Yesterday’s equity market rebound turned out to be a dead cat bounce. US index futures are down 1.3%-1.7% this morning while over in Europe, the FTSE and Dax are down 2.4%, while Paris and Milan are both down about 3.2%. European currencies are also getting hammered today with the Euro down 1.6%, the Swiss Franc down 0.1%, and the Pound down 0.7%

Equity market sentiment has soured this morning in indications that concerns about the banking sector have broadened out from crypto banks, to regional banks, and now to major US and international banks. Credit Suisse is down 27.5% in US premarket trading today trading at a new all-time low after the Saudis indicated they will provide no additional financial support. Meanwhile, bond rating agency Moody’s downgraded its outlook for the US banking sectors to Negative from Stable following recent problems at SVB and elsewhere. Major US banks including JPMorgan Chase, Citigroup, Bank of America and Wells Fargo are all down 3-5% in premarket action this morning.

North American economic news has been mixed today. On the positive side, US producer price inflation continues to ease as PPI growth came in below expectations (4.6% vs street 5.4% and previous 5.7%), and Canadian housing starts beat the street (244K vs street 220K). On the disappointing side, both US retail sales (-0.4% vs street -0.3%), and the Empire State Manufacturing Survey (-24.6 vs street -8.0), came in worse than feared.

Capital appears to still be moving out of risk markets like equities toward traditional perceived safe havens with Gold up 0.9% and the Japanese Yen up 1.0%. Financial and economic turmoil continue to drag on commodities with WTI Crude Oil down 1.5% and trading near $70.00/bbl, while Copper is down 3.2%.  

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Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

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