The S&P 500 had a great week, hanging out above its 50-day moving average and breaking through the 4,100 mark by Friday. We saw the significant indices playing it cool early on in the week, though, as folks like us kept an eye on the developments in the banking world, including that two-day Congressional hearing about the SIVB bank fiasco.

The good news came when we learned that First Citizens Bancshares (FCNCA) would be scooping up some of Silicon Valley Bank’s assets.

Bloomberg reported authorities might expand the emergency lending facility for banks, giving First Republic Bank (FRC) some extra time to beef up its balance sheet.

However, bank stocks still felt the heat, especially after FDIC Chairman Michael Barr mentioned that more regulation and higher capital and liquidity standards are likely for big firms.

Despite all that, the S&P 500 financial sector managed to rise 3.7% this week, although it took a 6.1% dip in Q1. A chunk of this week’s gains came from the semiconductor scene, with the PHLX Semiconductor Index jumping 3.5% for the week and a whopping 27.6% for the quarter.

Investors were initially excited about Micron’s (MU) earnings, but they backed off on Friday due to rumors of Chinese regulators poking around MU products for cybersecurity reasons.

To wrap it up, all 11 S&P 500 sectors saw gains this week! Energy (+6.2%), consumer discretionary (+5.6%), and real estate (+5.2%) were the big winners, while communication services (+1.5%) and health care (+1.8%) still managed to make modest gains. Cheers to a solid week in the market!

LAST WEEK’S ECONOMIC REPORTS

The Commerce Department shared that the U.S. trade deficit in goods increased by 0.6% to $91.6 billion in February. Our exports were worth more than the decline in imports, and they even revised January’s figure down from $91.5B. This trade gap is the largest we’ve seen since October 2022.

Now, onto some real estate news! The National Association of Realtors (NAR) reported that the Pending Home Sales Index climbed 0.8% in February to 83.2, marking the third month in a row of growth. This index tracks home sale contracts in the U.S. that have yet to be finalized, and an index of 100 represents the average contract activity back in 2001. (Rising interest rates must not be slowing down real estate as much as we thought.)

Friday’s rally got an extra boost when we got our hands on some not-too-shabby inflation data. The PCE Price Index slowed to 5.0% year-over-year in February from 5.3% in January, and the core-PCE Price Index (the Fed’s favorite) dipped to 4.6% from 4.7%. Sure, the slowdown is slower than we’d like, but at least we’re heading in the right direction.

CALENDAR & MOVERS

• Monday: ISM Manufacturing PMI (March)
• Tuesday: Trump Charges
• Friday: Unemployment Rate (March)

Keep your eyes peeled for the March employment stats in the U.S. coming out on Friday. But before that, we’ll get a look at the ISM manufacturing index on Monday and the services index on Thursday.

Oh, and don’t forget about those public holidays sprinkled in between. China’s markets will take a break on Wednesday, April 4. As for the major European markets, they’ll be closed for Easter on Friday, April 7, and so will our buddies in London and New York. So, brace yourself for an exciting week with a mix of market updates and holidays!

The Arrest of President Trump?
Let’s talk about a recent development involving former President Donald Trump. A New York grand jury decided to indict him on unspecified criminal charges, making this the first time a former U.S. president has faced such charges. Trump’s lawyers confirmed the news.

The grand jury had been looking into hush money payments made to two women who claimed to have had affairs with Trump. We only got wind of these payments after he was elected in 2016, and more info came out during his time in the White House.

Late Thursday, the Manhattan District Attorney’s office confirmed that Trump’s lawyers had been informed. According to Trump’s attorney, Joe Tacopina, Trump is expected to be in New York by Tuesday for his arraignment.

While some media outlets worry about potential riots related to Trump’s arrest, it’s unlikely to happen or impact the markets. However, it’s still sad for the country, as many see this indictment as purely politically motivated, and it raises serious questions about the state of justice in America.

EARNINGS

Monday, April 3: SAIC, DGLY
Tuesday, April 4: MSM, DLO, SGH, LNN
Wednesday, April 5: CAG, SMPL, SDR
Thursday, April 6: STZ, LW, LEVI

DIVIDEND SPOTLIGHT

EMCOR (NYSE: EME) is expected to increase its payout.

BONDS

As the week wrapped up, the latest inflation numbers revealed that we must still tackle the issue. The U.S. PCE Core index for February came in at +4.60%, which is a fair distance from the Fed’s 2% target. Over in the Eurozone, inflation (CPI this time) dropped from 8.5% in February to +6.9% in March. However, when you exclude volatile items (like energy, alcohol, tobacco, and food), prices rose by +5.7%, giving the ECB room to keep raising rates. As a result, U.S. and German 10-year yields climbed above their key supports at 3.35% and 1.99% during the week.

COMMODITIES

OIL & ENERGY

Oil prices enjoyed an uptick this week, with Brent crude rising 5% and WTI increasing 7%, although they leveled out on Friday. The boost came after Turkey halted oil imports from Iraq’s autonomous Kurdistan region following an international court ruling on their long-standing dispute.

After nearing $80, Brent crude oil took a breather. The week saw less volatility, mainly due to investor confidence making a comeback and reviving the appetite for risky assets. Now, all eyes are on the Opec+ meeting happening on Monday.

PRECIOUS METALS & GOLD

Gold prices experienced a slight bump as investors sought safer assets amidst the banking crisis. Spot gold increased 0.1% to $1,981.59 an ounce, while futures followed suit, hitting $1,982.00. Will gold keep rising? It’s still being determined, as increasing interest rates make this zero-yield asset less appealing, even with its safe-haven status during economic turbulence.

CRYPTOCURRENCY

Bitcoin climbed 1.5% this week and now hovers near its 2023 highs at around $28,500 as of this writing. The leading digital asset benefits from the return of risk appetite in the markets and maintains a significant positive correlation with the Nasdaq. Despite recent U.S. regulatory crackdowns on the crypto industry, particularly targeting Binance, bitcoin remains resilient. For now, the U.S. economic situation is the primary driver for the crypto asset market.