S&P 500 futures are up 70 points, or 1.8%, currently as equities look to be heading towards a strong bounce after the Friday drop. Nasdaq futures are up 2.0% while Dow futures are also seen up 1.3% at the moment as investors look to put the SVB fears behind them. In case you missed it, here are the steps taken by lawmakers and policymakers to address the situation:
- FDIC and the Fed introduce a systemic risk exception for SVB (and also Signature Bank), which means all depositors of said institution(s) will be made whole
- The Fed creates a new funding facility i.e. Bank Term Funding Program (BTFP) which allows banks to lend against Treasuries, agency debt at par for up to one year
- The Fed reduces haircuts on collateral offered at its discount window - the same margins apply for the BTFP - so that allows for more lendable value for banks via the window
As risk trades are ripping, the dollar is the main laggard in the major currencies space and I'll dive into the charts for that later. But looking towards US trading in the day ahead, the S&P 500 looks poised for a bounce back towards its 100 (red line) and 200-day (blue line) moving averages after the break below those key levels last week:
That will be the next key level to watch in terms of the technicals for equities as the week gets underway.
