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Thursday, March 30, 2023

Global banking crash: shares of the financial sector plunged up to 80%

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The markets spent a few days of terror. According to an Econviews report, almost comparable to the beginning of March 2020, when the world took on the dimension of what Cov-19 implied. The bankruptcy of Silicon Valley Bank negatively influenced the price of the banking sector and the S&P 500 lost 2% since Wednesday the 8th.

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Exactly on Wednesday, March 8, two days before the fall of Silicon Valley Bank, the entity announced that it had sold -at a loss- some of those treasury bonds that had been devalued since 2022. The SVB said it had lost $2 billion on the sales.

So, regional banks lost 28%, but this crisis also hit giants like Wells Fargo (-14%), Citi (-13%) or JPMorgan (-9%). On the other side of the Atlantic, Credit Suisse sank (-30%) and rebounded in banks such as BNP Paribas (-19%), Santander (-18%) or HSBC (-14%). It should be noted that Signature and SVB were delisted from Wall Street.


Wall Street fell sharply this Friday

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Wall Street closed lower on Fridayand marked the end of a tumultuous week dominated by the crisis in the banking sector and the dark clouds of a possible recession. The Dow Jones closed with a slight weekly decline.

According to preliminary closing data, the S&P 500 lost 43.81 points, or 1.1%, to 3,916.47 points; while The Nasdaq Composite lost 87.63 points, or 0.7%, to 11,629.64 units.s. The Industrial Average Dow Jones Industrials fell 386.71 points, or 1.2%, to 31,858.95 points.

The S&P 500 managed to save the week and close with a rise of 1.4%, like the Nasdaq that advanced almost 4.4% in these five days. On the other hand, the Dow Jones cut positions by falling 0.16%.

In a week, First Republic lost 80% of its market capitalization. Although it took the worst part on Friday, FRC (its symbol on the stock market), dragged down other regional banks such as PacWest (-18.9%), also from California, Western Alliance (-15.5%), based in Phoenix (Arizona), or the Texan Comerica (-8.4%).

The giants of the sector also suffered with falls for Goldman Sachs (-3.7%) and JPMorgan Chase (-3.8%), whose decline dragged down the Dow Jones.

Investors will now turn their attention to next week’s Federal Reserve policy meeting.

Lastly, FedEx Corp shares rose after the shipping company raised its guidance for the current fiscal year.

Source: Ambito

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