In this latest installment of Real Time with Jordi Visser, Jordi comments on the violent and rapid moves of the last two trading days and points to the most pressing contagion areas. With Silicon Valley Bank moving from the 16th largest bank to zero in effectively two trading days, Jordi comments on the unprecedented speed by which the market dislocation has occurred. Further, he recognizes the similarly extraordinary speed by which the government has stepped in to backstop this dislocation. As a result, Jordi believes that the current range of market outcomes is wide, and forecasters should heed the pace of market developments.
- Banks, specifically regional banks, have significantly underperformed the SPX. The sector has already underperformed at a pace similar to 2009. Despite this significant sell-off, so far, the broader equity market has performed relatively well so far.
- Jordi highlights the increased risk that declining bank deposits pose. Despite the recent attention, this trend has been persistent all year. Even with the recent government response, Jordi expects bank deposits to continue their decline.
- Jordi points to credit spreads to make the point that spreads have now started to widen, increasing the probability of recession.
- Jordi points to the weaker dollar vs. Asian currencies as one positive sign that growing risks could be isolated to the US.
- Finally, Jordi highlights large positive moves in Bitcoin and Ethereum as another story different than pure deflation risk that is normally associated with bank stocks falling.
About These Videos: Our market videos seek to provide a data-focused interpretation of the market's most critical developments. Real-Time with Jordi Visser is a recurring series produced by our President and CIO based on his macro views. The purpose of his series is to isolate macroeconomic indicators ("green marbles") that are telling the true story of the market, rather than relying on the narratives or stories often portrayed as news. Jordi is a unique thinker and tends to publish these videos during market dislocations/regime shifts when he sees areas where his views differ from consensus sentiment.
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