Special Risk Capital Management LLC

A Rough Week March 17, 2023

March 17, 2023 –  This was a rough week . . .  pocketed with bank failures, inflation / interest rates (continue) and of course (monthly) options expiration.  All of this is contributing to market volatility.  Yes, Financials took a beating, 3 banks going under and another requiring massive infusions from 11 other big banks.  It was reported that over the past couple of weeks, there were many banks around the country lining under at the FED “Discount Window” to borrow short term money.  Lack of liquidity?  You bet.

Click On Chart to Enlarge

Adding to the whole thing was volatility in the Bond market with all sorts of theories of where interest rates were headed next.  The European Union Bank raised theirs by ½% this week.  And what will the FED do on Wednesday, March 22?  What is more important . . . fighting inflation or calming the markets?  We’ll soon know.  

Adding to the woos is that market breath is poor.  Only 10% of the stocks in most indexes are advancing.  The bottom line is big cap stocks, especially in Technology, are holding up the indexes and that’s not a sign of a healthy market.  Take a look at the Short Term Sector Strength table below and you’ll quickly see where the strength or rather lack of weakness is.

I was VERY lightly invested at the beginning of the week and even more “lightly” at the end of the week.  Again, this is a news driven market and the FED trying to balance lower inflation with avoiding a recession appears to be getting harder and harder.  Wednesday will be an interesting day.

Have a good week.          ………..  Tom  ……….

Price chart by MetaStock; table by http://www.HighGrowthStock.com. Used with permission.