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Investing Hot Sheet

Mar 27, 2023 | Investing Hotsheet

The Hot List

1. Banking System

Global banking system worries persist as the price of Deutsche Bank’s credit default swaps jumped. Investors are wondering if Germany’s largest lender could be the next Credit Suisse.

2. Federal Reserve

The FOMC raised rates by 25 basis points as expected. Chairman Powell said that they considered a “pause” with the current banking crisis.

3. Inflation

The Fed’s preferred inflation gauge – the personal consumption expenditures price index (PCE) – will be released on Friday.

4. Geopolitics

China’s President Xi said he signed an agreement with Putin bringing their relationship into a “new era” of cooperation.

5. Employment

The U.S. labor market remains strong with weekly jobless claims remaining below 200K for the ninth straight week.


Last Week

Monday: S&P 500 +34.93 (+0.89%) to 3951.57. No major headlines.

Tuesday: S&P 500 +51.30 (+1.30%) to 4002.87. February existing home sales 4.58M (vs 4.16M expected).

Wednesday: S&P 500 -65.90 (-1.65%) to 3936.97. FOMC raised rates 25 bps.

Thursday: S&P 500 +11.75 (+0.30%) to 3948.72. Weekly jobless claims 191K (vs 204K expected). February new homes sales 640K (vs 650K expected).

Friday: S&P 500 +22.27 (+0.56%) to 3970.99. February durable goods orders -1.0% (vs +1.6% expected).

S&P 500 [S&P] Technical Look

Potential Support: To the downside, look for support at the critical 3900 level. If it drops below that, there should be support near the yearly lows of 3800.

Potential Resistance: To the upside, look for resistance at 4000. If it breaks above that, look for further resistance at 4100.

Bright Ideas


Big Tech


Corporate Bonds


Dividend Yield

My Take

Banking system issues remain front and center after the Deutsche Bank’s cost against default spiked. Investors are on edge and looking for any weakness in the global banking system after Credit Suisse and SVB. If Germany’s largest lender were to fail, it would send shockwaves throughout Europe and the entire world. However, it appears this isn’t another Credit Suisse and simply just a victim of panic.

With all the banking drama, the highly anticipated FOMC decision didn’t pack its usual punch. They raised rates by 25 bps as expected, while Powell said they considered a pause. He also stated that the credit tightening in the banking system meant monetary policy has less work to do. As businesses have a harder time borrowing, it will slow spending – such as hiring – which will hinder growth.

While this does increase the odds of a recession, longer duration assets – like growth stocks – start to look more attractive for the first time since the Fed hikes began. Remember higher rates led to lower P/E multiples –premiums paid to cash flows – so a case could be made that lower rates could cause them to rise again.

But before we get too optimistic on stocks again, inflation – enemy number one – will be back in focus with PCE on Friday. This number will ultimately determine the Fed’s course of action. If there are any signs of cooling, then I’d expect the Fed’s attention to shift even harder toward the banking issues – signaling an end of rate hikes. However, if it goes the other way, the Fed will be in an even more difficult spot then they already are.

Continue to use the charts for clues where stocks may go next. The bounce off 3800 leading into this latest rally shouldn’t be ignored. Combine that with the fact that March has had some memorable bottoms and this current situation is very interesting. But with this market, there are really no precedents to go off so be prepared for all outcomes.

If you need help or would like me to build your Investing Gameplan™, DreamWork’s proprietary investment management system, contact me today.

Until next time,


Chief Financial Strategist


Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.