Highlights: The trading session was volatile on Thursday as markets were digesting Jerome Powell’s message from the previous day. Major US indexes end up closing higher, with tech outperforming due to investors reducing bets on rate hikes and treasury yields declining.

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Bank of England hikes interest rates again following inflation shock (3 min read)
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The Bank of England has raised interest rates by 0.25%, marking its 11th consecutive hike and bringing the key rate to 4.25%, the highest since October 2008. The central bank cited stronger-than-expected inflation and robust employment growth as reasons for the move. UK consumer prices rose 10.4% in February year-over-year, but officials expect it to fall rapidly to around 3% in Q4 this year. Like other major central banks, the Bank of England decided to push ahead with further rate hikes despite recent banking sector turmoil.

The inflation factor that has the Fed taking risks with a banking sector on edge (9 min read)
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The Fed has raised interest rates by 0.25%, in spite of potential bank failures, with a likely second hike later this year. Regardless of the thoughts of traders and investors, Fed Chair Jerome Powell confirmed that there will be no rate cut in 2023. The focus remains on inflation, due to the labor market remaining too hot, with wage growth not cooling enough for comfort. Powell has said that there is a pathway to a soft landing, but the Fed needs more evidence to believe that the banking sector issues alone can do the central bank’s disinflationary work.

Ford’s EV business lost $2 billion in 2022, offset by big profits in fleet and legacy units (3 min read)
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Ford Motor reported that its electric vehicle (EV) unit lost $2.1 billion last year, and forecasted a similar loss of $3 billion for 2023. However, the loss was offset by $10 billion in operating profit from the company's internal combustion and fleet businesses. It was reported to give investors a better understanding of how the EV unit was evolving, while also showing how profits from the company's internal combustion businesses were funding its electric transformation. Ford hopes to build EVs at a rate of 2 million per year and achieve a 10% profit margin by 2026.

American Households Likely to Sell $750 Billion in Stocks, Goldman Sachs Estimates (2 min read)
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Goldman Sachs strategists predict that US households will sell $750bn of stocks this year, marking the first annual decline in demand since 2018. Higher bond yields and lower savings are among the factors cited for the shift. The team said that households would instead increase their allocation to credit and money-market assets. US households have been significant buyers of stocks over the past decade. Although this trend saw a slowdown last year as the Fed began raising rates, households still directly own 38% of the total US equity market.

If you like big banks, there’s an ETF for that (3 min read)
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Roundhill Investments has launched a new Big Bank ETF (BIGB) in response to the fallout from the Silicon Valley Bank collapse. The fund includes six large banks: Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo. The ETF has an expense ratio of 0.29%, rebalances quarterly, and reconstitutes annually. While larger banks are being seen as relatively safe havens, regional banks remain volatile. It’s advised that investors should research funds carefully and avoid investing in the financial sector solely based on headlines.

Wood’s ARKK Bought Coinbase, Block Before Shares Tumbled (2 min read)
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Two top holdings in ARK Invest’s flagship fund, ARK Innovation ETF (ARKK), fell significantly in a single day, highlighting the volatility of fintech and crypto investing. Coinbase shares fell 12% after it received a Wells Notice from the SEC, while Block fell 13% after a short-seller claimed the company inflated user numbers with fake accounts. ARK had been adding to both positions just before they plummeted. Despite the drops, ARKK only fell less than 1% on Thursday, and it has gained 29% this year, with Tesla as its top holding.

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