One Percent Move Report for March 21, 2023
Introduction:
Read more here: https://www.morganstanley.com/content/ ... -20230321(Morgan Stanley)
What Happened in the Markets?
• The S&P 500 Index rose 1.3% Tuesday to 4,003.16. With the gains, the index is now up 4.3% year to date.
• Eight of the 11 S&P 500 sectors rose on the day, as Energy (+3.4%) and Consumer Discretionary (+2.7%) outperformed while Real Estate (-0.6%) and Utilities lagged (-2.0%).
• Stocks bounced for the second straight day this week. The move higher comes after last week's volatility, where pressures mounted for some regional banks within the US banking system. However, remarks by the US Treasury Secretary Janet Yellen in addition to measures and protections put in place by the FDIC, the Federal Reserve, the Swiss central bank, and a consortium of large banks helped rebuild confidence in recent days.
• The uncertainty that still remains could potentially lead to more volatility in financial markets. In particular, tomorrow's FOMC meeting has investors debating whether the Fed will hike rates or choose to pause entirely. Currently, the odds of a 25 basis point (bp) rate hike are 80%, down from 100% on March 10th. MS & Co.'s US Economics team forecasts the Fed will deliver a 25bp rate hike at each of the March and May meetings, to a peak rate of 5.125%. The team then expects the Fed to pause until the Fed cuts rates 25bp in March 2024.