![]() The sheer size of these big companies means their gains helped lift the whole index. Insulated from the trouble in the regional banks, Microsoft, Alphabet and the chip-maker Nvidia all rose more than 10 percent this week. There are also some characteristics of the S&P 500 that can mask some of the pain under the surface. Authorities guaranteed deposits at SVB and Signature, and in Europe, Credit Suisse said it would tap a $54 billion lifeline from the Swiss National Bank after investors there began to panic over its financial state - though for very different reasons than with SVB. It helped that policymakers in the United States and Europe stepped in to back their banks. It shows that, to stock investors at least, the crisis in the banking sector appears mostly contained. The good news for most investors is that the S&P 500 was resilient to worries that centered on the banking industry, and after a big rally on Thursday, the index ended the week with a gain of 1.4 percent. The broader stock market seemed to look beyond this week’s turmoil. First Republic has lost over 80 percent of its value since the start of the month, PacWest and Western Alliance roughly 60 percent. The selling has left shares of the banks’ sharply lower than they were before the collapse of Silicon Valley Bank. Then on Friday, selling resumed, and First Republic dropped a further 20 percent. The wave of selling in their shares appeared to subside on Thursday, after a group of rival lenders said they would bolster First Republic with $30 billion in deposits. The bank’s shares plunged, depositors rushed to pull out their money and, within days, authorities seized control of the bank (as well as Signature Bank, based in New York), pledging to keep it open for business.īut in the markets, investors couldn’t shake the worry that other banks were facing similar problems, and that induced a panic regarding a number of small lenders, including First Republic Bank, PacWest and Western Alliance. The trouble began on March 8, when Silicon Valley Bank revealed steep losses on its portfolio of government bonds and mortgages, ostensibly safe investments that backed the bank’s deposits and that had taken a hit from rising interest rates.
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |