The stock market was sharply lower last week as Silicon Valley Bank and Signature Bank were seized by regulators in some of the largest bank failures in US history. The Federal Reserve quickly stepped in to guarantee depositors of their funds and to help contain the crisis. It will take several weeks to see how much contagion there may be to other regional banks, and it’s debatable whether these failures were due to poor management at the individual bank level or from the broader issue of the Federal Reserve hiking interest rates so aggressively.
Although the stock market dropped last week, the S&P 500 is still 10% above the lows of mid-October. It seems as if these bank failures are currently the main driver of stock prices but we’ll hear from the Federal Reserve next Wednesday and that may take center stage. It will be interesting to see how Jerome Powell addresses the banking issues and if it affects his decisions on future rate hikes.
This current market drop is a great time to buy. If you haven’t already, maximize your 2022 retirement account contributions prior to the deadline of April 18th, or begin to make your 2023 contributions now.
Photograph by: Oleksandra Bardash on Unsplash
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