Morning Minutes

Banking Problems Drag World Markets Downward While Gold Rallies

morning-minutes-featured-image-gold-650x400

Share:

Facebook
Twitter
LinkedIn
Email
Print

It has been a good news, bad news evening and morning for banks and the markets. On the positive side, the Fed and the US Government stepped in with a plan to backstop depositors at Silicon Valley Bank in a bid to shore up confidence in the banking system and put an end to weekend runs on banks.

On the negative side, US regulators had to step in and support a second bank, New York based Signature Bank, known for cryptocurrency lending, and over in the UK, HSBC stepped in and took over Silicon Valley Bank UK. Even with the backstop, a number of US regional banks are getting hammered in premarket action, including First Republic down 64.7%, PacWest down 39.6%, Comerica down 19.8%, and Zions Bancorp down 18.2%.

US index futures were trading flat to moderately positive last night, but by the light of day today, some of that shine has faded. Dow Futures are down 0.6% while NASDAQ futures are up 0.2%. Overseas, the Dax is down 2.8%, the FTSE is down 2.4%, and the Nikkei is down 1.1%, but the Hang Seng rose 1.9%. Commodities are dropping this morning led lower by WTI Crude Oil falling 5.1% and Copper falling 2.3% suggesting concern over the health of the world economy has increased and the outlook for resource demand has weakened.

With stresses in the banking system potentially making it more difficult for the Fed to keep raising interest rates, the US 10-year treasury note yield has dropped toward 3.45% after trading in the 3.90s% most of last week. Gold has benefitted from capital looking for safer havens, rising 2.0%, while other currencies have benefitted from a general decline in the US Dollar with the Yen gaining 1.7%, while the Euro, Pound and Loonie are up 0.4%-0.5% so far today. Cryptocurrencies are on the rebound today with Bitcoin up 4.2% and Ethereum up 2.5% but they are still off from overnight highs.  

Away from the current banking crisis, it’s a busy week for economic news headlined by US consumer prices tomorrow, US retail sales and producer prices on Wednesday and a European Central Bank meeting on Thursday. It’s a quiet week for earnings with FedEx on Thursday being the most notable reporter.

Subscribe to the Morning Minutes:

Today's earnings reports and market activity, delivered right to your inbox.

Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
ccieszynski@siawm.com
+1 (647) 282-4428

Read More

Legal and Regulatory Disclosures

Terms and Conditions:
This information is for Investment Advisors only. The website is for informational purposes only and is not intended to provide a complete description of SIA Wealth Management’s products or services. Past performance is not indicative of future results. It should not be construed as investment advice or relied upon in making an investment decision. Products and services of SIA Wealth Management are only offered in jurisdictions where they may be lawfully offered for sale. The information contained in this Website does not constitute an offer or solicitation by anyone to buy or sell any investment fund or other product, service or information to anyone in any jurisdiction in which an offer or solicitation is not authorized or cannot be legally made or to any person to whom it is unlawful to make an offer of solicitation. All products and services are subject to the terms of each and every applicable agreement. It is important to note that not all products, services and information are available in all jurisdictions outside Canada.

SIA Wealth Management Inc. (SIAWM) specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, Advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIA Wealth Management Inc. nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.

INTERNET EXPLORER NOTICE