Martes 21/03/23 ventas de casas existentes

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A month of turmoil

Markets have been whipsawed in the last month, first by a hawkish-sounding Fed and then by fears of contagion in the banking system.

Fed officials begin their two-day meeting Tuesday. The event kicks off just two weeks after Powell warned a congressional committee that the Fed may have to hike rates even more than expected because of its battle with inflation.

Those comments sent interest rates soaring. A few days later, the sudden collapse of Silicon Valley Bank stunned markets, sending bond yields dramatically lower. Bond yields move opposite price. Expectations for Fed rate hikes also moved dramatically: What was expected to be a half-point hike two weeks ago is now up for debate at a quarter point or even zero.


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U.S. 2 Year Treasury
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4.181%
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Yield | 2:43 PM EDT

The 2-year Treasury yield is most sensitive to Fed policy.
Markets were calmer Monday and Tuesday with stocks rising and Treasury yields edging higher. The action comes after UBS’ weekend agreement to buy Credit Suisse for $3.25 billion soothed some nerves about the global banking system.

But worries remain about U.S. regional bank First Republic, which received deposits of $30 billion from a consortium of banks last week. CNBC’s David Faber reported that JPMorgan is working to help the bank find alternatives, such as a capital raise or sale.

First Republic stock fell 47% on Monday but rose Tuesday with other regional banks after Treasury Secretary Janet Yellen said the government could backstop deposits at other institutions if necessary.

Messaging is the key

Gapen expects Powell to explain that the Fed is fighting inflation through its rate hikes but then also assure markets that the central bank can use other tools to preserve financial stability.

“Things going forward will be done on a meeting-by-meeting basis. It will be data dependent,” Gapen said. “We’ll have to see how the economy evolves. ... We’ll have to see how financial markets behave, how the economy responds.”

The Fed is scheduled to release its rate decision along with its new economic projections at 2 p.m. ET Wednesday. Powell will speak at 2:30 p.m. ET.

The issue is they can change their forecast up to Tuesday, but how does anyone know?
Diane Swonk
CHIEF ECONOMIST AT KPMG
Gapen expects the Fed’s forecasts could show it expects a higher terminal rate, or end point for rate hikes, than it did in December. He said it could rise to about a level of 5.4% for 2023, from an earlier projection of 5.1%.

Jimmy Chang, chief investment officer at Rockefeller Global Family Office, said he expects the Fed to raise interest rates by a quarter point to instill confidence, but then signal it is finished with rate hikes.

“I wouldn’t be surprised if we get a rally because historically whenever the Fed stops hiking, going to that pause mode, the initial knee-jerk reaction from the stock market is a rally,” he said.

He said the Fed will not likely say it is going to pause, but its messaging could be interpreted that way.

“Now, at the minimum, they want to maintain this air of stability or of confidence,” Chang said. “I don’t think they’ll do anything that could potentially roil the market. ... Depending on their [projections], I think the market will think this is the final hike.”

Fed guidance could be up in the air

Diane Swonk, chief economist at KPMG, said she expects the Fed is likely to pause its rate hiking because of economic uncertainty, and the fact that the contraction in bank lending will be equivalent to a tightening of Fed policy.

She also does not expect any guidance on future hikes for now, and Powell could stress the Fed is watching developments and the economic data.

“I don’t think he can commit. I think he has to keep all options on the table and say we’ll do whatever is necessary to promote price stability and financial stability,” Swonk said. “We do have some sticky inflation. There are signs the economy is weakening.”

Fed needs to 'call a timeout' and stop hiking rates, says Bleakley's Peter BoockvarWATCH NOW
VIDEO11:18
Fed needs to ‘call a timeout’ and stop hiking rates, says Bleakley’s Peter Boockvar
She also expects it will be difficult for the Fed to present its quarterly economic forecasts, because the problems facing the banks have created so much uncertainty. As it did during the Covid pandemic in March 2020, the Fed might temporarily suspend projections, Swonk said.

“I think it’s an important thing to take into account that this is shifting the forecast in unknown ways. You don’t want to overpromise one way or the other,” she said. Swonk also expects the Fed to withhold its so-called dot plot, the chart on which it shows anonymous forecasts from Fed officials on the path for interest rates.

“The issue is they can change their forecast up to Tuesday, but how does anyone know? You want the Fed to look unified. You don’t want dissent,” said Swonk. “Literally, these dot plots could be changing by the day. Two weeks ago, we had a Fed chairman ready to go 50 basis points.”

The impact of tighter financial conditions

The tightening of financial conditions alone could have the clout of a 1.5 percentage point hike in rates by the Fed, and that could result in the central bank cutting rates later this year, depending on the economy, Swonk said. The futures market is currently forecasting much more aggressive rate cutting than economists are, with a full percentage point — or four quarter-point cuts — for this year alone.

“If they hike and say they will pause, the market might actually be okay with that. If they do nothing, maybe the market gets nervous that after two weeks of uncertainty the Fed’s backing off their inflation fight,” said Peter Boockvar, chief investment officer at Bleakley Financial Group. “Either way we still have a bumpy road ahead of us.”

The Fed could also make a surprise move by stopping the runoff of securities from its balance sheet. As Treasurys and mortgages mature, the Fed no longer replaces them as it did during and after the pandemic to provide liquidity to financial markets. Gapen said changing the balance sheet runoff would be unexpected. During January and February, he said about $160 billion rolled off the balance sheet.

But the balance sheet recently increased again.

“The balance sheet went up by about $300 billion, but I think the good news there is most of that went to institutions that are already known,” he said.

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LAST CHG %CHG
DJIA 32560.60 316.02 0.98
S&P 500 4002.87 51.30 1.30
Nasdaq Composite 11860.11 184.57 1.58
Japan: Nikkei 225 26945.67 -388.12 -1.42
UK: FTSE 100 7536.22 132.37 1.79
Crude Oil Futures 69.50 1.86 2.75
Gold Futures 1943.60 -39.20 -1.98
Yen 132.50 1.18 0.90
Euro 1.0770

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Las acciones cierran al alza el martes, el S&P 500 añade más del 1 % a medida que los bancos regionales aparecen: Actualizaciones en vivo

Hakyung Kim

Yun Li

Las acciones subieron el martes a medida que los comerciantes se volvieron optimistas sobre las perspectivas del sector financiero después de las garantías de la secretaria del Tesoro Janet Yellen para protegerse contra nuevas crisis bancarias. Wall Street marcó su segundo día de ganancias antes del anuncio de la Reserva Federal sobre las tasas de interés el miércoles.

El promedio industrial Dow Jones ganó 316,02 puntos, o 0,98 %, para cerrar en 32 560,60. Mientras tanto, el S&P 500 saltó un 1,30 % para terminar el día en 4.002,87, su primer cierre por encima del umbral de 4.000 desde el 6 de marzo. El Nasdaq Composite añadió un 1,58% para cerrar en 11.860,11 respectivamente.

CNBC

Los bancos regionales aumentaron el martes, liderados por la Primera República. El banco derrotado saltó casi un 30 %, un día después de perder un 47 %. El SPDR Regional Banking ETF (KRE) ganó alrededor del 6 %. Los regionales recibieron un impulso después de que la secretaria del Tesoro, Janet Yellen, dijera el martes por la mañana que el gobierno está listo para proporcionar más garantías de depósitos si la crisis bancaria empeora.

Wall Street está mirando hacia el anuncio de la Reserva Federal sobre su rumbo de la política monetaria el miércoles por la tarde. Los inversores ahora esperan un ritmo más lento de endurecimiento de la Reserva Federal a la luz de la crisis bancaria. Actualmente, los comerciantes tienen un 86 % de probabilidades de un aumento de la tasa de un cuarto de punto cuando la Reserva Federal concluya su reunión de política de dos días el miércoles, según la herramienta FedWatch de CME Group. La probabilidad de una pausa es del 13,6 %.

"Si [la Reserva Federal] detuara sus aumentos de tasas, eso sería lo mismo que reconocer que saben algo que tal vez los mercados no saben. Creo que sería una idea devastadora para ellos", dijo Johan Grahn, jefe de estrategia de ETF en Allianz Investment Management. "Nunca fue realmente un argumento para que retrocedieran de los 25 [puntos de base]".

Añadió que la volatilidad del mercado después de la quiebra del Banco Silicon Valley y el colapso de Credit Suisse fue una "reacción instintiva muy natural para que los inversores se dirigiera a la seguridad de inmediato".

"Parece que el proceso de evaluación se ha estabilizado un poco, así que podemos seguir adelante y decir que estos fueron incidentes relativamente aislados. Ahora, por supuesto, esta es solo la primera grieta", dijo Grahn. "Estamos en este período de mayor volatilidad, y creo que es fácil olvidar cuánta volatilidad tenemos tanto en el lado del capital como en el de la renta fija".