Silicon Valley Bank Fail
A short time ago Jamie Dimon, the CEO of JPMorgan Chase, reported the message that a “financial hurricane was possible.” He was quickly reprimanded in the press for fear mongering.
This past week Silicon Valley Bank, a large California banking enterprise with a national footprint (16th largest in the country), announced they’re closing down. Silicon’s book of business recorded 97% uninsured deposits. Washington D.C. organized an all-encompassing approach to protect deposits.
The root of the problem stems from regulators, Congress and the Federal Reserve jacking up rates too quickly to counter rapid inflation. This confluence caused an abrupt rise in interest rates and contributed to the run on SVB.
The marketplace will adjust to this altercation. Future rates (disseminated on March 21) by the Fed will likely be lowered to 25 basis points and could very well be their last hike. This Fed meeting may signal that the end of the inflation battle is finally here. The hawkish Fed tone has concluded.
Past Market Commentary
February 2023 Review – Looking Ahead
March 6, 2023 February 2023 Review – Looking Ahead February reversed the optimism that prevailed in January’s market results. The economy was still resilient with retail sales +3%, despite an increase in inflation. The consumer evidenced ample savings and a willingness to spend. Another market shift witnessed more money movement towards U.S. Treasuries and out
January 2023 Review – Looking Ahead
Market Commentary February 6, 2023 January 2023 Review – Looking Ahead What a difference a year makes. Last year stocks were down 20% for the year after starting the year near market all-time highs. This January the market moved higher but with a fear of a major downturn in 2023 earnings. The DOW finished
2022 Review – 2023 Look Ahead
Market Commentary January 5, 2023 2022 Review – 2023 Look Ahead December wrapped up 2022 without a “Santa Claus” rally, posting negative returns for the month and year. In short, 2022 was a hostile investment year. Projected results for 2023 are still being debated. The Federal Reserve continues to fight inflation but appears to be