The question people are asking right now is this: What happened to turn sentiment?
That's the wrong question. Markets are rallying because what didn't happen.
Like everyone, we were watching US regional banks get battered yesterday and wondering: Which one will be the next to fall? With shares prices of some down +80% in a few days, it's far to assume there was something of a run on deposits.
So far, no more have failed. Given that, you can start to assume that they won't fail and that deposit outflows aren't as bad as markets feared. Or that the Fed's new program has shored up liquidity enough for them to survive.
If the bank run is over, then it's over. It's safe to assume there will be less deposit outflows than yesterday and that calm isn't far away. There are still some big questions about the credit impulse from banks, regulation and Fed policy stemming from the drop but right now the only trade is bank solvency and they look like they've weathered the storm.
Here are the pre-market moves from some of the most-beaten-up US regional banks.
The degens did it.
