March 27, 2023

Markets:

Stock futures rose slightly Monday, putting Wall Street on track to build on last week’s gains.

Regional banks rose broadly, with the SPDR S&P Regional Banking ETF (KRE) climbing more than 3.8% in the premarket. First Republic was the best-performing stock in the fund, surging more than 28.9%. PacWest also gained more than 11%.

Meanwhile, Bloomberg reported that U.S. authorities were considering expanding an emergency lending program for banks, which could give First Republic more time to shore up its liquidity. First Republic ended last week down 46.3% as investors contemplated if the plan from a group of banks to deposit $30 billion would be enough to bolster its balance sheet.

First Citizens Bank also agreed to buy large parts of Silicon Valley Bank, the U.S. Federal Deposit Insurance Corporation said overnight. The deal includes the purchase of approximately $72 billion of SVB assets at a discount of $16.5 billion, but around $90 billion in securities and other assets will remain “in receivership for disposition by the FDIC.”

European stocks rose in early trade, and were up 1% by 8:30 a.m. London time with all sectors in the green.

Banks climbed 1.7% to lead gains amid cautious optimism around the sector as construction stocks climbed by 1.1% and insurance by 1.14%.

Portfolio:

We enter the new trading week holding set-ups in PLTR and TSLL.  We will be looking to new trades this week so please be ready.  As we stated last week, do not get caught up in the day to day move and especailly the move after the Fed.  It takes a session or two to see price materalize and now look where we are technically.  This market continues to build, the hated rally continues to gain steam.  Should we trade above 4100 and hold it, then 4200 is next tier.  Cross that and hold, monster rally takes place into end of year and into 2024 elections we believe.  Only way our opinion changes from here should we have an event and break below 3890 on the S&P and hold it!  This market has been a technical traders sand box!  No reason to fight the trend.  Be ready today.