Well it appears we escaped that financial crisis.
Credit Suisse stepped in to take over UBS.
Major banks put up 30 billion to shore up First Republic, while SVB was left to die of its own free will.
This does give the Federal Reserve one more thing to evaluate while deciding what to do about interest rates this week.
It does appear that inflation is still a problem, but at least crude prices last week dropped to $65.
It would seem to me that the Fed would raise the rate 25 basis points.
It probably would have moved up 50 basis points without the recent financial contagion.
In times of fear whole sectors get taken down.
It matters not if a company has a strong financial statement and good earnings, it is hurt by association.
It is at these times that you can get some value.
Last week I picked up some shares of Charles Schwab on a drop in the price due to concerns that they had too much short-term investments in bank contracts that trade as a mutual fund.
It proved to be a misguided view and the stock rose.
There will be a similar situation with several financials this week.
It is pointless to throw the baby out with the bathwater.
If nothing else comes out of last week, you were witness to what fear can do to equities markets.
Along with greed, these two factors have more to do with what happens in the stock market than all the technical analysis and balance sheets put together.
Now that we have seen what some might refer to as a black swan, where do we go from here?
I would point out that 3900 continues to be a support level.
I am not suggesting that one should shove all their chips on the table, but it does seem that the floor will not drop out from under you.
If that was ever going to happen, last week was a perfect opportunity.
If you are looking for a safe harbor, I think you should give a good long look at the likes of a JP Morgan or Morgan Stanley.
In the high-tech sector, you can throw a dart at the FANG stocks and feel safe. This is not value investing, but for some they just can’t sit on their hands.
It is spring and hope is in the air.
