March was a crazy month, here the potential for another banking crisis came out of nowhere, and created tremendous volatility in the markets.
Three banks failed and were taken over by the Federal Deposit Insurance Corporation (FDIC). This gave the market flashbacks to the 2008-2009 financial crisis.
The crisis was averted when the Treasury Department and the Federal Reserve implemented a program to allow banks to post government bonds they own as collateral for loans from the FED.
My analysis of these 3 banks is that they failed for very specific, idiosyncratic reasons and that the overall banking sector is sound. The Treasury/FED actions calmed the markets – at least for now.
Nevertheless, the markets swung 12% from high-to-low-to-high for stocks and 17.5% from high-to-low-to-high for bonds during March. The good news is that March finished at the high and stocks regained the 4,100 level on the S&P 500. The next hurdle stocks face is to get above 4,200, which is where they stalled out back in February.
The chart below shows that April has historically been one of the best months for stocks over the last 20 years (light blue bar) and especially in pre-election years (dark blue bar) which is what this April is. April is also corporate earnings season for the 1st quarter of 2023. I am optimistic that these 2 factors will serve as catalysts to move stocks higher.
We are watching the 4,200 level on the S&P 500 to confirm the uptrend, while watching 3,940 to hold on any pullbacks.
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April Calendar of Events (comments and additions for future months are always welcome)
- April is National Autism Awareness month. Let’s all get educated on this issue and works towards acceptance and inclusion of people dealing with autism.
April 5th Passover begins - Chag Pesach Sameach to our clients, friends and family of Jewish descent
April 9th Easter Sunday – Have a blessed and Holy Easter
April 10th Christian’s wife Maecy’s birthday
April 18th Tax Day. Remember to make those IRA or Roth contributions.
April 22nd Earth Day – let’s all recycle, turn out lights when we leave rooms, and do all we can for our environment
April 25th My daughter Satya’s birthday
Sources: Carson Investment Research, Y Charts
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