storm in New York which had a profound impact on the europe stock exchanges on a black Monday the 13th, of panic and bewilderment.
To the europe stock exchanges closed with sharp declines due to fears of a new financial crisis. Wall Streetafter the storm, turned by the quick intervention of the Federal Reserve and expectations of a possible change in its interest rate hikes. He IBEX 35 it gave up 3.51% in its worst session since June. This Tuesday, the 14th, it starts at 8,958.90 points due to the collapse of the bank.
Great attention has been paid to the unexpected crisis unleashed on Friday the 10th by the closure of the American bank SVB Financial Group. Events rushed into the weekend. On Sunday, the 12th, it became known of a second intervention by North American regulators, in this case in Signature Bank. This Monday, the 13th, investors questioned the future of First Republic Bank of San Francisco, collapsed up to 60% in the pre-opening and suspended on the Stock Exchange.
The extreme sensitivity of the banking sector to a crisis of confidence led to the Federal Reserve intervene urgently to try to avoid further contagion in the sector.
Due to this speed of action, the depositors of the intervening Bank of Silicon Valley they will be able to access their money again. The Fed’s emergency funding plan, for now, avoids further warnings among wall street investors It is radically changes the monetary expectations of analysis firms.
Goldman Sachs raised expectations about a sudden change in Fed’s Monetary Policy the root of the BLS crisis. The North American company, one of the most influential in the markets, now predicts that the federal police will not raise interest rates this month, as an additional measure to its emergency financing plan for american banks. This is how it will act in an attempt not to suffocate entities with greater financing difficulties.
This change changes the roadmap provided by the market.
Until Friday, economic analysts and gurus were expecting a new recovery in the federal police of 50 basis points at its March meeting. A break this month obliges us to adjust the portfolios to forex market investors. He dollar harvest. And the euro takes the opportunity to recover much of what has been lost in recent times. The euro reaches 1.07 dollars, compared to 1.05 it touched last week. The turnaround also comes to lb pound sterlingwhich exceeds $1.21.
Portfolio adjustments are no less forceful in the debt marketto the point of triggering the biggest rise since 1987 in short-term US debt, the most sensitive to interest rates.
In the longer term, the required return on the 10-year US bond, the market benchmark, rose from 4% last week to hit lows below 3.50%.
The drop in debt interest rates spreads to Europe given the likelihood of less aggressive interest rate increases. The yield on the German bund falls below 2.30%, and the Spanish ten-year bond loses 3.40%.
Lower rate pressures and the speed with which the Fed reacted to the SVB crisis gave some breathing room walls Road. The main indices, despite the strong swervesmoved with advances almost the entire session, to close with slight descents to Dow Jones it’s him S&P 500 (by 0.28% and 0.15%, respectively) and an increase in nasdaq of 0.45%.
He IBEX 35 lived a black Monday with dramatic connotations to collapse up to 4%. It fell 1.47% last Friday. It finally closed in the red, -3.51% and losing 9,000 points.
For the second consecutive day, banks monopolize the market spotlight and the biggest divestments. the last friday the contagion effect of the BLS crisis caused corrections of up to 5% in the margins of the IBEX 35. Specifically, sabadell, banker, Santander It is BBVA lost between 5.1% and 3.4%.
The declines gained strength in the shares of the sabadell (-11.81%), banker (-8.54%), CaixaBank (-6.24%), Santander (-7.35%), BBVA (-8.24%) and Unicaja (-7.78%) and extended to another financial amount such as the insurance company Mapfre (-4.27%).
Banks once again suffered the falls registered by the european stocks. The incipient financial crisis in the United States increased investors’ distrust of entities such as Swiss credit (-9.6%), commerzbank (-12.7%), Bper Bank (-9.5%) and unicredit (-9%).
In the oil market, the brent barrel less than 81 dollars. It’s him west texas barrelgives in to lose the $75.
The puncture of the dollar and the adjustment of expectations in the script for the fed toexpand gold price recovery. It surpassed $1,900 per ounce. The advances are much more forceful in the price of bitcoins. It skyrockets to over $24,000.
Attention to two initial lessons:
a) A powerful signal was sent across the United States that large deposits are not safe at smaller banks.
b) Smaller banks – including SVB and Signature, whose combined assets were only one-tenth the size of JP Morgan– received a much lighter regulatory burden. It was certainly a mistake.
President Biden and the Federal Reserve They performed briefly on Friday, Saturday and Sunday. It was a tremendous storm with a truce. But there are still nerves, tension and undisguised panic.