Amid the reverberations of two U.S. banks being taken over by regulators and the spread of uncertainty to European banks, stocks trended higher last week on the strength of the technology sector.
The Dow Jones Industrial Average was flat (-0.15%), while the Standard & Poor’s 500 rose 1.43%. The Nasdaq Composite index picked up 4.41%. The MSCI EAFE index, which tracks developed overseas stock markets, dropped 3.12%.1,2,3
Stocks Gain Despite Banking Woes
Stock prices gyrated as investors wrestled with banking troubles that appeared to spread to Europe. Worries of financial instability rocked financials and sent bond yields falling. While the rush into Treasuries was expected, the dash into technology stocks was a surprise. Falling yields made the high-growth names more attractive, though investors targeted their buying in high-quality companies that offered defensive characteristics, such as profits, healthy cash flows, and strong balance sheets.
When Switzerland’s central bank provided a lifeline to a troubled Swiss bank, and a group of U.S. banks provided aid to a struggling regional bank, stocks powered higher on Thursday. Banking jitters, however, returned on Friday, closing out a tumultuous week and paring some of the week’s gains.
Reverse Psychology
Less than two weeks ago, Fed Chair Jerome Powell testified interest rates might have to be hiked higher and faster. Since then, two U.S. banks were placed in receivership, sparking worries of financial instability and changing the market’s outlook on future rate hikes.
The question now is if the Fed will hike short-term rates at all. By Thursday, traders saw an 18.1% probability of no rate increase at the March Fed meeting, which concludes this Wednesday. Just a week ago, it was a 0% chance. Traders also see a 0% chance of a 50 basis point rate increase in March. A week earlier, there was a 68.3% probability. Where the market previously saw little likelihood of a rate cut this year, the probability of a rate cut by July was 63.7% by Thursday.4
This Week: Key Economic Data
Tuesday: Existing Home Sales.
Wednesday: FOMC Announcement.
Thursday: Jobless Claims. New Home Sales.
Friday: Durable Goods Orders. Purchasing Managers’ Index (PMI) Composite Flash.
Source: Econoday, March 17, 2023
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
This Week: Companies Reporting Earnings
Tuesday: Nike, Inc. (NKE).
Thursday: General Mills, Inc. (GIS), Darden Restaurants, Inc. (DRI).
Source: Zacks, March 17, 2023
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
Howard: The market is teetering on the trend line of going negative, now is not the time to be a bull
Vance Howard, CEO and portfolio manager at Howard Capital Management, discusses how the banking crisis events in the U.S. and Europe have changed his mindset over just how fully invested people should be right now. [WATCH THE FULL INTERVIEW HERE]5
This communication is issued by Howard Capital Management, Inc. It is for informational purposes and is not an official confirmation of terms. It is not guaranteed as to accuracy, nor is it a complete statement of the financial products or markets referred to. Opinions expressed are subject to change without notice.
5 Things You Can Find on IRS.gov
The IRS website has a wealth of information outside of just tax filing information. Here are some things you can find on the site that might help you as a taxpayer:
- The Taxpayer Bill of Rights - This set of fundamental rights tells you what to expect when dealing with the IRS.
- Resources on how to apply for 501(c)(3) status - There are webinars and resources to help organizations apply for and maintain their tax-exempt status.
- Information on IRS tax volunteer opportunities - Learn how to give back and help people file their taxes.
- Information on the latest tax scams - Know what to look out for and how to stay safe.
- The Interactive Tax Assistant - Get personalized answers to your tax questions.
*This information is not intended to substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax professional.6
Spring Showers Bring… Rainwater Collecting?
We all know the saying, “April showers bring May flowers,” but spring showers also bring an excellent opportunity to collect rainwater! Collecting rainwater is a great way to conserve water, decrease water bills, lower demand for freshwater resources, slow erosion in dry environments, and reduce flooding.
Collecting rainwater at home can be simple. One way is to collect the runoff from your gutter in a bucket or container. You can then use that water for gardening, watering indoor plants, filling the toilet tanks, washing your car, or storing it as emergency water in the case of a fire. While rainwater collection is legal in all 50 states, be aware that some states have restrictions on collecting and using it, so check them before you begin!7
Lemon Yogurt Breakfast Cake (Ciambella)
Pair it with a good cup of coffee and you've got the start to a great day.
Servings: 12
Time: 45 mins
Ingredients:
DRY INGREDIENTS
- 2 cups (or 250 grams) all purpose flour
- 2 tsp baking powder
- 1/4 tsp salt
WET INGREDIENTS
- 2 large eggs, at room temperature
- 3/4 cups (or 157 grams) granulated sugar
- 3/4 cup (180 grams) full fat yogurt
- zest from 1 or 2 lemons
- 1/4 cup (60 ml) fresh squeezed lemon juice, zest your lemon before juicing!
- 3/4 cup (175 ml) vegetable oil
Directions:
- Preheat the oven to 350F
- Butter and flour a standard 9 inch bundt pan.
- Whisk together the dry ingredients and set aside.
- Beat the eggs for 2 minutes until pale and thick. Gradually beat in the sugar.
- Blend in the rest of the wet ingredients and mix well.
- Fold in the dry ingredients and mix just until completely blended.
- Turn the batter into the pan and bake for 30-35 minutes, until just beginning to turn golden and a toothpick inserted in the center comes out without wet batter clinging to it. Don’t over bake.
- Let the cake cool on a rack for 10 minutes before turning out. Flip it over so the rough edge face up. Let cool completely before dusting with sugar.
Footnotes and Sources
1. The Wall Street Journal, March 17, 2023
2. The Wall Street Journal, March 17, 2023
3. The Wall Street Journal, March 17, 2023
4. CME FedWatch Tool, March 16, 2023
5. howardcm.com, March 16, 2023
6. IRS.gov, September 26, 2022
7. Treehugger, November 8, 2022
Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.
Copyright 2023 FMG Suite.