Powell Hikes & Banks are still on Shaky Footing

Author

Faro Capital
March 24, 2023

Good Morning,

U.S. stocks finished positive yesterday. The FED raised rates by 25 basis points and signaled another hike this year. Most of the markets was expecting no rate hikes and some calling for rate cuts due to the banking crunch going on in the country. Chairman Jerome Powell challenged that notion saying that rate cuts shouldn’t be expected this year. Secretary Janet Yellen signaled the actions that backstop Silicon Valley bank & Signature bank can be used to help the financial sector if needed. The biggest decliners were bank stock like First Republic and Comerica.

Canada index closed a little lower due to the losses in the banking, energy, and mining sectors. Eyes were on the Federal Reserve rate actions this week which rocked the rest of the equity markets. Bombardier raised its 2025 targets due to future positive expectations. 

Brazil’s equity index Ibovespa ended near eight-month lows. Brazil’s Copom kept the Selic rate at 13.75% as expected by the market. The Compom meeting also announced that it will not hesitate to act and tighten if needed. Biggest losers of yesterday were Magazine Luiza & GOL. 

Markets: Before the Open

Earnings

Top News Stories

Canada

  • Shake Shack to break into the Canadian market in 2024 (BNN)

  • Diavik Diamond Mine in the Northwest Territories spilled 450M litres of waste water because of a broken pipline (BNN)

  • Engine Capital LP requested Calgary based Parkland Corp. to sell or spin off its Burnaby refinery (BNN)

  • Budget Arline Lynx Air announced two summer routes between Toronto & Kelowna and Hamilton & Vancouver (BNN)

  • Utah based Crumbl Cookies is planning to enter Canada with its first store opening in Edmonton on March 21 (BNN)

  • Thoma Bravo’s $1.8B takeover of Waterloo, Ont. based Magnet Forensics is a go after Magnet’s shareholders approved it (BNN)

  • Job vacancies in Quebec dropped 12% in Q4 (MG)Bombardier raises financial goals for 2025 (MG)

U.S.

  • Walmart to lay off hundreds of employees at e-commerce facilities across the country (CNBC)

  • Ford’s EV business lost $2B in 2022 but they have a plan for profitability in under 4 years (CNBC)

  • Short seller Hindenburg research released a report on alleged fraud by Block, shares dropped close to 15% (CNBC)

  • Accenture to cut 19K jobs (WSJ)

  • FTX to sell back stake in Crypto startup Mysten for $95M (WSJ)

  • The creator of TerraUSD coin Do Kown has been arrested in Montenegro for fraud (WSJ)

  • Trucking company Knight-Swift to buy Xpress, deal is valued at $808M (WSJ)

  • Character.AI, a 16 month startup chatbot, is no valued at $1B (WSJ)

  • U.S. strategic oil inventory will take years to recover, head of department of energy says (RT)

  • FTX reached a deal to recover more than $400M in cash from hedge fund Modulo Capital (RT)

Argentina

  • Argentina’s government ordered public sector agencies to sell or exchange their holdings of dollar bonds to reorganize their debt (RT)

  • Argentina’s economy grew 5.2% in 2022 (BAT)

  • According to Argentina’s INV the country’s 2023 harvest of wine grapes will not exceed 15.4M tons, 40% less than normal levels (BAT)

Bolivia

  • President Acre is pushing for joint lithium policy with other countries in Latin America (RT)

Brazil

  • Because of higher unexpected tax revenue Brazil lowered forecasts of its budget deficit (RT)

  • Lula angers oil companies with the creation of an oil export tax (RIO)

Colombia

  • IMF says Colombia’s economy is transitioning on a sustainable path to growth (RT)

  • Colombia’s private pension funds association said President Petro’s pension reform would negatively affect capital markets (RT)

  • Colombia ranks 10th in countries with most crypto currency transactions and 2nd place in Latin America (PORT)

  • Colombian airlines Ultra Air stopped selling tickets due to economic woes (ELT)

  • Colombian government approves merger between Avianca and Viva Air (RT)

Costa Rica

  • The World bank approved a $160M loan to Costa Rica for natural disasters (RT)

Chile

  • Chile has the highest current account deficit in core LATAM economies (RIO)

  • Chilean exporters are big winners with the removal of zero covid in China, exports of products like salmon & copper are rising (DF)

El Salvador

  • President Nayib Bukele next week he will present a bill to eliminate all taxes on tech (RT)

Peru

  • BBVA research predicts the Peruvian economy will grow 1.9% this year (EC)

  • The Congo is close to taking Peru’s place as the second largest copper exporter in the world (EC)

Mexico

  • Vulcan Materials said Mexican security forces illegally took over its port terminal in south Mexico (RT)

  • Pemex and Taos create a plan to develop Campo Zama (ELE)

Venezuela

  • Maduro appointed Pedro Rafael Tellechea as the new oil minister (RT)

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DISCLAIMER: The writing above is not financial advice or solicitation to buy/trade any financial product/security. This newsletter is for educational purposes only. Any action/decision made by any reader is done by their own accord. Financial markets are full of risk so please be careful.