Macro eventsAs much as I like SU for its cash flows and earnings at current oil prices, the company seems like the tail of the dog instead of being the dog itself. Macro events are the dog most of the time.
How will the FED will react to the bank failures going forward? Will JPow give the market another kick in the teeth next week? Or will the FED want to pause rate hikes knowing that the historic speed of rate hikes likely caused the recent bank failures due to the collapse in bond portfolio values.
While it is easy to point a finger at mismanagement by the banks, how in the world were they supposed to match maturities when there were 4 consecutive rate hikes of 75 points each plus two 50 point rate hikes and one 25 point hike. It was just a year ago when the FED was telling the world that inflation was temporary and was something to be watched as opposed to being a concern.
The move by the US administration to bail out the banks by making good on ALL deposits as opposed to the standard $250,000 maximum deposits is a clear indication that bond portfolio values and maturity matching is a much greater problem for the banks than anyone is saying.
The decison by the USA administration to create a precedent of bailing out the 3 small banks now was probably a really smart move rather than letting the liquidity problem become much bigger.
We will eventually learn the real cost of the bail outs over time regardless of the spoon fed headlines.
The market is much more scary today than it was a week ago and it was pretty scary a week ago.