Fed and other central banks set joint liquidity operation ( Reuters).Morgan Stanley's Wilson says bank stress signals bear market end ( Bloomberg).Big money captivated by banking drama as investors brace for more turmoil ( Reuters).Recent tightening of financial conditions estimated to be worth 150 bp of rate hikes as banks continue to tighten lending standards.Bullish talking points for the market include market pricing in 100 bp of rate cuts through to year end, Fed balance sheet now expanding, banking turmoil not systemic, US Q1 GDP estimates moving higher and corporate cost cutting.Bearish talking points for the market include Fed won’t pivot given inflation pressures, BTFP not a form of QE, pickup in hard landing concerns and strategists still see consensus earnings forecasts as 10-20% too high.Oil prices bounce 2% after falling 13.6% in the previous five sessions.US 2-year Treasury yield whipsawed from session lows of 3.64% to 3.98%. ![]()
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