Traders Market Weekly: FTX, Silvergate and SVB. A Pattern of Tech & ESG Irrational Exuberance

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    Roblox (RBLX 41.13, +1.19, +3.0%): upgraded to Buy from Hold at Jefferies

    United Airlines (UAL 52.70, +0.58, +1.1%): upgraded to Overweight from Equal Weight at Barclays


    JinkoSolar (JKS 50.00, -6.16, -11.0%): misses by $0.48, beats on revs


    Dow 31982.75 -272.02 (-0.84%)
    Nasdaq 11168.81 -169.54 (-1.50%)
    SP 500 3872.61 -45.71 (-1.17%)
    10-yr Note +61/32 3.70
    NYSE Adv 408 Dec 2498 Vol 1.1 bln
    Nasdaq Adv 825 Dec 3663 Vol 6.1 bln

    Moving the Market

    — SVB Financial Group (SIVB) being shut down as the FDIC created a Deposit Insurance National Bank of Santa Clara to protect insured depositors of Silicon Valley Bank, Santa Clara, California

    — Falling Treasury yields in a flight-to-safety trade

    — Ongoing worries about Fed rate hikes


    SVB Financial’s troubles created uncertainty about a potential contagion effect in the banking industry that fostered a strong flight to safety bid in the Treasury market. The 2-yr note yield fell 29 basis points to 4.59% and the 10-yr note yield is down 23 basis points to 3.70%.

    The SPDR S&P Banking ETF (KBE) declined 4.2% and the SPDR S&P Regional Banking ETF (KRE) fell 4.4%.


    The S&P 500 financial sector (-1.8%) was among the worst performers for the 11 sectors, but its losses were limited somewhat by gains in Dow component JPMorgan Chase (JPM 133.65, +3.31, +2.5%), which is viewed as a financial fortress that stands to benefit from the fallout at SVB Financial.

    Meanwhile, the defensive-oriented consumer staples (-0.5%) and health care (-0.7%) sectors closed with the slimmest losses.

    The CBOE Volatility Index flirted with 29.00 today before settling up 9.7% at 24.80. For the week, the CBOE Volatility Index increased 34.1%.


    Nasdaq Composite: +6.4% YTD
    S&P Midcap 400: +0.9% YTD
    Russell 2000: +0.7% YTD
    S&P 500: +0.6% YTD
    Dow Jones Industrial Average: -3.7% YTD


    Energy complex futures settled in mixed fashion.

    WTI crude oil futures rose 1.3% to $76.68/bbl and natural gas futures fell 4.5% to $2.65/mmbtu.


    February deficit widens yr/yr

    February Treasury Budget; the government posted a February deficit which came in slightly worse than expected, pressured in part by higher individual tax refunds brought on by the IRS’ work to get through its recent backlog of returns.

    The Treasury Budget for February showed a deficit of $262.4 bln versus a deficit of $216.6 bln a year ago. The Treasury Budget data is not seasonally adjusted, so the February deficit cannot be compared to the deficit of $38.8 bln for January.

    Total receipts of $262.1 bln fell 9.6% compared to last year while total outlays of $524.5 bln rose about 3.6% compared to last year.

    The total year-to-date budget deficit now stands at $722.6 bln vs $475.6 bln at this point a year ago.


    Gold futures settled $32.60 higher (+1.8%) to $1,867.20/oz as today’s developments in the SVB Financial (SIVB 106.04, halted)/regional banking sector provides a luster to the yellow metal as a safe-haven investment. Gold ended the week +0.68% higher.


    March 12-18, 2023 FEAR NOT Brave Investors Where have we been and where are we going? Join our weekly market thread on Traders Community… A dose of re
    [See the full post at: Traders Market Weekly: FTX, Silvergate and SVB. A Pattern of Tech & ESG Irrational Exuberance]

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