S&P 500 Volatility Continues As Investors Digest Latest Banking Sector Headlines

Zinger Key Points
  • Analysts currently project 17% upside for the S&P 500 over the next 12 months, according to FactSet.
  • Investors will get a key economic update next Friday with the February personal consumption expenditures price index reading.

The SPDR S&P 500 ETF Trust SPY experienced another volatile week of trading amid ongoing concerns over the stability of the banking industry.

On Friday, Deutsche Bank AG DB shares dropped more than 3% after the price of the bank's credit default swaps jumped, indicating market concerns about the bank's health.

The Deutsche Bank sell-off came after Swiss regulators forced UBS Group AG (NYSE: UBS) to acquire Credit Suisse Group AG CS as part of an emergency rescue last weekend. The U.S. banking sector has dealt with its own liquidity issues in recent weeks, including the failures of SVB Financial Group SIVB, Signature Bank SBNY and Silvergate Capital Corp SI.

On Wednesday, the Federal Open Market Committee raised its fed funds target range by 0.25% to between 4.75% and 5%. In its updated economic projections, the Federal Reserve raised its outlook for 2023 core personal consumption index inflation to 3.6%, up from 3.5% in December.

On Thursday, Ford Motor Co F reported its electric vehicle business lost $2.1 billion on an operating basis in 2022. Ford reassured investors the EV losses were more than offset by $10 billion in annual operating profits from the company's internal combustion engine auto sales and fleet business.

On Tuesday, Amazon.com, Inc. AMZN announced another 9,000 layoffs in addition to the 18,000 job cuts the company executed between November and January in its ongoing cost-cutting efforts.

Game On: Shares of video game retailer GameStop Corp. GME gained 35% on Wednesday after the company reported its first profitable quarter since January 2021.

In the week ahead, investors will see more quarterly reports from Carnival Corp CCL on Monday, Micron Technology Inc MU and Walgreens Boots Alliance Inc WBA on Tuesday and BlackBerry Ltd BB on Thursday.

Analysts currently project 17% upside for the S&P 500 over the next 12 months, according to FactSet.

Economic Numbers: Investors will get key economic updates on Friday when the Bureau of Economic Analysis releases its February personal consumption expenditures price index reading and the University of Michigan releases its March consumer sentiment index reading.

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