Repeat

If we look at it from a global macro perspective, last April was no different from the previous month.

As the end of April approached, fears of the global banking crisis again gripped the world. Many people who have not heard of First Republic Bank before, now know a lot about the bank. 

It's clear that things are not going well for the FRB. But if we are worried about a banking crisis that will affect the whole world, we should monitor deposit outflows from small and medium-sized banks. Deposit outflows are not at a level to be feared for now.

Deposits at all U.S. commercial banks dropped in the second week of April, though at smaller banks deposits held steady in a sign of stabilization in the financial institutions hardest hit by deposit outflows after last month's failure of two large regional banks.

In the first quarter, most U.S. bank balance sheet came in as expected or better than expected. We can conclude that the problem does not affect the general sector. To make a more precise judgment, we need to see the second-quarter balance sheets.

For now, our opinion is that it is better to see the events as a "problem" rather than a "crisis". But no one can guarantee that this problem will not cause a crisis.

Another major recurring debate is whether the U.S. based global recession will begin, and if it does, its severity.

As UMvest, we base our short- and medium-term strategy on the recession in the USA.

In March, the unemployment rate in the country was announced as 3.5 percent. In March, average hourly earnings in the country increased by 0.3 percent compared to the previous month, in line with the expectations. The annual increase in earnings increased by 4.2 percent.

The unemployment rate is at record lows, but so are the massive layoffs plans of giant companies at the same record level. We expect a rapid increase in the unemployment rate, especially in the second half of the year. If that happens, the Fed may have to rewrite the whole story.

Gathering for its annual meeting in Washington, the IMF expects global growth to slow significantly. The FED, moving on from talking up the possibility of a soft landing after aggressive interest-rate increases, now says a “mild recession” is likely by the end of the year. Stocks fell as recession concerns weighed on Wall Street, even as traders assessed the release of cooler-than-expected inflation data.

The most deeply inverted part of the U.S. yield curve is one that hasn’t sent a false signal about the prospects of a U.S. recession in more than a half-century of research. 

Economy executives, news and economic data suggest a recession is extremely likely. Under normal circumstances, there is an inverse relationship between economic data and the market effect of the data. But nowadays and in the near future, the data seems to affect the market as it is.