3/12/23 Sunday Market Preview

Grains are called slightly higher to start, but bullishness over weather will have to contend with a risk-off tone that should develop across most markets because of concern about the Silicon Valley Bank drama. In the Headlines The failure of Silicon Valley Bank is going to be felt further this week as regulators decide what to do with billions of dollars of deposits that exceeded FDIC insurance. A run on the bank reportedly produced unfulfilled withdraw requests of over $42 billion last week. Part of those deposits will be counted on by companies that need the funds to make payroll this week, so major layoffs are a possibility. There will also be risk of a domino effect when more companies and individuals attempt to move deposits out of banks that they fear are similarly vulnerable. There may be additional strength in bonds as investors move their money to safer assets, and as traders bet that interest rates will have to ease. The Federal Reserve Bank announced an emergency meeting for Monday, when options for backstopping Silicon Valley Bank will be discussed. On Friday, the market quickly adjusted its odds toward expecting a 25 basis point hike on the next meeting…