, Bitcoin and Gold all decline.
In economic news, U.S. manufacturing PMI beat expectations, setting a 5 month high. The U.S. Services Business Activity Index easily beat expectations, as the rise in output was the fastest since April 2022.
Takeaways
- SPDR S&P Regional Banking ETF up >3%
- Equities rally late and hold gains for 2nd consecutive day
- Key Indices close moderately higher, S&P 500 and Russell 2000 lead
- Yields mostly decline across the curve
- 6 of 11 of the S&P 500 sectors were lower/Consumer Discretionary, Industrials underperform.
- Healthcare Sector has been trending up in March
- Fear & Greed index rating = 33/ Fear
- Bloomberg Commodity Index rises
- Crude Oil Futures continue to fall
- Bitcoin/ Gold down, USD Index up
- U.S. PMI’s beat expectations
Last word, As rates hikes begin to reduce consumers spending power i.e. the time lag effect. Pro Tip, look to the Health Care sector to hedge recessionary pressures in your portfolio, build capital and even collect dividends. Keep in mind that healthcare is not an optional spend!
Sectors/ Commodities/ Treasuries
Key Indexes (50d, 100d, 200d)
S&P Sectors
- 6 of 11 of the S&P 500 sectors were lower. Consumer Discretionary -0.48%, Industrials -0.41% underperform/ Real Estate +1.91% and Utilities +1.77% outperform.
Commodities
US Treasuries
Economic Data
US
- Durable goods; period Feb., act -1.0%, fc -0.3%. prev. -5.0%
- S&P Global flash U.S. manufacturing PMI; period March, act 49.3, fc 47.0, prev. 47.3
- S&P Global flash U.S. services PMI; period March, act 53.8, fc 50.3, prev 50.6
- Summary: The S&P Global US Manufacturing PMI increased to 49.1 in March of 2023 from 47.3 in February, beating forecasts of 47. The S&P Global US Services PMI rose to 53.8 in March 2023 from 50.6 in January, easily beating market expectations of 50.5. Fed Bullard – “Fed’s policy rate will need to rise as bank stress eases”.
News
Company News/ Other
- Deutsche Bank tumbles as jittery investors seek safer shores – Reuters
- Copper price to surge to record high this year, Trafigura forecasts – FT
Central Banks/Inflation/Labor Market
- Deutsche Bank shares plunge, default insurance at highest since 2018 – Reuters
- Central Banks Shed Most US Debt Since 2014 as Dollar Needs Jump – Bloomberg
China
- China updates online advertising rules to tame algorithms that have been a powerful force behind success of apps like TikTok – South China Morning Post
- Apple CEO Tim Cook to meet top China officials amid growing risks of supply chain decoupling with the US – South China Morning Post
Market Outlook and updates posted at vicapartners.com
