Benzinga – The recent positive momentum seen in the market could carry over into the new week, as indicated by the index futures, which were holding up early Monday. The week could witness more headlines about regional banks, with First Citizens Bancshares Inc.’s (NASDAQ: FCNCA) purchase of Silicon Valley Bank setting the tempo.
The economic calendar of the week is heavy, and some of the data and Fed speeches due for the week have the potential to move the market.
Cues From Past Week’s Trading:
Stocks experienced volatility in the week ended March 24, as traders digested the Fed decision, comments from Fed Chair Jay Powell at the post-meeting press conference and the continuing news flow concerning the banking crisis.
After a solid start to the week, encouraged by Credit Suisse AG‘s (NYSE: CS) bailout, the market came under significant selling pressure in the middle of the week. Secretary Janet Yellen’s comments that the Treasury was not contemplating system-wide insurance for deposits spooked the market on Wednesday.
The resilience of the market came to the fore yet again as the averages rebounded in the subsequent sessions. On Friday, they braved negative headlines concerning German financial services giant Deutsche Bank AG and closed higher, helped by a late-hours buying binge.
All three major averages ended the week higher, with the S&P 500 Index and the Nasdaq Composite clocking their second week of gains.
| Nasdaq Composite | +1.66% | 11,823.96 | |
| S&P 500 Index | +1.39% | 3,970.99 | |
| Dow Industrials | +1.18% | 32,237.53 |
Analyst Color:
More important than any economic indicators this week will be whether there is more bad news indicating that the banking crisis is far from over, according to Yardeni Research. “No news would be good news. That’s what we’re rooting for,” it added.
The firm expects consumer-related indicators to show modest improvements but did not rule out the banking crisis weighing down on consumers. The Federal Reserve’s H.8 data on bank deposits and assets will likely shed more light on how the crisis in the banking system is playing out, it added.
Futures Today
| Nasdaq 100 Futures | +0.26% | |
| S&P 500 Futures | +0.51% | |
| Dow Futures | +0.48% | |
| R2K Futures | +1.63% |
In premarket trading on Monday, the SPDR S&P 500 ETF Trust (NYSE: SPY) rose 0.51%, to $397.77, and the Invesco QQQ Trust (NASDAQ: QQQ) moved up 0.28%, to $311.75, according to Benzinga Pro data.
Upcoming Economic Data:
The Dallas Federal Reserve’s manufacturing business index for March is due at 10 a.m. EDT. In February, the index came in at a depressed-13.5.
The Treasury will auction 3-month and 6-month bills at 11:30 a.m. EDT and 2-year notes at 1 p.m. EDT.
Fed Governor Philip Jefferson is scheduled to speak at 5 p.m. EDT. He is also a member of the Federal Open Market Committee, the policy-setting arm of the Federal Reserve.
Stocks In Focus:
- First Republic Bank (NYSE: FRC) rallied over 25.5% in premarket trading following the news of the takeover of SVB by First Citizens. Incidentally, First Citizens also rose over 12%.
- Caterpillar Inc. (NYSE: CAT) shares fell over 1% following the downgrade of its shares by Baird.
- BioNTech SE (NASDAQ: BNTX) and Carnival Corporation & plc (NYSE: CCL) are among the notable companies reporting their earnings on Monday.
Top Analysts’ Call
- United Rentals Inc. (NYSE: URI): Baird downgrades from Neutral to Underperform and lowers price target from $425 to $300.
- M&T Bankcorp. (NYSE: MTB): Citi upgrades from Neutral to Buy and lowers price target from $178 to $155.
- KeyBanc Corp. (NYSE: KEY): Citi upgrades from Neutral to Buy with a $20 price target.
- Corning Inc. (NYSE: GLW): Deutsche Bank upgrades from Hold to Buy and ups price target from $35 to $38.
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures were reversing course following two straight sessions of declines. A barrel of WTI-grade crude oil fetched $69.77, up $0.74, in the early European session on Monday.
The benchmark 10-year Treasury yield was up 0.077 percentage points to 3.455%.
The major Asian markets ended Monday’s session on a mixed note, as wary traders stayed focused on the banking crisis that is playing out in the U.S. and Europe. The overwhelming mood was one of caution. Hong Kong’s Hang Seng shed 1.75%, while the Chinese, Indonesian and Taiwanese markets also chalked up notable losses.
China reported industrial profit data that showed a sharp plunge for the two-month period that ended February.
European stocks recovered from Friday’s plunge, triggered by weakness in banking stocks in the wake of a spike in the credit default swaps of Deutsche Bank.
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