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Saturday, April 1, 2023

Credit Suisse Rocked Wall Street: Will There Be a Banking Crisis?

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Wall Street closed lower on Wednesdaybut cut heavy losses after the financial problems of Credit Suisse that revived fears of a banking crisiswhich eclipsed bets on a lower interest rate hike in the United States in March after weak economic data.

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“We are seeing movement in the news, but not serious news, which is good (…) I don’t think we are in the 2008-2009 phase, far from it, when it comes to contagion”said Joe Saluzzi, co-operations manager at Themis Trading.

What happened this day was that US-listed Credit Suisse shares fell to a record lowafter what the biggest investor in the bank said he could not provide him with any more financingstarting a fall in European lenders’ stocks and putting pressure on US banks as well.

“Yesterday’s rebound in financials, banks, made sense, but the predominant factor is a loss of confidence and fear of the unknown”said Mark Stoeckle, chief executive and portfolio manager of Adams Funds.

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Credit Suisse’s problems put further pressure on the US banking sector, undoing the relief of emergency measures taken by the US authorities to prevent contagion after the collapse of SVB Financial and its competitor Signature Bank.

Some investors believe that The aggressive increases in interest rates in the United States by the Federal Reserve have caused cracks in the financial system.

According to preliminary data, the S&P 500 lost 26.23 points, or 0.7%, to 3,893.06, while the Nasdaq Composite gained 7.19 points, or 0.1%, to 11,435.33. The Dow Jones average fell 268.87 points, or 0.8%, to 31,886.53.

Source: Ambito

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