The US stock market ended in the red last week with the collapse of Silicon Valley Bank and Silvergate Capital. The Financial sector took a big hit ending with a -8.5%, with the Materials sector going second at -7.64%. S&P500 gave back its gains for the year and ended with a YTD return of 0.58%. Dow Jones Industrial slipped deeper into negative territory as it ended with a -4.53% and -3.75% YTD.
| Index | Last | YTD | 1 Week Return |
| S&P 500 | 3861.59 | 0.58 | -4.55 |
| S&P 500 Energy | 628.78 | -6.48 | -5.35 |
| S&P 500 Materials | 491.26 | 0.35 | -7.64 |
| S&P 500 Industrials | 835.48 | 0.49 | -4.46 |
| S&P 500 Consumer Discretionary | 1,072.43 | 6.66 | -5.55 |
| S&P 500 Consumer Staples | 741.17 | -4.87 | -1.92 |
| S&P 500 Health Care | 1,443.91 | -8.93 | -3.95 |
| S&P 500 Financials | 546.28 | -4.12 | -8.50 |
| S&P 500 Information Tech | 2,366.99 | 8.97 | -3.06 |
| S&P 500 Consumer Services | 170.71 | 7.12 | -4.10 |
| S&P 500 Utilities | 325.20 | -9.28 | -2.88 |
| S&P 500 Real Estate | 226.19 | -2.66 | -7.00 |
| S&P Dividend Aristocrats | 730.2 | -2.51 | -4.63 |
| Dow Jones Industrials | 31,909.64 | -3.73 | -4.53 |
Market Moving News
Markets have experienced a shockwave with news of the collapse of Silicon Valley Bank and Silvergate Capital bank liquidation– Silvergate Capital, one of the main lenders to the crypto industry said that it is liquidating its bank and winding down its operations last Wednesday. On Silicon Valley Bank’s side, the bank made an announcement that triggered panic among key venture capital firms, who reportedly advised companies to withdraw their money from the bank. The bank announced last Wednesday that it had sold a bunch of securities at a loss and that it would sell $2.25 billion in new shares to shore up its balance sheet.
Chairman Powell reiterates that Fed’s Hawkish Stance – Jerome H. Powell, the Federal Reserve chair, made it clear last Tuesday how they are willing to raise interest rates higher if economic data remains hot even at some cost to the labor market to fight inflation which he mentions is “very likely”.
Significant Developments
Altria (MO)Announces Definitive Group Agreement To Acquire Njoy Holdings – Altria disclosed its definitive group agreement to acquire NJOY Holdings, Inc. (NJOY) for approximately $2.75 billion in cash payable at the closing of the transaction. Terms include an additional $500 million in cash payments that are contingent upon regulatory outcomes with respect to certain NJOY products.
Con Edison (ED) Announces accelerated share repurchases amounting to $1 Billion – Consolidated Edison Inc. (ED) announced that it has reached an accelerated share repurchase agreement with two dealers to repurchase $1 billion in aggregate of its common shares.ED confirmed that the funding comes from proceeds of their sale of Con Edison Clean Energy Businesses, Inc, and the final settlement of the transactions under the agreements is expected to occur no later than the third quarter of 2023.
Chevron and JERA sign MOU to explore carbon capture and storage projects in US and AU – Chevron New Energies (Chevron), a division of Chevron U.S.A. Inc., and JERA Co., Inc. (JERA) have signed a Memorandum of Understanding (MOU). The MOU will increase the potential to expand the relationship that Chevron and JERA have today in Liquid Natural Gas (LNG). The MOU details a framework for their collaboration on carbon capture and storage (CCS) projects specifically in the US and AU.
ABM Reports Q1 2023 results – ABM announced its Q1 2023 financials with increased revenue of 2.8% during its first month ending January 31, 2023. According to ABM’s quarterly report, this was due to Momentum and RavenVolt acquisitions completed in 2022 for the acquisition growth and business expansion with existing customers as well as new business within M&D and Education and the recovery in the volume of our business in Aviation for its organic growth numbers
Brown-Forman Reports Q3 Financials – Brown‑Forman Corporation announced its Financials that ended January 31, 2023. According to Brown-Forman, reported net sales increased 4% ($1.1 billion) YoY for the same quarter, and a decrease in its reported operating income by 50% due to its higher operating expenses that includes post-closing costs and expenses
and acquisitions of Diplomático and Gin Mare. Diluted EPS also decreased 61% to $0.21 in the quarter which was driven primarily by the decrease in reported operating income and a $27 million pension settlement charge.
General Dynamics Increases Dividends – The company has announced its quarterly dividend of $1.26 per share on the company’s common stock, payable May 6, 2022, which represents a 5.9% increase over last year’s dividend.
Colgate Announces Dividend Increase Effective 2nd Quarter 2023 – The company has announced its quarterly dividend to $0.48 per share for its common shareholders, up from $0.47 per share. The increase will be effective in the second quarter of 2023 and is to be paid on May 15, 2023, to shareholders of record as of April 21, 2023.
Week Ahead
All eyes on inflation data release – With Friday’s U.S. employment data already up, this week’s inflation report would be one the final factor in determining whether policymakers would return to larger size rate increases to fight off inflation numbers. However, investors should still take note that with the recent Silvergate Capital and Silicon Valley Bank turmoil it’s going to be difficult if the narrative stays the same. CPI release will be tomorrow March 14, 2023.
Silicon Valley Bank Fallout – All eyes are still on the SVB fallout. The market is continuously watching as things unfold on the SVB fallout. FDIC announced last week that insured depositors will have access to their deposits no later than Monday morning and SVB branch offices will also reopen at that time, under the control of the regulator.
