US markets rebounded as investors keep a laser focus on the Fed’s interest rate decision, which is now just one day out. 8 out of 11 sectors in the S&P 500 finished higher, with the index locking in 1.3% of gains. 

Markets are now pricing in a 25 basis point hike by the Fed, and ASX 200 futures were up 0.9% this morning. While gold is recently traded broke through the key US$2000/oz level for the first time since March 2022, it has slightly pulled back in a sign that traders are edging back into risk on mode.

Both European banks and regional US banks have fought back in the wake of UBS’ forced takeover of Credit Suisse. First Republic was up over 29% on the back of news that US Treasury secretary Janet Yellen signalled that a government backstop for smaller banks was at the ready if required. They also recently received US$30 billion in deposits from a consortium of the biggest banks in the US in order to sure up their balance sheet.

Regional lenders PacWest Bancorp and Western Alliance were both up around 21%. UBS closed up over 12%, Credit Suisse finished +7.3% and Deutsche Bank ended the day +6.1%. Shares in the four largest banks by assets – JPMorgan Chase, Citigroup, Bank of America and Wells Fargo – were all up 3-4%.

The XJO opened higher for a second time this morning after a volatile few days of trading. With this recent market volatility this has kept the XJO volatility at extended levels where it is now at 3 months highs and an IV rank of 32. The XJO briefly closed below support at 6946 to rebound and now climb higher back towards its 200-day moving average.

We still see support at 6,946, which has shown to be an effective reversal point over the last few months. If the XJO can close above the 200-day MA then there is potential for it to continue higher and test the minor resistance level of the 50-day MA at 7,321.

One fund manager who is highly-experienced in capital markets and has a track record of performance and deal sourcing is David McNamee, Portfolio Manager of the multi-strategy funds at Altor Capital.

David will be joining us on Friday, 31st March at 12pm (AEDT) on The Insider: Meet the Fund Manager webcast, where he will provide insights on the current state of the market and outlook for 2023. He’ll also discuss his favourite stocks of the moment and reveal his strategy to identify viable investment opportunities in an uncertain market. To join us for the session, click here.

Past performance is not a reliable indicator of future performance.