Markets: News  

The stock market is trading with a positive disposition ahead of tomorrow's FOMC policy decision. Yesterday's pleasing finish, which had the S&P 500 close above its 200-day moving average, has helped the positive bias along with renewed buying in many bank stocks and a contrarian buying catalyst in the form of the BofA Global Fund Manager Survey, which showed investor sentiment is close to levels of pessimism seen at lows of the past 20 years. Bank stocks are leading the upside charge after a Bloomberg report indicated the Treasury Department is looking at ways to guarantee all bank deposits, if necessary, without congressional approval. This was followed by Treasury Secretary Yellen's remark in prepared comments for the American Bankers Association that the government is prepared to intervene again "if smaller institutions suffer deposit runs that pose the risk of contagion." The SPDR S&P Bank ETF (KBE) is up 4.8% and the SPDR S&P Regional Banking ETF (KRE) is up 5.3%. Even First Republic Bank (FRC 17.59, +5.39, +44.4%), which has been at the epicenter of recent bank industry turmoil, trades up 42.0% today. FRC is also responding to reports that it's pursuing strategic alternatives, including a possible sale. Other embattled regional banks are up big in solidarity, namely PacWest Bancorp (PACW 12.05, +1.77, +17.2%) and Western Alliance Bancorp (WAL 35.49, +6.25, +21.4%). Unsurprisingly, the S&P 500 financial sector (+2.3%) is among the top performers today along with energy (+2.7%). The defensive-oriented utilities (-2.8%) and consumer staples (-0.6%) sectors have fallen towards the bottom of the pack. Today's advance saw the S&P 500 reach 3,998 at its high, lifting it above its closing level on March 8 (3,992), which is the day before the SVB Financial blowup started to hit the scene. The main indices have pulled back from their best levels, but continue to hold decent gains within fairly narrow trading ranges. There's also been some unwinding of the safety premium in the Treasury market. The 2-yr note yield is up 24 basis points to 4.16% and the 10-yr note yield is up nine basis points 3.56%.Reviewing today's economic data:Existing home sales surged 14.5% month-over-month in February to a seasonally adjusted annual rate of 4.58 million (Briefing.com consensus 4.16 million) versus an unrevised 4.00 million in January. Sales increased on a month-over-month basis in February for the first time in 13 months. Total sales in February were down 22.6% from a year ago.The key takeaway from the report is the understanding that the median selling price declined for the first time in 11 years, underscoring the affordability challenges that have been presented by rising mortgage rates and prospective buyers' misgivings about potentially buying at a cyclical top in the housing market.