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Things to know this week


March has long been expected to be a pivotal month for the Federal Reserve.

And after the first two weeks of the month brought the central bank title value of the yearnext week, what investors are looking forward to is the main event finally coming.

On Wednesday, the Fed will announce its latest monetary policy decision at 2 p.m. ET, Fed Chairman Jerome Powell will follow up with a press conference at 2:30 p.m. ET. ET. Along with its policy decision, the Fed will also release updated forecasts for inflation, unemployment, economic growth, and interest rates for this year and beyond.

After Powell testify before the Senate Banking Committee on March 7 that the Fed is likely to raise rates “higher than previously anticipated” in response to persistent inflation, investors are sure The Fed will increase its target range for its benchmark interest rate by 0.50% on March 22.

Two days later, one nascent banking crisis cast a shadow over the Fed’s plans. By Sunday night, March 12, the Fed was part of the plan government-led deposit support throughout the US financial system. Investors are currently roughly divided on whether the Fed will raise rates on Wednesday.

“We still expect the Fed to raise its policy rate by 25 basis points next week but also convey a less harsh anti-inflation message than was thought a few weeks ago to assuage market anxiety. “, wrote Bob Schwartz, senior economist at Oxford Economics. in a note to customers on Friday.

Schwartz added: “While banking problems will certainly attract attention, we believe that it is not a systemic problem but a liquidity problem that the Fed can address by means of additional measures. its lending facility. “The future wildcard will be the reaction in financial markets, as maintaining financial stability is one of the Fed’s mandates.”

File - Federal Reserve Chairman Jerome Powell speaks during a news conference on Wednesday, December 14, 2022, at the Federal Reserve Board Building, in Washington.  As the main regulator of Silicon Valley Bank, the Federal Reserve is under fierce criticism from financial watchdogs and banking experts.  (AP Photo/Jacquelyn Martin, File)

File – Federal Reserve Chairman Jerome Powell speaks during a news conference on Wednesday, December 14, 2022, at the Federal Reserve Board Building, in Washington. As the main regulator of Silicon Valley Bank, the Federal Reserve is under fierce criticism from financial watchdogs and banking experts. (AP Photo/Jacquelyn Martin, File)

Last week, government officials, regulators and private sector leaders in the banking world sought to stabilize the US financial system in the wake of the financial crisis. the rapid collapse of Silicon Valley Bank And forfeiture of the Signature Bank.

The important development of the week took place on Thursday afternoon when a A consortium of 11 US banking giants announced they will transfer about 30 billion dollars in deposits to the First Republic (FRC), which investors and regulators fear will be the next institution to fail.

Even with last week’s capital injection, shares of First Republic have lost more than 70%; On Friday alone, the stock fell about 33%.

Amidst the flood of news from the banking sector, Major US stock indexes end mixed weekwith Nasdaq Composite (^IXIC) rose more than 4%, the S&P 500 (^GSPC) rose 1.4% and the Dow Jones Industrial Average (^DJI) modest hole mining.

However, financial stocks have been hit hard with the KBW Bank Index (^KBX) fell more than 14% for the week, while the KBW Regional Banks Index (^KRX) lost a little more than 9%. Since the beginning of March, these indexes have lost 27% and 17% respectively.

Over the weekend, American investors kept an eye on Europe, where The latest report from the Financial Times suggests UBS (UBS) is approaching a deal to acquire Credit Suisse (CS) in a $1 billion deal that would value Credit Suisse at about $0.27 a share. Credit Suisse stock trading in New York closed Friday’s session at $2.01.

While developments from the Federal Reserve and the global banking world will remain at the forefront of investors’ minds, several economic and earnings reports will draw attention throughout the year. week.

Existing home sales data updated weekly on Tuesday and Wednesday mornings on mortgage applications will provide readings on the housing sector, which is already a surprise beneficiary of the banking crisis caused by the collapse of Treasury rates and lead to a decrease in mortgage interest rates.

Investors will also keep a close eye on manufacturing and services data from S&P Global on Thursday morning.

In terms of earnings, the results from Foot Locker (FL) on Monday, Nike (NKE) on Tuesday, Darden Restaurant (DRI) on Thursday will provide an update on the status of US consumers.

economic calendar

Monday: There are no notable datasets to release.

Tuesday: Existing home sales, February

Wednesday: MBA mortgage application form; Federal Reserve monetary policy decision

Thursday: Initial unemployment claim; New home sales, February; Kansas City Fed Manufacturing Index

Friday: Durable goods orders, February; S&P flash US composite PMI

Earnings Calendar

Monday: Foot locker (FL), Pinduoduo (PDD)

Tuesday: Nike (NKE), GameStop (GME), Tencent Music (TME), AAR Corporation (AIR)

Wednesday: Ollie’s Bargain Shop (OLLI), tough (CHWY), Petco (WOW), Winnebago (WGO), steel case (East Sea), Worthington Industry (JOB), KB homepage (KBH)

Thursday: General factory (geographic information system), Darden Restaurant (DRI), stress (ACN), Dataset (FDS)

Friday: No notable companies are expected to report.

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