Global Multi-Asset Investment Strategist, True Insights

Jeroen Blokland

Global Multi-Asset Investment Strategist

Build Well-Diversified Multi-Asset Portfolios

True Insights

Our research helps investors build well-diversified multi-asset portfolios and profit from market developments. In addition, our unique and proven Macro – Sentiment – Valuation (MSV) investment framework ensures a consistent flow of new investment opportunities. Together with our market views, these opportunities will be reflected in our live ETF-based Global Multi-Asset Portfolios.

Macroeconomics

<ul>
<li>Total Eurozone bank deposits have hardly declined, while US bank deposits have been coming down for just over a year.</li>
<li>Yet, depositors are switching from Overnight deposits, callable immediately and earning the lowest interest rate, to longer-maturity deposits with some yield pickup.</li>
<li>The decline in Overnight deposits has contributed to a decrease in M1 Money Supply Growth of 2.7%. This significantly impacts the inflation outlook.</li>
</ul>


Total Eurozone bank deposits have hardly declined, while US bank deposits have been coming down for just over a year.
Yet, depositors are switching from Overnight deposits, callable immediately and earning the lowest interest rate, to longer-maturity deposits with some yield pickup.
The decline in Overnight deposits has contributed to a decrease in M1 Money Supply Growth of 2.7%. This significantly impacts the inflation outlook.


Eurozone Deposits Stable, but a Lot Is Happening Underneath

Cross Asset Strategy

<ul>
<li>The (equity) risk premium for banks (<a href="https://www.smartkarma.com/entities/spdr-s-p-bank-etf" target="_blank" data-smartkarma-citation="entities:32764:1" rel="noopener">SPDR S&amp;P Bank ETF (KBE US))</a> will go up while bank profitability will go down. There will be questions about smaller bank regulations.</li>
<li>Startups and smaller tech funds will struggle, potentially resulting in a lower valuation of the entire technology space (<a href="https://www.smartkarma.com/entities/ishares-us-technology-etf" target="_blank" data-smartkarma-citation="entities:32856:1" rel="noopener">iShares US Technology ETF (IYW US)).</a>
</li>
<li>Unless the Bank Term Funding Program does not solve the liquidity issues, the Federal Reserve must continue raising rates, forcing another standoff with markets (<a href="https://www.smartkarma.com/entities/spdr-s-p-500-etf-trust" target="_blank" data-smartkarma-citation="entities:763:1" rel="noopener">SPDR S&amp;P 500 (SPY US))</a> .</li>
</ul>


The (equity) risk premium for banks (SPDR S&amp;P Bank ETF (KBE US)) will go up while bank profitability will go down. There will be questions about smaller bank regulations.
Startups and smaller tech funds will struggle, potentially resulting in a lower valuation of the entire technology space (iShares US Technology ETF (IYW US)).

Unless the Bank Term Funding Program does not solve the liquidity issues, the Federal Reserve must continue raising rates, forcing another standoff with markets (SPDR S&amp;P 500 (SPY US)) .


Silicon Valley Bank: Some Observations on Contagion, Moral Hazard, and Monetary Policy

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>SPX is holding above its 200-day MA/3940 coinciding with its prior downtrend from 2022 near 3915; 3915-3940 remains critical support, and is the gateway to a much deeper pullback.</li>
<li>Additionally, the Nasdaq 100 (QQQ) is breaking back above $297, another important line in the sand for us.</li>
<li>The SPX holding at 3915-3940 could be the spark that allows another run toward YTD highs, but we continue to expect 4165-4200 to cap upside on the S&amp;P 500.</li>
</ul>


SPX is holding above its 200-day MA/3940 coinciding with its prior downtrend from 2022 near 3915; 3915-3940 remains critical support, and is the gateway to a much deeper pullback.
Additionally, the Nasdaq 100 (QQQ) is breaking back above $297, another important line in the sand for us.
The SPX holding at 3915-3940 could be the spark that allows another run toward YTD highs, but we continue to expect 4165-4200 to cap upside on the S&amp;P 500.


Still Expecting 4165-4200 on S&P 500 to Cap Upside; Buys Within Insurance and Steel/Metals

<ul>
<li>Despite a few tumultuous trading days, the S&amp;P 500 remains above its 200-week MA (3590-3600) and the Russell 2000 (IWM) remains above $163 -- both important support levels moving forward.</li>
<li>We continue to see potential for a bear market rally (~+10% from the lows) as long as these support levels hold.</li>
<li>Bear market rallies would be confirmed by bullish reversals of the 2-month downtrends, or above 3810 on the SPX and above $174 on the IWM, and the latter happened today.</li>
</ul>


Despite a few tumultuous trading days, the S&amp;P 500 remains above its 200-week MA (3590-3600) and the Russell 2000 (IWM) remains above $163 -- both important support levels moving forward.
We continue to see potential for a bear market rally (~+10% from the lows) as long as these support levels hold.
Bear market rallies would be confirmed by bullish reversals of the 2-month downtrends, or above 3810 on the SPX and above $174 on the IWM, and the latter happened today.


Bear Market Rally Remains in Play; Russell 2000 (IWM) Short-Term Breakout; Buys in Banks & Insurance

iShares Russell 2000 ETF / Technical Analysis

<ul>
<li>As we noted last week, $209 on the Russell 2000 (IWM) is arguably the most significant resistance level of all right now.</li>
<li>We would like the see a break above $209 on the IWM in order to have a sustainable new bull market.</li>
<li>4590-4600 is a significant resistance level on the S&amp;P 500 we are watching; if bears fail to show up there, next up would likely be a test of all-time highs.</li>
</ul>


As we noted last week, $209 on the Russell 2000 (IWM) is arguably the most significant resistance level of all right now.
We would like the see a break above $209 on the IWM in order to have a sustainable new bull market.
4590-4600 is a significant resistance level on the S&amp;P 500 we are watching; if bears fail to show up there, next up would likely be a test of all-time highs.


Russell 2000 (IWM) Still Testing $209 Resistance: Actionable Groups: Insurance, Shipping, Utilities

United States

SPDR S&P Bank ETF is an exchange-traded fund incorporated in the USA. The Fund's objective is to replicate the performance of the S&P Banks Select Industry Index. The Index itself is a float adjusted modified-market capitalization weighted index of geographically diverse companies representing national money center banks & regional banking institutions listed on US stock markets.

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SPDR S&P Bank ETF (KBE US)

Eurozone Deposits Stable, but a Lot Is Happening Underneath

US and Eurozone banks deal with the same issue: depositors searching for yield. The only difference is that in the Eurozone, depositors have few...

Jeroen Blokland

Silicon Valley Bank: Some Observations on Contagion, Moral Hazard, and Monetary Policy

After the US Treasury and Federal Reserve intervention, where are we now on contagion risk and monetary policy after the Silicon Valley Bank demise?

Jeroen Blokland

Still Expecting 4165-4200 on S&P 500 to Cap Upside; Buys Within Insurance and Steel/Metals

The $SPX holding at 3915-3940 could be the spark that allows another run toward YTD highs, but we continue to expect 4165-4200 to cap upside and...

Vermilion Research

Bear Market Rally Remains in Play; Russell 2000 (IWM) Short-Term Breakout; Buys in Banks & Insurance

A bear market rally (+10% from the lows) remains in play as long as the $SPX remains above its 200-week MA (3590-3600) and the $IWM remains above...

Vermilion Research

Russell 2000 (IWM) Still Testing $209 Resistance: Actionable Groups: Insurance, Shipping, Utilities

$209 on the Russell 2000 ($IWM) is arguably the most significant resistance level of all right now, and we would like the see a break above $209 in...

Vermilion Research

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52-week Range

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