Daily Price Outlook
The tech-heavy NASDAQ 100 ended the session 0.7% lower, halting a two-week advance. The two-year Treasury yield exceeded 4%. On Monday, the S&P 500 increased, with financial firms in the index climbing over 1%. Energy producers also experienced gains.
A measure of regional lenders rose about 2.5%, as First Citizens BancShares Inc. surged over 50% after agreeing to purchase SVB Financial Group's Silicon Valley Bank. First Republic Bank soared on a Bloomberg report that US authorities are considering expanding an emergency lending facility, giving the lender more time to strengthen its balance sheet.
The stock market rally attempt continues, but the indexes have been volatile, and the breadth has been narrow. The major indexes rose modestly for the week but were far off weekly highs. The Russell 2000 reached 2023 lows with bank stocks, but small caps and banks edged up for the week.
The rally attempt has relied heavily on big-cap Nasdaq stocks, such as Apple, Microsoft, Tesla, Regeneron Pharmaceuticals, MercadoLibre, and Palo Alto Networks.
REGN stock entered a buy zone late in the week due to positive drug trial news. Apple and Microsoft are just above buy points, while Palo Alto is just below an entry. MercadoLibre and Tesla stock are maintaining key support levels, not far from being actionable. All have strong relative strength lines.
However, just because individual stocks are potential buys doesn't mean investors should act on them. This market rally attempt still needs to confirm its uptrend.
First Citizens BancShares will acquire SVB Financial's Silicon Valley Bank. First Citizens, based in North Carolina, will assume all SVB deposits and purchase around $72 billion in assets at a discount of $16.5 billion, according to the FDIC. Some $90 billion in assets will remain under FDIC receivership, with an estimated cost to the deposit insurance fund of $20 billion.
FCNCA stock jumped over 35% early Monday.
The FDIC has been trying to sell Silicon Valley Bank for over two weeks. US regulators may expand an emergency lending facility for banks, aiming to help First Republic bolster its balance sheet, as reported by Bloomberg on Saturday. Authorities are considering various options and do not see First Republic as needing urgent new help.
FRC stock skyrocketed 25% in premarket trade. Several other hard-hit financials rose solidly, with modest gains for banks large and small, including Deutsche Bank.
Late Friday, the Fed reported that deposits at small domestically chartered banks fell by $120 billion in the week of March 15 but increased by $67 billion at large domestically chartered banks.
On Friday, numerous banks rebounded from 2023 lows after concerns expanded, at least temporarily, to Deutsche Bank. Even Wall Street giants like JPMorgan Chase and Morgan Stanley briefly undercut recent lows before closing better.
NASDAQ Price Chart - Source: Tradingview
NASDAQ Intraday Technical Levels
Pivot Point: 12695
NASDAQ – Technical Outlook
The NASDAQ currently exhibits a slight bullish tendency but faces resistance at the $12,700 level. Meanwhile, support appears to be firm at around $12,450. If the NASDAQ falls below the next significant support level of $11,850, it could expose the index to the next support area at $11,600.
Both the MACD and RSI indicators suggest a bearish market sentiment, as they are in the selling zone. However, if the NASDAQ manages to surpass the $12,700 level, it may potentially target the $13,000 or $13,200 levels on the upside.
Daily Price Outlook
The USD/JPY exchange rate is currently trading at $136.38, reflecting a 0.13% increase over the past 24 hours. Kazuo Ueda, a candidate for Governor of the Bank of Japan, has recently stated that monetary easing should continue to promote economic recovery. This suggests that if he is chosen to lead the central bank, there will not be a rapid shift in policy. Ueda has also expressed his commitment to "Abenomics" and support for the central bank's current stance on monetary policy.
Following Ueda's dovish remarks, BoJ Deputy Governor Ryozo Himino also expressed his support for the continuation of loose monetary policy to promote overall demand in the Japanese economy. However, he emphasized that there will come a time when it would be best to end the ultra-loose monetary policy.
These statements have put an end to rumors of a change in the Bank of Japan's monetary policy under the new administration, while still maintaining pressure on the yen relative to the dollar.
Fed rate hikes
The CB Consumer Confidence dropped from 106 in January to 102.9 in February, falling short of the expert prediction of 108.5. With traders awaiting the upcoming February business activity data on March 1st, recent statistics have shown growing inflation, prompting several FOMC members to stress the need for quick interest rate hikes to bring inflation down to the 2% objective. This has strengthened the Dollar, offsetting conflicting US data.
Currently trading at 104.85, the US Dollar Index (DXY) is rising and is expected to continue its upward momentum above 105.0. As further rate hikes are anticipated from the Federal Reserve to improve its capacity to fight high US inflation, market sentiment is rising, strengthening the pair.
USD/JPY Intraday Technical Levels
Pivot Point: 136.35
USD/JPY – Technical Outlook
The USDJPY pair experienced a temporary downward bounce after approaching the 137.00 barrier yesterday. This was due to stochastic negativity, which is now beginning to provide new positive signals. As a result, it is expected to push the price to resume the bullish wave that is moving in an organized manner inside the bullish channel on the chart. It should be noted that the next target for the pair is located at 137.70.
To support this bullish wave, the EMA50 is continuing to provide support. However, it is important to maintain a hold above the 135.40 level, as breaking below it would stop the positive scenario and lead to a test of the 133.30 areas initially.
The USD/JPY pair is currently receiving immediate support at the 135.500 level and is gaining further support near the 134.150 level. If it breaks below this level, the next support area is around 134.450, which acted as support on February 23, 2023.
On the upside, the USD/JPY currency pair's immediate resistance prevails at the $136.300 level, and a bullish breakout above this level could expose the USD/JPY price to the 136.850 level.