Silicon Valley Bank, Signature Bank and Credit Suisse may have been taken care of, but investors, depositors and the world's central banks remain on edge. As a result, the public credit markets resemble a chunk of Arctic ice with only the U.S. Treasury able to sell debt in this environment.
It looks like I wasn't the only one without "Bank Run U." in my March Madness bracket this month. We knew that Silicon Valley Bank was sideways on its asset-liability management because it had been disclosing it in financial statements over the last few quarters.
Very timely that the celebration of Holi begins next week because any chart of the S&P 500 Index today is showing a crashing of red, green, blue and yellow as the big stock index collides and bounces at its major moving averages and trendlines.
No one said that investing in 2023 was going to be easy. But this year could stretch our brains in some new directions. While last week showed a pause in some important inflation measures (PMI on Tuesday, PCE deflator on Friday), the economic data remains healthy in many areas of the economy.
While the actual bears are sleeping away from our historic snowfall, the Wall Street bears have come out in force to try and scare investors. Three months ago, there was a near consensus call for a Fed driven 2023 recession leading to lower earnings and lower stock prices. But given February's surprising economic strength, the bears have needed to adjust their calls toward higher rates for longer that will now weigh on equity valuations.
The soft landing/no landing scenarios continue to gain traction in the markets. The consumer economy is picking up strongly. The financial markets have improved. Even the corners of many CEO's mouths are lifting a few millimeters.
There is a place for that stack of 2023 recession forecasts currently saved on your desktop. I know it is a big pile because I have the same one. Time to trash them all. I am beginning to wonder if the economists and strategists on Wall Street even know where Main Street is located?
I can't recall a bigger financial news, data and decision release week than this one. Central bank decisions are coming from the Fed, European Central Bank, the Bank of England and Brazil. Data releases on U.S. jobs, U.S. ISM, Euro inflation, Euro GDP plus an OPEC meeting.
A new year and a new zodiac sign. If the tiger's job last year was to hunt, kill and devour the public markets, then mission accomplished. Let's now hope that this year's rabbit will stay alert and outrun anything that might try and tackle the markets.