Charles Green here, Senior Market Analyst here at Traders Agency.
In case you missed last week’s email, I’m going to start sharing some of my market insights with you in a new section called Market Pulse 360.
Every time there’s something important going on in the markets I think you need to know, I’ll send you a short update distilling all the critical info into a couple short paragraphs that’ll take you less than a minute to read.
I’m confident that this will be able to replace most of the empty fluff the mainstream financial news media pumps out…
Saving you time AND making you smarter in the process.
At the end of every update, I’ll also give you a brief recommendation on what I think is the ideal strategy for succeeding in the current market.
So, go ahead and check out today’s Market Pulse 360 – and I’ll tell you a bit more about myself at the end.
Market Pulse 360 for March 13, 2023
The largest bank failure since the financial crisis in 2008–2009 happened in 48 hours from last Wednesday to Friday. Silicon Valley Bank (SVB), a regional bank for start up companies and venture capital. The FDIC closed the bank on Friday. This could have a significant impact on the markets and interest rates in the short term.
Essentially, this happened as a result of rapid increase in interest rates by the Fed, which caused bond holdings of SVB to lose much value (when interest go up, bond prices go down), reducing the ability of SVB to meet obligations and conduct business.
As I mentioned in my last update on March 10, the fear is that this bank failure could have a contagion effect, causing a run on banks and lack of confidence by depositors. First Republic Bank has already been closed and taken over by the FDIC for the same reason.
The FDIC, the Fed, and Treasury Department on Sunday issued a joint-statement that all depositors will be made whole (including amounts over $250k), because 80% of the deposits are more than 250k.
This, however, does NOT protect the equity holders of SVB. The stock has plummeted from $285 to $39 in the past few days.
This increases short-term market risk, especially the financial sector, and it could slow and stop interest rate increases with the fear of an even bigger issue than inflation.
However, this is the NOT 2008-2009 time period, and there is no systemic risk like then. Still, this does add more uncertainty and volatility into the market. But it also creates more opportunity to build positions in high-quality stocks and options.
This latest shock to markets could actually hasten a Fed pause in interest rates and/or reduce inflation faster, because regional bank lending may become constrained.
Insider Effect – SVB’s CEO sold $3.6M in shares right before the bank’s collapse. And he wasn’t the only insider to do so.
“Moral” of the story? While unethical, following the insiders is like a cheat code for defying the market trend. And Ross Givens has developed a complete system for exploiting these insiders for your own gain.
A Bit More About Me
My specialty is understanding financial markets and the drivers that influence longer-term direction. I’ve been an active trader focusing primarily on stocks for over 20 years.
- Been an adjunct finance professor for nearly 20 years
- Worked as a financial consultant with Merrill Lynch managing millions of dollars
- Earned a Master of Science Degree in International Business and Finance from Georgetown University and a Bachelor in Arts Degree in International Studies from George Mason University.
- Spent 14 years as a Marine (I enlisted at age 17) traveling all around the world
My education, work and life experience gives me a broad view of the world, financial markets, and life in general that informs my trading and investment decisions.
My passion is helping others to take advantage of the best market opportunities to achieve their financial goals.
This gives me the greatest satisfaction, and it’s the reason why I continue to teach in the classroom and outside of it today with every activity in which I engage. I believe that I succeed only if clients succeed.
I am a very unlikely success story. And this is only because I believe that anything is possible with the right knowledge, focus, and winning mentality! When you have that, success is just a matter of time.
Senior Market Analyst, Traders Agency