(News Bulletin 247) – The New York Stock Exchange started cautiously higher on Monday morning, taking advantage of the stabilization of the banking sector after the bout of volatility observed in recent weeks.

At the end of the morning, the Dow Jones advanced 0.6% to 32,418.7 points, while the Nasdaq Composite nibbled around 0.1% to 11,840.9 points.

Global equity markets are supported by the strong rise in the Ifo business climate index in Germany as well as the announcement of the takeover of SVB by First Citizens Bank.

If the fear surrounding the health of the financial system recedes, the markets should remain very volatile due to the lack of clear signals in the evolution of inflation and the economic outlook.

‘While volatility may persist in the short term as confidence in the banking sector may take some time to return fully, opportunities may arise in equity markets (… ) in the coming months’, promises Mona Mahajan, at Edward Jones.

According to the strategist, investors could begin to abandon their defensive choices and bet more on an economic recovery and an awakening of cyclicals with the easing of fears on banking stocks.

At sector level, the finance index is up 0.9% today, but still shows a decline of more than 12% over the past month.

Investors nevertheless seem to be reluctant to take positions that are too clear-cut before the important meetings of the next few days, and especially the data on inflation which will be published on Friday.

While the PCE index – which will be released at the same time as household income and spending – has every reason to slow in March against a backdrop of ebbing energy prices, core inflation has interrupted its decline for three months, which justifies the Fed remaining on alert.

On the oil market, the barrel of American light crude oil (West Texas Intermediate (WTI)) rebounded 1.1% above 70 dollars with the alleviation of fears of a banking crisis and an entry into recession.

The bond markets are suffering from the movement in risk appetite which is supporting the equity markets with a yield on ten-year Treasuries which has tightened by almost 10 basis points to around 3.48%.

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