9:38 a.m. ET, May 3, 2023
The four things keeping Wall Street on edge right now
Well, it was a nice 24 hours we had there, thinking the banking crisis might be kinda-sorta wrapping up. Then Wall Street woke up Tuesday and had a change of heart.
What happened to make Wall Street lose its cool yesterday?
In short: There are too many things to worry about right now. We’ve got the all-important Fed meeting, the April jobs report set for Friday, the threat of a US default in less than a month, and, of course, the sneaking suspicion that banks are not, actually, in the clear.
Everyone’s basically wondering which regional bank is going to be the next to stumble. Investors are eyeing banks with profiles similar to SVB, Signature and First Republic — regional, coastal, heavy on uninsured deposits.
Tuesday’s selloff also reflects some general anxiety about macroeconomic news on the horizon.
Parsing Powell
This afternoon, all eyes will be on Fed Chair Jay Powell when he announces the central bank’s latest policy decision — widely expected to be another quarter-point hike.
Investors will be tuned in for any sign, explicit or implicit, that the Fed board is going to hit pause.
“I’m hoping that they sit around today and look at each other and say, ‘we can’t do this,’ ” Daniel Alpert, Managing Partner of Westwood Capital, told me. “I think they feel committed to this last 25 basis points, but I think the message he should deliver tomorrow is: ‘Higher for longer’ just to make the hawks happy. And basically, ‘we see this as the last for a while.'”