Dow was off 27, advancers slightly ahead of decliners & NAZ declined 65. The MLP index stayed in the 225s & the REIT index eased up 1+ to the 374s. Junk bond funds were trading higher & Treasuries saw limited buying. Oil rose 1+ to the 82s & gold added 4 to 2023.
AMJ (Alerian MLP Index tracking fund)
Learn to trade options with MarketClub!
Inflation rises again in March, but less than expected
Homebuyer mortgage demand jumps after interest rates drop to two-month low
Warren Buffett said Americans should not be concerned about their bank deposits in the wake of the latest financial shock in the sector & the gov would ensure no depositor in this country lost a dime. “People shouldn’t be worried about losing the money and the deposits they have in an American bank, and today, they have no reason to worry,” said the Berkshire Hathaway (BRK.B) CEO. “But the message has gotten very confused and people don’t really understand how it all works.” The banking sector went thru a brief panic in Mar as depositors fled Silicon Valley Bank, which had mismanaged its bond portfolio & was overly leveraged to the tech industry. Fear grew that depositors with more than the $250K FDIC insurance limit would lose their money. But over the weekend on Mar 12, the gov backstopped all depositors in SVB, along with those in Signature Bank, no matter the amount they had with the banks. Buffett said the gov would likely step in to backstop all depositors in all US banks if that was ever necessary, though he did note that would require Congressional approval. “We’ll get the OK,” he said when asked if Congress would approve that extraordinary action. Buffett noted that Congress would also adjust the debt ceiling for this to take place in order to avoid financial ruin for the country. The banks closures have set off a crisis of confidence among investors & customers as they questioned whether other financial institutions could face the same fate. Bank stocks largely tumbled in Mar as investors grew skittish on the sector, with the selloff specifically focused on regional banks amid liquidity concerns. To restore confidence, 11 banks put $30B in deposits in First Republic Bank, whose shares have tumbled during the shock. Buffett noted that shareholders may lose out if more bank failures occur & rightly so, but depositors shouldn't be worried.
Buffett says U.S. bank deposits are safe and the government would backstop all of them if necessary
The inflation news was not a great surprise. After reviewing the report, worries about efffects of high interest rates on the economy linger. Overall, the econmy continues to stumble & recession fears have not gone away.Dow Jones Industrials
