Daily market review

The market continued its strong performance today, following a positive finish for the S&P 500 yesterday. The main indices remained in positive territory throughout the session, with banking stocks leading the way. The S&P 500 has now recovered all the ground lost since March 8th, when the SVB Financial blowup hit the scene. This positive action in the banking sector was driven by a Bloomberg report that the Treasury Department is looking at ways to guarantee all bank deposits if necessary. First Republic Bank, which suffered steep losses, traded up today on reports that it is pursuing strategic alternatives, including a possible sale. The S&P 500 closed just above 4,000 in anticipation of tomorrow's FOMC decision. Investors are anxious to hear whether the Fed will raise rates or pause, and what Fed Chair Powell says to explain any decision that is made. Contrarian buying interest was seen after the BofA Global Fund Manager Survey showed investor sentiment is close to levels of pessimism seen at lows of the past 20 years. The Treasury market saw some unwinding of the safety trade, with the 2-year note yield rising 26 basis points to 4.18% and the 10-year note yield rising 13 basis points to 3.61%.

In terms of economic data, existing home sales surged in February, with a month-over-month increase for the first time in 13 months. However, total sales were down 22.6% from a year ago, and the median selling price declined for the first time in 11 years, highlighting the affordability challenges presented by rising mortgage rates and potential buyers' concerns about purchasing at a cyclical top in the housing market. Looking ahead, market participants can expect to receive data on the weekly MBA Mortgage Index, weekly crude oil inventories, and the March FOMC Rate Decision.