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Investing.com — Stocks tried to rally on Monday despite pressure on the bank sector following the collapse of Silicon Valley Bank, which sent fears of contagion rippling through markets.
Tech stocks were rising, while the Dow Jones Industrial Averaged flickered from positive to negative with a half-hour left in the trading session.
Federal banking regulators over the weekend announced a series of steps to shore up the banking sector after the demise of SVB and Signature Bank (NASDAQ:SBNY). Quickly rising rates last year have caught banks with losses in their securities portfolio, while SVB also had swiftly shrinking deposits. Regulators agreed to make sure depositors got back all their money from the two banks, whether or not it was insured, alleviating anxiety for the companies that were stuck without access to their cash.
Now investors are wondering what the crisis in banks means for the Federal Reserve’s next rate decision. The central bank is expected to meet next week and announce its policy decision after that. Tomorrow’s data on the consumer price index is expected to factor into its decision, but the crisis in the banking sector may also be reason for the Fed to take a less aggressive approach.
Bond yields were falling on Monday on expectations the Fed’s ultimate interest rate may not be as high as was expected even as recently as last week.
Investors will be awaiting comments about the banking sector and its affect on the decision by Fed Chair Jerome Powell, who will hold a press conference next week after the decision is announced.
Here are three things that could affect markets tomorrow:
1. CPI report
The consumer price index for February is due out at 8:30 ET (12:30 GMT). Top line CPI is expected to rise 0.4% from the prior month and 6% for the year through February. Core CPI, which strips out food and energy prices, is expected to rise 0.4% for the month and 5.5% for the year.
2. Lennar earnings
Home builder Lennar Corporation (NYSE:LEN) is expected to report earnings per share of $1.55 on revenue of $5.9 bilion.
3. Guess earnings
The apparel maker Guess? Inc (NYSE:GES) is expected to report earnings per share of $1.30 on revenue of $779 million.
