Market Wrap – New bank rescue

Markets remained in a mixed mood, following a report from CNBC that said that First Republic pitched a plan and the US government failed to offer any backstop like they did with other failed banks.

First Republic offered a deal where the government would pay above market value for bonds that First Republic holds so the bank could raise money. The company’s shares are still down heavily today.

Microsoft and Boeing stock prices were higher on Wall Street this afternoon, shares of Google are marginally lower after their earnings release after the bell yesterday.

In terms of market moves the US dollar is falling sharply as banks fail to see backstops, and the safe havens of choice appear to be gold and major currencies and Bitcoin.

This afternoon the US release data showing that New orders for US manufactured durable goods rose by 3.2 percent from a month earlier in March 2023, recovering from a revised 1.2 percent decline in February and easily beating market expectations of a 0.7 percent growth.

Demand for transportation equipment led the increase after two consecutive monthly falls, boosted by orders for both civilian and defense aircraft. On the other hand, demand for vehicles was down by 0.1 percent.

Meanwhile, demand was up for computers and electronic products and electrical equipment, appliances, and components, but was little changed for machinery, fabricated metal products, and primary metals.

Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, were down 0.4 percent in March, following a 0.7 percent drop the month before.

Also, the US trade deficit in goods narrowed to USD 84.6 billion in March of 2023 from the upwardly revised USD 92 billion in the previous month, compared to market expectations of a USD 89 billion gap.

Exports grew by 2.9% from the previous month to USD 172.7 billion, supported by strong external demand for industrial supplies (6.4% to USD 64.8 billion), consumer goods (2% to USD 22.4 billion), and automotive vehicles (4.3% to USD 14.4 billion).

On the other hand, imports contracted by 1% to USD 275.3 billion, pressured by lower purchases of capital goods (-2.9% to 71.4 billion) and industrial supplies (-2.7% to 57.7 billion).