Daily Market Color

Equities Take a Breather

Equities and yields decline
After yesterday’s rally, U.S. equities declined on the day with the S&P down 0.81%. Tech shares lead the decline while investors continue to weigh the rise in real yields effect on future borrowing costs. Concerns in the equity market led investors to Treasurys with yields declining across the curve. The 10yr UST yield finished 3bps down on the day to 1.39%.
Small banks see C&I growth, while annualized deposit growth continues to dominate
The 2/17 Fed H8 release showed C&I loans at small banks increased from an annualized growth rate of 5.29% to 8.88% compared to the prior week with the second draw period for PPP loans for companies with more than 20 employees coming to a close on 2/24. CRE at small banks continued to grow, albeit at a slower pace than the previous week with annualized growth decreasing to 1.61% (1.71% from the prior week). Deposits on an annualized basis are up on the week for both large and small banks at 12.56% and 19.81% (vs. 7.34% and 18.69% from the prior week), respectively.
National COVID cases lower, but averages increase
COVID cases saw their lowest levels since October with 48,092 reported cases in the U.S. However, average cases increased in 16 states and Washington D.C. compared to the prior week.

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