Friends
Last weekend, government officials “implied” that deposits in U. S. banks, whatever amount, will be backed by the government. This weekend in the soap opera that is the banking industry we saw the shotgun wedding of Swiss giants UBS and Credit Suisse. In the meantime, First Republic Bank seems to be circling the drain while the government and other large banks continue to try to find a “solution” for the ailing bank. All of these tremors in the banking industry just as the Fed begins its 2-day FOMC meeting tomorrow. Bond yields did move up a bit which took a little of the pressure off of stocks and a nice beginning of the week rally ensued.
For the day, the Dow Jones Industrial Average was up 382 points to close at 32,244. The S&P 500 was up 34 points to finish the day at 3,951. The Nasdaq Composite Index was up 45 points to close at 11,675. Gold was up $11 to trade at $1,984 per ounce, while oil was up $.83 to trade at $67.57 per barrel WTI.
If you want to look at the brightside where history might be on the bull’s side, take a look at the pattern in the last two major bear markets. In 2002 stocks bottomed in October and then tested that bottom again in March of 2003. After that, stocks basically moved higher for 5 years. Then in October of 2008, stocks once again in a bear market established a low that was again tested, and this time violated the following March in 2009. But another low was put in and stocks moved higher basically for the next 12 years. Last October we put a low in that is at least being considered once again here in the following March. The potential similarities are at least interesting. But as we have said for more than a year, this bear market was going to take time to play out and it still feels like there’s more wood to chop before we could declare any bullish victories. This is going to be a very busy week so stayed tuned.
Have a nice evening everyone.
