Weekly Market Vibes

March 13, 2023

Market Recap

WEEK  OF MAR. 6 THROUGH MAR. 10, 2023 

The S&P 500 index fell 4.5% last week as a larger-than-expected  rise in February jobs added to rate worries while investors also were spooked  by the collapse of SVB Financial Group's (SIVB)  Silicon Valley Bank.

The market benchmark ended Friday's session at 3,861.59, down  from last week's closing level of 4,045.64. The index is still in positive  territory for 2023, but barely -- its year-to-date gain has slimmed to just  0.6%.

The index began the week's slide on Tuesday after Federal  Reserve Chair Jerome Powell said most-recent economic data are stronger than  originally forecast, suggesting interest rates will rise beyond what was  anticipated.

"If the totality of the data were to indicate that faster  tightening is warranted, we would be prepared to increase the pace of rate  hikes," he said.

The comments added to the market's nerves ahead of Friday's  release of February jobs data. Investors have been worried that a  stronger-than-expected labor market could prompt the Federal Open Market  Committee to raise interest rates more aggressively to tamp down inflation.

The February jobs numbers indeed came in stronger than  expected.

Nonfarm  payrolls rose by 311,000 last month, the US Labor Department  said, well above the 225,000 jobs increase expected in a survey compiled by  Bloomberg. Private payrolls rose by 265,000 in February, surpassing the  increase of 215,000 private jobs expected. The unemployment rate ticked up to 3.6% in February from 3.4% in January, but  that came as the participation  rate rose and the size of the labor force expanded.

The market also was rattled on Friday by the collapse of  Silicon Valley Bank, which represents the second-largest bank failure in US  history. The California Department of Financial Protection & Innovation  said it closed the SVB unit and appointed the Federal Deposit Insurance Corp.  as receiver.

All of the S&P 500's sectors fell last week, led by the financial sector  that slid 8.5% amid the collapse of Silicon Valley Bank.

Materials dropped 7.6%, real  estate was down 7%, consumer  discretionary lost 5.6% and energy lost 5.3%.

Shares of SVB Financial Group plunged 63% last week. The  company's Silicon Valley Bank unit was closed Friday by the Calitornia  Department of Financial Protection and Innovation and the US Federal Deposit  Insurance Corp. was named receiver. All insured deposits were transferred to  a new entity created by the FDIC called the Deposit Insurance National Bank  of Santa Clara. Insured depositors will have access to their insured funds no  later that Monday, the FDIC said.

Also in the financial sector, shares of First Republic Bank (FRC) fell 34% as the company said its underwritten public  offering of 2.5 million common shares priced for expected gross proceeds of  about $350 million. This implies a per-share price of $140, which represents  a discount to the stock's last reported closing price prior to the pricing.  The number of shares also marked an increase from 2 million shares the bank  previously said it planned to sell.

Among the decliners in the materials sector, shares of  International Flavors & Fragrances (IFF) shed 9.7%.  Berenberg Bank lowered its price target on the company's stock to $103 each  from $127 while keeping its investment rating on the shares at hold.

Next week's economic data will feature key inflation readings,  with the February consumer price index set to be released on Tuesday and the February producer price indexexpected on Wednesday. Other data anticipated next week  include February retail  saleson Wednesday, February housing starts and building  permits on Thursday, and March consumer sentiment on Friday.

Provided by MT Newswires



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