V2 Model March 18 2023 UPDATE

Recap

With investors lacking confidence in the banking industry, a risk-off mentality drove price action for most of the week. Risk-averse buyers piled into mega-cap stocks that are viewed as distant from the banking sector fallout, having strong balance sheets and being more resilient in a recession.

Similarly, price action in the Treasury market also reflected a flight to safety in conjunction with concerns the economy may weaken considerably because of the banking sector's problems. On a related note, oil prices dropped 13.5% this week to $66.33/bbl on demand concerns.

The 2-yr note yield plunged 77 basis points this week to 3.82% and the 10-yr note yield fell 30 basis points to 3.40%, also driven in part by a belief that the Fed isn't going to be able to raise rates as much as previously thought and may be forced to cut rates relatively soon.

The V2 Portfolio was slightly down this week.

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