S&P 500 (SPY) Report – 03/15/23
Good morning traders!
The S&P 500 ($SPY) is trading below yesterday’s close. Let’s get into it…
On Tuesday, markets appeared to recover slightly from the banking crisis that began on Friday. Despite this, the financial turmoil may not be over yet. Although there is optimism that the issues which led to the failure of Silicon Valley Bank and others in the US won’t spread, Credit Suisse shares are plummeting to record lows in Europe as the bank faces its own challenges.
The Federal Reserve’s response to the banking crisis is also under scrutiny. If there is a lesson to be learned from the collapse of Lehman Brothers, it is that the failure of one institution can have devastating consequences. The Fed is still fighting the last war of the financial crisis, but allowing banks to borrow unlimited funds against collateral valued at par goes against what textbooks prescribe. The central bank may need to impose steep haircuts on loans in order to punish banks for failing to prepare for hard times. It is unclear whether the Fed will proceed with a quarter-point hike, cut rates, or make the bold move of a half-point hike in light of recent inflation data. Ultimately, the Fed’s next move will depend on whether any more surprises arise before their decision on March 22nd.
Over the last four trading days, the $SPY has been fluctuating between ~$380.50 and $393.00. As the market continues to trend downwards, there could potentially be some support around the lows seen on Monday. Overall the sentiment feels bearish.
Note: Moving averages are reported from the previous trading session and will change during the next trading session.
Wednesday Economic Events:
PPI 8:30am ET – High Volatility Expected
Retail Sales 8:30am ET – High Volatility Expected
Crude Oil Inventories 10:30am ET – High Volatility Expected
Fed Speaker Scheduled:
No Fed Speakers Scheduled
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