Money In A Minute For The Week Ending March 17 | Old North State Wealth News
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Money in a Minute for the Week Ending March 17



Every Friday I recap “news you can use” from the week: a handful of quotes from major (and often expensive) news sources, so you can stay up to date on the news that affects your money without spending a dime and in less than a minute.

Here’s an overview of what happened this week.

What Signature Bank, Silicon Valley Bank failures mean for consumers and investors (March 13, CNBC) After two bank failings and dramatic moves from U.S. regulators to protect depositors, financial advisors have a message for consumers: Don’t panic.

“Every American should feel confident their deposits will be there if and when they need them,” President Joe Biden said in a Monday address to ease fears about the U.S. banking system.

SVB, Signature Bank Depositors to Get All Their Money as Fed Moves to Stem Crisis (March 13, Wall Street Journal) Regulators announced they had taken control of Signature Bank, one of the main banks for cryptocurrency companies, on Sunday. The New York bank’s depositors will be made whole, officials said.

The Fed and Treasury separately said they would use emergency-lending authorities to make more funds available to meet demands for bank withdrawals, an additional effort to prevent runs on other banks.

Individual Investors Pile Into Cash, Chasing Higher Returns (March 13, Wall Street Journal) Many individual investors are paring back their exposure to stocks and flocking to cash and other similar investments, largely because money-market funds, high-yield savings accounts, certificates of deposits and Treasury bills are all boasting interest rates around 3% to 5%. In comparison, the dividend yield on the S&P 500 is about 1.7%.

Inflation gauge increased 0.4% in February, as expected and up 6% from a year ago (March 14, CNBC) Inflation rose in February but was in line with expectations, providing a key input into whether the Federal Reserve continues to raise interest rates.

The consumer price index increased 0.4% for the month, putting the annual inflation rate at 6%, the Labor Department reported Tuesday. Both readings were exactly in line with Dow Jones estimates.

Wholesale prices post unexpected decline of 0.1% in February; retail sales fall (March 15, CNBC)

Wholesale prices posted an unexpected decline in February, providing some encouraging news on inflation as the Federal Reserve weighs its next move on interest rates.

The producer price index fell 0.1% for the month, against the Dow Jones estimate for a 0.3% increase and compared to a 0.3% gain in January, the Labor Department reported Wednesday. On a 12-month basis, the index increased 4.6%, well below the downwardly revised 5.7% level from the previous month.

Oil Falls Below $70 for the First Time Since 2021 (March 15, Barron’s) West Texas Intermediate crude futures, the U.S. benchmark, fell 5.6% to $67.31 per barrel on Wednesday afternoon. WTI hasn’t been this cheap since 2021.

There’s simply too much oil being produced and not enough demand to sop it up. Even Russia was able to increase its production in February, despite sanctions.

Jobless claims tumble to 192,000 and show no sign of rising U.S. layoffs (March 16, MarketWatch)

The number of Americans who applied for unemployment benefits last week sank to 192,000 and returned close to historic lows, suggesting that layoffs in the U.S. remain quite low despite more stress on the economy.

New U.S. applications for benefits fell by 20,000 from 212,000 in the prior week, the government said Thursday.

Every hiking cycle over the last 70 years ends in recession or a financial crisis. ‘It’s not going to be different this time,’ Morgan Stanley strategist says. (March 17, MarketWatch) Secker did note that financial crises don’t always lead to economic recessions, as evidenced in 1984, 1987, 1994 and 1998. “However, at this stage we think markets will run with the ‘guilty until proven innocent’ approach given: 1) the prospect of a material tightening in credit availability and lending standards from banks after recent events; 2) the deeply inverted yield curve going into recent events,” he said.

Bank Failures, Like Earlier Shocks, Raise Odds of Recession (March 17, Wall Street Journal) Banking-sector turmoil raises the odds that the U.S. economy, already widely seen as prone to recession, might actually tip into one.

After a week of federal interventions to stabilize the banking system and market volatility driven by investor uncertainty, the economic outlook now hangs on two factors: private- sector confidence and Federal Reserve interest-rate policies.

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Copyright © 2022 ONSWM News. Content posted on the Old North State Wealth News page was developed and produced by a third party news aggregation service. Old North State Wealth Management is not affiliated with the news aggregation service. The information presented is believed to be current. It should not be viewed as personalized investment advice. All expressions of opinion reflect the judgment of the authors on the date the articles were published. The information presented is not an offer to buy or sell, or a solicitation of any offer to buy or sell, any of the securities discussed.