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Weekly Market Recap

March 17, 2023

The equity and fixed income markets started and ended the week in a volatile state, but the S&P 500 did gain over 1%. To start, federal regulators moved to protect all the deposits (above the typical $250,000 FDIC limit) at Silicon Valley Bank and Signature Bank, after each experienced a liquidity crunch. This raised concerns over a larger “contagion effect” across the entire financial sector, especially in regional banks. This caused investors to flock into U.S. government bonds as a flight-to-safety, which increased the prices and caused the yield on 2-year Treasuries to experience its largest three-day drop (to 3.75%) since 1987. Given the recent volatility, many traders are now expecting the Fed to be less aggressive in raising interest rates overall and estimate an increase of only 0.25% (if any) in its meeting next week, compared to last week’s expectations of a 0.50% hike. Oil declined again this week and remains below $70/bbl, its lowest level since November of 2021. In more optimistic economic news, both the CPI and PPI indicated a further decline in the inflation rate during February, and housing starts and building permits both came in better-than-expected. Additionally, initial jobless claims came in on a positive note at 192,000, down from the previous week and below the 205,000 consensus. Next week, we look forward to information regarding the Federal Reserve’s interest rate decision and press conference, existing and new home sales, initial/continuing jobless claims, and U.S. services/manufacturing PMI. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.

Emily M. Cozad
Portfolio Manager & Research Analyst
Investment Funds Specialist

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