Bank Stability Questions Rattle Markets
March 17, 2023
A drop in a key US freight volume index for February point to lower trucking activities and a weaker economic outlook, a Tudor Pickering, and Holt & Co. analyst said Wednesday, adding that the slowdown also has implication for refiners with relatively higher distillate yields. The Case Freight Shipment Index eased 0.3% to 1,167 points in February.
US Treasury Secretary Janet Yellen told the US congress that the US banking system was on sound footing. But we continue to hear about money loan to Credit Suisse to firm up their balance sheet. Reports that JPMorgan and Morgan Stanley are loaning $25 billion to First Republic Bank to help it stabilize. This has made some traders nervous, and traders pull their money back on a risk off situation. Charles Schwab saw $8 billion in net outflows from its prime money market funds this week.
The global recession outlook has been fresh news helping to push energy prices lower. The Silicon Valley Bank news and the rumbling that continue around the banking sector have also helped push prices lower as traders worry about further fall out. But both OPEC and the International Energy Agency in monthly report this week have raised their forecast for stronger oil demand in 2023. A big part of that increase demand is a rebound in Asia.
Energy prices have bounce and we will have to see if they can maintain their gains into the weekend. The market might be able to set itself up to trade in a range and buy time waiting to see if another shoe drops.