Wall Street rebounds this Monday, March 13, and ignores the uncertainty of investors clinging to the possibility of moderation in Fed rates after the collapse of Silicon Valley Bank.
After starting the day in low, the Dow Jones operates with a rise of 0.7% to 32,144.75 points; while the Nasdaq Composite advanced 1.2% to 11,277.50. Meanwhile, the S&P500 advances 0.6% to 3,885.29 points.
“When you take such a big and fast step, the first thing you think is that the crisis has been avoided. But the second thought is: how big was that crisis, how big were the risks that this measure had to be taken? ?” said Rick Meckler, a partner at Cherry Lane Investments.
“The only positive for markets that I have heard from this is the belief that it will slow rate hikes as the Fed would seek to prevent further damage to the financial sector.“, he added.
US and European banks started the week with sharp declines after the collapse of Silicon Valley Bank and the Fed’s emergency measures, but after Joe Biden’s statement they reversed their trend.
However, there are some casualties that cannot be turned around: this is the case of First Republic Bank with a 70% decline on Wall Street while other banking entities also suffered a collapse such as Western Alliance Bancorp (-45%), PacWest Bancorp (-18%) or Zions Bancorporation (-12.8%).
San Francisco-based First Republic Bank issued a note Sunday seeking to reassure its clients that it was “strengthening and diversifying their liquidity.” with access to new funds from the Federal Reserve and JP Morgan Chase bank.
So far, the big US banks – JPMorgan Chase, Bank of America, City Group and Wells Fargo – seem to be resisting and have not been swept up in the panic since last Thursday.
Joe Biden’s word in the midst of the crisis
President Joe Biden assured Americans on Monday that their banking system “is safe” and their deposits will be available “when they are needed”, after the bankruptcy of Silicon Valley Bank and Signature Bank, which threatened to trigger a broader crisis.
In statements from the White House, Biden added that US taxpayers will not bear the bank’s losses and that he will ask Congress to “strengthen” regulation of the banking sector.
Biden hinted at new regulation of big banks in the wake of America’s biggest bank failure since the 2008 financial crisis, but he faces a divided Congress that is unlikely to pass tougher new rules.
Source: Ambito
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