March 21, 2023
Market Performance (YTD)
Source: YCharts
Disclaimer: Past performance is no guarantee of future performance
The US 2Y treasury posted a 3-SIGMA MOVE, EACH DAY, SEVERAL TIMES IN A ROW.
Statistical odds: Once every 50+ million years. This week's volatility predates most dinosaurs (assuming they traded treasuries). And that's not an exaggeration.
Math by @DRBCurtis pic.twitter.com/P5oZ9U3AbO
— David Ingles (@DavidInglesTV) March 17, 2023
Bond volatility has completely disconnected from equity vol –DB pic.twitter.com/I09LQPJinT
— Gunjan Banerji (@GunjanJS) March 19, 2023
The last time we saw this amount of implied volatility in US Treasury yields was in December 2008. pic.twitter.com/kT2zFsy1ez
— Lisa Abramowicz (@lisaabramowicz1) March 16, 2023
It's a big American bank lovefest and they're all holding hands and supporting each other! Awww https://t.co/VJYV9I488r
— Silvia Killingsworth (@silviakillings) March 16, 2023
Did quantitative tightening just end? The Fed’s balance sheet grew by about $300 billion in the past week as the U.S. sought to backstop deposits at regional banks. pic.twitter.com/rDYuLzqmTm
— Lisa Abramowicz (@lisaabramowicz1) March 16, 2023
Banks: We're in good shape
Also banks: pic.twitter.com/i7I0ALjhUb
— David Ingles (@DavidInglesTV) March 17, 2023
Most of the net increase in emergency lending from the Fed last week was out west. A further breakdown.
Of the net $297 billion increase in reserve bank assets, $233 billion comes from the SF district, and $55 billion is from the NY district
1/ https://t.co/a8HsPMK4Lm https://t.co/ghkabnzyay pic.twitter.com/yCZBtMnCn7
— Nick Timiraos (@NickTimiraos) March 17, 2023
* Midsize US Banks Ask FDIC to Insure All Deposits for Two Years
(via @business) @JohnSpall247 $KRE pic.twitter.com/UGmxtnjHxi
— Carl Quintanilla (@carlquintanilla) March 18, 2023
Going: One 167 year old giant of global banking — with a market cap of $10bn, $14bn of annual revenues, a $575bn balance sheet and $1.4 trillion of assets under management — for the price of a half Shake Shack, one Nikola or a middling EPL football club. https://t.co/R82vMwkx2S
— Robin Wigglesworth (@RobinWigg) March 19, 2023
First Republic's credit rating was just downgraded by S&P. Again. (To B+ from BB+). "“We do not view this deposit infusion… as a longer-term solution to the bank’s funding issues… Attracting meaningful deposits will be difficult, constraining the bank’s business position.”
— Kailey Leinz (@kaileyleinz) March 19, 2023
OOPS! Global CenBanks to enhance liquidity via USD-Swap line. Fed & five other CenBanks (ECB, SNB, BoJ, BoE, BoC) announced coordinated action on Sun to boost liquidity in their standing US dollar swap arrangements. pic.twitter.com/3ikdSQ7Lvr
— Holger Zschaepitz (@Schuldensuehner) March 19, 2023
EXCLUSIVE: US officials are studying ways to let the FDIC temporarily insure deposits beyond the current $250,000 cap on most accounts, without having to get approval from a deeply divided Congress https://t.co/KkdXok3vV4 pic.twitter.com/x6rpbFPcy7
— Bloomberg (@business) March 21, 2023
And just like that, Bloomberg's Financial Conditions Index went from loose (green) to the tightest since Mar 2020. Gives the Fed an excuse to pause if it wants to… pic.twitter.com/HW6DR9XCPe
— Liz Young (@LizYoungStrat) March 20, 2023
Bank underwriters across the US and Europe are pulling leveraged-finance sales and pausing future deals amid tepid demand. “The primary loan market feels like a Scooby Doo ghost town — recently deserted and a bit haunted.” https://t.co/Jex7ghvFVf
— Lisa Abramowicz (@lisaabramowicz1) March 21, 2023
US Corporate bond spreads have risen quickly since March 1st. While they are near levels that signaled tradeable lows in stocks last year, let’s wait for them to stabilize before sounding the “all clear”.$LQD $HYG pic.twitter.com/nMvA2pAH5O
— DataTrek Research (@DataTrekMB) March 20, 2023
@mckonomy calling out a good point this morning:
Atlanta Fed GDPNow yesterday revised up to 3.2% for 1Q23.
Arguably there is some “backward looking”-ness of this given recent banking woes, but even these will take time to impact the real economy.https://t.co/m7nx5EL9s9 pic.twitter.com/fhDcbhiGld— Cameron Dawson (@CameronDawson) March 16, 2023
U.S. leading economic indicators fell to -6.46% YoY in Feb. Usually these need to bottom before a new #economic/market cycle starts.
Based on regional #ISMs, confidence readings, inverted yield curve, tighter credit conditions. Still not there yet. @FactSet @Conferenceboard pic.twitter.com/KRZCwaj9w2
— Matthew Miskin, CFA (@matthew_miskin) March 17, 2023
ECB raises rates by 50 bps:
"Inflation is projected to remain too high for too long…The Governing Council is monitoring current market tensions closely and stands ready to respond as necessary…The new ECB staff macroeconomic projections were finalised in early March before… https://t.co/6sngw0VA6U pic.twitter.com/pec0dgXeqd
— The Transcript (@TheTranscript_) March 16, 2023
Significant repricing in front end ECB today.
25bp added to peak policy rates (depo at 3.4%) with the May meeting no longer being priced for a 50/50 of a 25bp rate hike, but 80% probability of a 25bp rate hike. pic.twitter.com/UqnJY4Spok
— Piet Haines Christiansen (@pietphc) March 21, 2023
JPMORGAN: “In recent months, close to 70% of [commercial real estate] loans were held at smaller banks .. we think it will be important to monitor related activity moving forward. Will CRE lending .. be curtailed significantly or will it shift from smaller banks to larger banks?” pic.twitter.com/3xGXFwLKJZ
— Carl Quintanilla (@carlquintanilla) March 16, 2023
The result is that these funds which had been seen as negatively correlated darlings over the last year have given up nearly all their returns over the last 12m. pic.twitter.com/QajvoxJwFN
— Bob Elliott (@BobEUnlimited) March 20, 2023
This is quite the one-two punch–interest rate shock to confidence in banks was not the monetary transmission channel we were focused on
ht @davidgura pic.twitter.com/OBWdro0eL6— Julia Coronado (@jc_econ) March 17, 2023
Real estate exposure front and center for regional banks. pic.twitter.com/WkrWu4gMm5
— Rick Palacios Jr. (@RickPalaciosJr) March 17, 2023
What a reversal! It took just 10 days. Following Silicon Valley Bank's collapse, markets have completely reversed their expectations on where the Fed will take interest rates. What are your thoughts?#interestrates #economy #markets #bankcollapse pic.twitter.com/shQcNLZGIo
— James Eagle (@JamesEagle17) March 20, 2023
Disclosure
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