To The Moon

Banks borrowed $67.6 billion from the Fed using the traditional “discount window” in the week ended April 12, compared with $69.7 in the prior week.

The Fed lent banks an additional $71.8 billion from a new Bank Term Funding Program set up to prevent further bank runs and failures. That was down from $79 billion in the prior week.

Banks can use that program to get emergency loans to pay any depositors who withdraw money, rather than potentially having to sell securities to raise cash that could cause stress in markets.

Go for gold?

The declining amount of bank borrowing adds to the sense that the stress on the banking system is easing, or at least stabilizing. But experts said that there remain serious doubts about the health of the banking system going forward, with estimates of over $600 billion in debt that is underwater on their books.

Behind the scenes, the Fed is running a program to shrink its balance sheet after purchasing large amounts of assets from the market to keep long-term interest rates low during the pandemic.

Last week, the Fed’s balance-sheet assets fell $17.8 billion to $8.6 trillion.

While the emergency lending does run counter to this program, Fed officials have said they intend to continue to let maturing securities roll off its balance sheet.

What are they saying? “This confirms that the acute phase of the current banking strains continues to gradually wind down. Of course, the hits to many smaller banks from declines in net interest margins and the increased volatility from their deposit bases will be a much slower-moving process,” said Krishna Guha, vice chairman of Evercore ISI, in a note to clients.

JPMorgan, the biggest U.S. bank by assets, will be watched closely for clues on how the industry fared after the collapse of two regional lenders last month.

Analysts expect a mixed bag of conflicting trends. For instance, JPMorgan likely benefited from an influx of deposits after Silicon Valley Bank and Signature Bank experienced fatal bank runs.

Analysts will want to hear what JPMorgan CEO Jamie Dimon has to say about the economy and his expectations for how the regional banking crisis will develop. JPMorgan has played a central role in propping up a client bank, First Republic, which teetered last month, in part by leading efforts to inject it with $30 billion in deposits.

Shares of JPMorgan are down about 4% this year, outperforming the 31% decline of the KBW Bank Index.

Wells Fargo and Citigroup are scheduled to release results later Friday, while Goldman Sachs and Bank of America report Tuesday and Morgan Stanley discloses results Wednesday.

The market looks much better today after breaking out of this range above since the beginning of April. We can see another trend day higher on Friday as long SPY can defend the 412 support level.

Keep an eye on financial sector's earnings kivckingoff at premarket for JPM, C, WFC & BLK on Friday. Market reaction will have a great impact on SPY.

On the other hand, AAPL, MSFT, META will run up and break the resistance for QQQ if these 3 can lead a move higher for tech to run.

⚠️ Trading Tips: Looking at SPY calls above 413.85 towards 414.95, 415.77, 416.49. Puts can work under 412.12 towards 411.52, 410.48, 408.23. Trade levels for QQQ was posted a few hours ago. Do check them out to decide which one is more suitable for your risk appetite 😉

🚨 If you find the info useful, I'd appreciate if you could click on Like 👍, Comment 💬 & Repost 🔄 this article found at the bottom of your screen. Follow me for the latest news, trading ideas & strategies to ride the market daily with profits! 🤑

@MillionaireTiger @CaptainTiger @TigerStars @Daily_Discussion