Why Have RSP and SPY Diverged?
What’s in Today’s Report:
- Why Have RSP and SPY Diverged?
Futures are little changed following a mostly quiet night as markets digest the actions by large banks to shore up FRC.
Positively, banks borrowed $165 billion from the Fed via the discount window and the new BTFP this week and that importantly shows banks are using the Fed’s programs to shore up liquidity.
On inflation, core EU HICP met expectations at 5.6% y/y, although that’s an increase from the previous 5.3% gain.
Today focus will remain on any banking headlines and economic data, but as long as there are no surprises from either (meaning KRE is stable) then stocks can digest this week’s volatility and hold yesterday’s gains.
Economically, notable reports today include Industrial Production (E: 0.4%), Consumer Sentiment (E: 67.0) and Leading Indicators (E: -0.2%), but again it’ll take a substantial surprise from them to move markets.