The View from 5th Avenue

The View from 5th Avenue – 28 March 2023

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There are a few axioms in this business that can at least help contribute to a long and fruitful career. One is, don’t go out on a Monday night. Sure it may sound great in theory (it doesn’t) but it sets a pretty arduous tone for the rest of the week. (I’ll give you one guess as to what I was up to last night.) Another one is don’t fight the Fed. And yet the market seems to be fixing for a showdown as it remains steadfast in its belief rate cuts are coming as soon as June. The only issue is Pow…

The View from 5th Avenue

The View from 5th Avenue – 27 March 2023

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A relatively quiet Monday in US trading after a relatively positive weekend led markets to float relatively higher despite fading into the close. It started with First Citizens (FCNCA +53.7%) striking a deal to absorb SVB loans + deposits at a 23% discount out of the FDIC receivership, which now puts them in the top 15 lenders in the US with a $200b in assets… Then adding FRC (up as much as +36% in premkt trading, eventually closing +11.8%) was boosted higher on reports that US authorities may…

The View from 5th Avenue

The View from 5th Avenue – 24 March 2023

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We have reached the end of what was a very bumpy week in the markets. Today turned out to be no different. It started off with futures slightly up and traders preparing for what seemed to be a normal Friday only to have a potential European banking crisis scare markets and send them down 100 bps at the open. Concerns over Deutsche Bank (Germanys largest lender) grew as CDS contracts on the corporation surged, likely due to overall concern with the industry. German Chancellor Olaf Scholz reitera…

The View from 5th Avenue

The View from 5th Avenue – 23 March 2023

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One wouldn’t think going from Fed chairperson to head of the Treasury would be that big a leap but Ms. Yellen seems to have forgotten the importance of parsing one’s words. (Her and Jerome have each other’s mobile #’s no?) Some confusing commentary seemed to derail the market’s move higher yesterday, although key resistance on futures not holding did contribute to the fail. Today’s initial jump lent new meaning to the axiom that the first move is the wrong one, but it was far from the only one…

The View from 5th Avenue

The View from 5th Avenue – 22 March 2023

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There was only one show in town today, and initially markets had a hard time deciding whether it was a hit or a flop. Indices vacillated between positive and negative territory, and then decided on “flop” and sold off aggressively into the close. Powell and Co clearly had a lot to digest in the past few weeks (to say the least) and today’s announcement was key, not just for gauging the path of interest rates, but for shedding light on how The Fed is thinking about the biggest banking crisis sin…

The View from 5th Avenue

The View from 5th Avenue – 21 March 2023

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Drumroll please! Headlines overnight of potentially more support for deposits via the Treasury spurred a re-risking in the US markets. Traders had swarmed to the safety of Treasuries the last week and a half to hide from the regional bank fallout. This pushed yields to ytd lows, while also propping the quality companies higher (think mega-tech). Those quality names maintained their gains today however, pushing the S&P Growth factor to yet another daily outperformance versus Value (13 days in a…

The View from 5th Avenue

The View from 5th Avenue – 20 March 2023

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To hold or not to hold… THAT is the question! Fed week is now upon us, and the landscape has changed dramatically from where we stood just 2 weeks ago. The echoes of higher for longer are a faint and distant memory now as the banking system braces to stabilize itself and the broader economy with it. Monday trading served as a day of (needed) reprieve after many were hard at work over the weekend to find a suitable(ish?) mate for CS, though FRC (-47%) still getting hit after another credit do…

The View from 5th Avenue

The View from 5th Avenue – 17 March 2023

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As humans, we may have a natural bias/conditioning to want to end things on a good note.. And while today was not exactly that, we are going to attempt to keep things positive and point out the fact that on the week we ended up over +1.43%, so… not that bad! And while St Patrick’s Day is known for its celebration of green, March 17, 2023 equity markets did not quite get the memo as they fell decidedly lower into the red and instead passed the shamrock over to the safer FICC counterparts. Gold…

The View from 5th Avenue

The View from 5th Avenue – 16 March 2023

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Don’t call it a bailout! They are simply expressing their confidence in the country’s banking system. At least that’s how America’s largest banks are attempting to swing the news that they are depositing a total of 30 billion uninsured USD into First Republic Bank. US averages started the day off a little shaky as the Swiss National Bank made a 50 billion credit line available to Credit Suisse to help support the bank and calm financial markets. News hit in the late morning that JP Morgan and M…

The View from 5th Avenue

The View from 5th Avenue – 15 March 2023

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The financial mess that has been encircling the US went international today with fresh concerns over Credit Suisse. With the Stoxx Banks index closing down 6.9% (and Credit Suisse -24%/ CS ADR +18.5% vs local close though), the early part of the US session was impacted negatively, culminating just after the EU close. The rush to safety continues evidenced by the sovereigns, as 10-yr Bunds moved from 2.45% to 2.12% intraday. And the US 10-yr had a similar trajectory, closing at 3.47% vs yesterda…