To The Moon

16/3 (Thu) was a 🎢wild night🎢 for the 🇺🇸 market so let’s break it down🕵🏻❣️

(1) 🔎Initial Jobless Claims ➡️ The number of Americans filing for unemployment benefits fell by 20,000 from the previous week to 192,000 on the week ending 11/3, well below expectations of 205,000.

‼️ It was the biggest fall since July mostly impacted by the drop in claims in New York, where school workers returned to work after a school break.

‼️ The result pointed to further evidence of a stubbornly tight labor market, in line with the hot payroll figures for Feb ➡️ The tight job market forces employers to raise wages to attract and keep staff, magnifying inflationary pressure on the American economy.

⭐️ The four-week moving average, which removes week-to-week volatility, fell by 750 to 196,500.

(2) European Central Bank pressed forward with a 50bps hike despite recent turmoil in financial markets😨😨😨

⚠️⚠️⚠️ I think points (1) & (2) combined is a clear signal that the Fed will likely continue with the rate hike but perhaps with a 25bps increase given that the 🏦 crisis is more severe in 🇺🇸 than in Europe.

‼️ Prior to all of the bank failures, some traders actually thought the Fed might do a 50bps hike at its March meeting.

‼️ The CME Group's FedWatch Tool suggests that investors are currently split on how they think the Fed will act at its next meeting. As of 16/3, about 33% of traders thought the Fed would leave its key benchmark lending rate unchanged & inside a range of 4.5% to 4.75%. But nearly 67% of traders are expecting a 25bps hike (Note: Keep in mind this data is constantly changing).

(3) Credit Suisse (CS) shot up 19.2% intra-day after tumbling 24% to a fresh record low of $1.75 on 15/3 after the Swiss National Bank (SNB) intervened decisively.

❗️However, it closed exactly at $2.16, which is the same as 15/3, & only inched 1.39% higher during post-market ➡️ This means that investors are Not 🐂-ish for CS’s recovery & it’s just another ⛽️pump & dump🗑

(4) First Republic Bank (FRC) crashed to an intra-session low of $19.80 on 👎📰 of a potential sale or a fresh capital raise & 🚀🚀🚀 to a high of $40 on 👍📰 of a rescue package🚑🚑🚑

⭐️ In an unusual rescue orchestrated by JPMorgan Chase & Co (JPM) Chief Executive Jamie Dimon along with Treasury Secretary Janet Yellen & Powell, 11 Wall Street firms said they were depositing $30 billion into FRC.

🥳🥳🥳 JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C) & Wells Fargo (WFC) will kick in $5 billion of uninsured deposits each, while Goldman Sachs & Morgan Stanley will deposit $2.5 billion each. Bank of New York Mellon (BK), PNC Financial (PNC), State Street (STT), Truist (TFC) & U.S. Bancorp (USB) are each making an uninsured deposit of $1 billion.

⚠️ The package is similar to that of past financial crises when leaders of the biggest 🏦🏦🏦 would join forces to quell the problems. The big one was the Panic of 1907,” when J.P. Morgan’s intervention helped end the turmoil.

⚠️⚠️ However, investors' relief was short-lived. FRC’s shares, which had closed 9.98% higher at $32.28 after a volatile day that saw trading halted 17 times, slumped in after-market trading by 16.98% to $28.45🥵🔥🥵 The reversal came after FRC said in a filing that it was suspending its dividend.

⚠️⚠️⚠️ The filing also said that FRC had a cash position of about $34 billion, excluding the $30 billion in new deposits & that it had borrowed up to $109 billion from the Fed between 10/3 & 15/3, & an additional $10 billion from the Federal Home Loan Bank on 9/3 ➡️ This means that FRC had already used up $119B-$34B = $85B of the 💸💸💸 it loaned from the Fed🤔🤨🧐

(5) 🇺🇸 stocks rose on 🗞🗞🗞 of 2 lifelines to 🚑CS & FRC🚑 eased fears of a global banking crisis🛟🌎🏦🏦🏦🌎🛟

🥳 DJIA rose 1.17%, to close at 32,246.55 points

🥳🥳 S&P 500 gained 1.76% to close at 3,960.28 points

🥳🥳🥳 Nasdaq gained 2.48% to close at 11,717.28 points

🥳🥳🥳🥳 Popular Tech & Chip stocks ALL gained 0.6%-7.72% as investors rotated out of 🏦 stocks on 🤖-hype brought about by GPT-4 & MSFT. MSFT previewed a new AI "Copilot" for Microsoft 365, its product suite that includes Word documents, Excel spreadsheets, PowerPoint presentations and Outlook emails. First open to some 20 enterprises for testing, 🤖 will offer a draft in these applications, speeding up content creation and freeing up workers' time, MSFT said.

🤔Is The 🏦 Crisis Over Yet❓

My quick answer is not yet & the next 1-2 weeks will give us confirmation on whether the 🏦 crisis is over & here’s why. Let’s analyse the a quickly executed poll by Reuters & Ipsos of 1,004 🇺🇸 consumers on 14-15 March provides a bit of insight on how Americans are feeling about the chaos in the banking system, the government’s response, & if they feel their deposits are in danger.

(1) Only about half of the respondents to the poll said they’ve heard At Least a Fair Amount about Silicon Valley Bank's implosion😧 What will happen when all hear fully about it❓Wouldn’t it cause a 2nd-🌊🌊 of panicky depositors withdrawing 💰💵❓

(2) 68% said they had At Least a Fair Amount of confidence in the stability of their own bank, & the same % had at least that level of confidence in banks more generally, so that means 32% of Americans created the panic withdrawals😅 Any 👎📰 is likely to waver the 68% & chaos will set in again💥💥💥

Fellow 🐯🐯🐯 do you think the 🏦 Crisis is over yet❓Share your thoughts with me in the comments section❣️Do follow me if you enjoy reading analytical stock research🔍 presented in a fun & easily understandable way & for more 🤖Stock Price Predictions🔮

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