Friends
Where do I start? The non-farm payroll number came in hotter than expected this morning with 311,000 jobs created in February vs. the 205,000 expected. But the unemployment rate rose from 3.4% to 3.6%, and the average hourly earnings month over month increase came in smaller than expected. So, with regards to the jobs report there was enough ammunition for whatever case you wanted to make with regards to next week’s Fed decision. Enough jobs were created to likely give the Fed cover to raise rates a half of a point next week.
But there’s nothing like a rather large bank failure to change the market’s perspective. The beleaguered Silicon Valley Bank went under this morning. The bank was a big player in Silicon Valley and the first real casualty (that we know of) of the Fed’s inflation fighting monetary policies. Stocks may or may not have gone down as a result of the jobs report. Stocks did go down when a bank failure was added into the mix.
By the close, the Dow Jones Industrial Average was down 345 points to close at 31,909. The S&P 500 was down 56 points to close at 3,861. The Nasdaq Composite Index was down 199 points to close at 11,138. Gold was up $37 to trade at $1,872 per ounce, while oil was up $.72 to trade at $76.44 per barrel WTI.
The rise in short term interest rates has caused a problem for banks and specifically regional banks. Because customers can get more than 4% to 5% in money market accounts and treasury bills, deposits have been flowing out. Again, collateral damage from Fed policies. This was a bad week for the bulls. Next week we get inflation numbers and a Fed meeting. Wow. Stay tuned.
Have a nice weekend everyone
