The DC Today - Tuesday, March 14, 2023
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 14 March 2023
⏱️ 9 minutes
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Summary
Today's Post - https://bahnsen.co/3Td4dAJ
ASK DAVID “What do all these things happening with Silicon Valley Bank and the FDIC mean for small and regional banks? Are those banks going to have to pay even more in deposit rates to lure and retain banking customers?”
~ Dave
That is certainly a concern, yes – that even with FDIC protection and solvency issues addressed, the smaller banks may be forced to really punish their own margins with punitive levels of interest paid on deposits. I personally believe the next few days are critical to getting a feel for what the aftermath will mean for regional and small banks. I expect there may be a better answer for “super regionals” and a worse answer for “community/small” banks, but both customer sentiment and policy ramifications are still in the TBD phase. Moody’s did put six good-sized regional banks on review for a credit rating downgrade, citing the level of uninsured deposits and mark-to-market losses in their asset portfolios. But at this time, there has been no need for these banks to sell hold-to-maturity assets.
Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com
Transcript
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| 0:00.0 | Welcome to the DC Today, your daily market synopsis of the Dividing Cafe, brought to you every Monday through Thursday to bring you up-to-date information and perspective on financial markets. |
| 0:13.8 | Well, hello and welcome to the Tuesday edition of DC today, probably a little bit better action in markets today than has been the last several days, although I got to say today was quite an odd day. |
| 0:28.7 | The market closed up on the Dow 336 points, which was a little over 1%. The SP&P was up over 1.5%. |
| 0:38.7 | The NASDAQ was up over 2%. |
| 0:41.2 | But the thing is, is that the futures were kind of all over the place this morning, |
| 0:46.8 | mostly positive, and then they gave it up and then came back. |
| 0:51.2 | And the market opened up a bit and went up a lot. |
| 0:55.7 | And then it gave it all back. |
| 0:57.7 | And then at the very end of the day rallied higher. |
| 1:01.1 | And so I think there were two points in the day. |
| 1:05.7 | One was it about 10 o'clock Pacific, 1 o'clock Eastern, |
| 1:10.4 | where the market gave up a few hundred points. |
| 1:12.9 | And then one was really in the last 20, 25 minutes where the market brought it back. |
| 1:18.5 | And there's absolutely no explanation, no news, no trading block that I can find, no catalyst to a pretty |
| 1:27.3 | violent move down in the middle of the day and a violent |
| 1:29.4 | move up at the other day. And that's fine because that happens a lot. And I don't ever really |
| 1:33.9 | feel a great need to understand why exactly something happened in markets. I've been doing this |
| 1:37.9 | a very long time. But I will say that generally when that happens, it is indicative of exactly the kind of market |
| 1:45.7 | I think we're in right now, which is one that is not going to lend itself to a lot of |
| 1:49.1 | great explanations. |
| 1:50.1 | A lot of volatility, a lot of unwinding, a lot of irrational activity. |
| 1:56.0 | So that to me is something we have to be used to. |
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