The stock market rally attempt is facing a clear divergence as the Nasdaq continues to surge, led by tech giants like Microsoft and Nvidia, while other indexes are being dragged down by bank and commodity stocks. As the Federal Reserve meeting looms, the banking industry is already shaping up to be a big winner, with First Republic, Credit Suisse, and other major banks offering a lifeline to struggling institutions. However, FRC stock and several other banks sold off again, causing concern among regulators and investors. The article goes on to discuss banking headlines and rate hike outlooks, urging caution in a volatile market.
Important Details about Market Rally Divided: First Republic Bank Dives After Hours In Latest Twist; Fed Meeting On Tap –
– Dow Jones futures, S&P 500 futures, and Nasdaq futures will open on Sunday evening amid a divided market rally.
– The Federal Reserve meeting looms, but it’s already shaping up to be a big week for First Republic, Credit Suisse, and the banking industry.
– The Nasdaq is leading the market rally with Microsoft, Meta Platforms, Nvidia, and Advanced Micro Devices.
– The S&P 500 rose modestly but couldn’t hold key support, while the Dow Jones edged lower and the Russell 2000 tumbled.
– Banks are still in focus as industry giants and regulators scramble to contain the crisis.
– This weekend may be significant for bank headlines, as First Republic is looking to raise cash and UBS is in talks to buy all or some of Credit Suisse.
– The Fed’s Tuesday-Wednesday policy meeting will try to balance current banking issues with fighting inflation.
– Chip stocks remain clear market leaders, with several flashing buy signals.
– The stock market rally had a wild week, with both gains and losses across various sectors and ETFs.
– The current banking crisis has upended the possibility of a half-point rate hike on March 22, with markets leaning towards a modest rate hike.
– The rate hike outlook will be crucial for a renewed market rally, and the Federal Reserve will update economic and rate hike projections on Wednesday.
Dow Jones futures, along with S&P 500 and Nasdaq futures, are set to open on Sunday evening amidst a divided market rally. The Nasdaq has been led by companies like Microsoft, Meta Platforms, Nvidia, and Advanced Micro Devices, surging above its 50-day and 200-day lines. However, other indexes have been weighed down by bank and commodity stocks, with the S&P 500 rising modestly but failing to hold key support on Friday. The banking industry remains in focus with industry giants and regulators working to contain the crisis.
Thursday saw the stock market rally with big banks like JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup offering a lifeline to First Republic, while the Swiss National Bank supported Credit Suisse. However, FRC stock and many other banks sold off again, with JPM stock hitting a fresh 2023 low. This could be a big weekend for bank headlines, as financial regulators typically use Saturday and Sunday to finalize rescues. First Republic is reportedly looking to raise cash via a private stock sale, while UBS is in talks to buy all or part of Credit Suisse. Additionally, the Federal Reserve’s meeting on Tuesday and Wednesday will try to balance the current banking woes with fighting inflation. The market rally attempt amidst a possible banking crisis is volatile and investors should remain cautious.
Chip stocks continue to lead the pack, with companies like ON Semiconductor, Aehr Test Systems, Mobileye, Applied Materials, GlobalFoundries, Monolithic Power Systems, and STMicroelectronic near potential buy points or early entries. All have relative strength lines at or near highs. Meanwhile, Tesla continues to consolidate, holding support and facing resistance at several key levels.
ETFs saw mixed results last week, with growth ETFs like Innovator IBD 50 ETF and iShares Expanded Tech-Software Sector ETF jumping, while SPDR S&P Metals & Mining ETF, Global X U.S. Infrastructure Development ETF, and U.S. Global Jets ETF plummeted.
The current bank crisis, triggered by rapid Fed rate hikes over the past year, has upended hawkish bets for a half-point rate hike on March 22. Currently, markets see a 60% chance of a quarter-point rate hike at the end of the Fed meeting on Wednesday. Investors are betting on a pause in May, with multiple rate cuts expected after that. However, all of this is subject to change as Fed policymakers haven’t fully committed to a decision yet.
In conclusion, the market rally attempt amidst a possible banking crisis is volatile and investors should remain cautious. Chip stocks continue to lead, while ETFs saw mixed results last week. The current bank crisis has led to uncertainty regarding the Fed’s rate hike projections, with markets currently leaning towards a quarter-point hike. Investors will be closely watching the Fed’s update on economic and rate hike projections at the meeting on Tuesday and Wednesday.