Shares fall on the stock market amid crisis in the banking sector
The sharp sell-off of Credit Suisse came after the collapse of the SVB, as Moody’s cut its credit outlook for the entire US banking sector to negative.
Credit Suisse provoked another sell-off in the stock market
US stocks opened lower in the stock market as banking fears resurfaced, this time with Credit Suisse in the spotlight after a key supporter said he could no longer inject money.
Trading at Credit Suisse was suspended after shares fell more than 22% in Europe amid fears of a liquidity crunch. Credit Suisse’s largest shareholder, the National Bank of Saudi Arabia, said it would not be able to put more money into the bank for regulatory reasons. The announcement raised concerns in an already fragile market. The authorities may be forced to act quickly because the collapse of this bank could have repercussions for other European banks exposed to creditor risk. It looks like we may be on the verge of another financial crisis.
The sharp sell-off of the bank came after the collapse of SVB and Moody’s downgrade of the credit outlook for the entire US banking sector to negative.
Separately, retail sales fell more-than-expected to -0.4% from a 3.2% rise in January. The data shows that the consumer is under pressure as interest rates rise.
The data comes after yesterday’s inflation data showed that core inflation rose unexpectedly by 0.5%, highlighting the need for the Fed to continue raising rates. The question is whether the financial system can sustain a further increase.
company’s news
Yesterday, Meta regained its solid gains in the stock market after announcing 10,000 new job cuts, the second major layoff in 6 months.
Shares of regional US banks fell in pre-market trading after a strong recovery yesterday. Shares of KeyCorp and PacWest Bancorp fell 4% and 13%, respectively.
FedEx is rising in the stock market before earnings reports are released today.
What’s next for the Dow Jones?
The Dow hit resistance at 34545 and rebounded below the multi-month uptrend line, 50-, 100- and 200-day moving averages. The SMA-50 moving average crosses the SMA-100 moving average below the SMA-100 moving average, which is a bearish signal. The RSI is also supporting a further decline as long as it remains outside the oversold zone. Bears will look for a break below 31450, a YTD low, to continue the downtrend towards 31000.
Source: StoneX, Tradingview
Currency markets – US dollar rises, euro falls
U.S. dollar gains on safe-haven flows as the banking bust continues, with Europe in the spotlight this time. US economic data plays a secondary role after the broader banking history.
The EUR/USD pair is falling amid fears that the financial crisis will spread across Europe after the failure of Credit Suisse. Meanwhile, inflation in France was revised up to 7.3%, the highest level it has reached in the euro area. Tomorrow the ECB will meet, and investors are lowering their expectations of further rate hikes.
GBP/USD declines in risky trading amid financial sector turmoil and as investors await the chancellor’s budget. The budget should be focused on growth and return to work. However, it looks like it will be overshadowed by chaos in the financial market.
- EUR/USD -1.3% to 1.0583
- GBP/USD -0.8% to 1.2053
Oil continues to sell off
Oil bears continue to push prices down. Oil has fallen for the third day in a row, down 8.3% this week and hitting a new low in 2023.
Banking fears hit the stock market’s risk appetite hard after major investor Credit Suisse said it could no longer bail out the bank. Fears of another financial crisis and contagion of the broader financial sector are overshadowed by the completely upbeat data from China and a report from the International Energy Agency that says China is waiting for the economy to reopen to stimulate oil demand. This comes a day after OPEC raised its demand forecast for China for this year.
Looking ahead, investors are awaiting official data on US oil inventories, which are expected to confirm the 1.2 million barrel increase in crude oil inventories reported by the American Petroleum Institute.
- WTI crude is trading up 1.5% at $70.45.
- Brent is trading up 1.2% at $76.10.
Fiona Chincotta, FOREX.com » Official site
Fiona has a deep understanding of the fundamentals of the market, gained from her 15 years of experience in the financial markets. It provides analysis and up-to-date information on financial markets, as well as the economy and monetary policy in the UK, US, Europe and Asia. Her name is regularly quoted in the global financial press, and her name appears frequently in the Financial Times, The Telegraph, Reuters and Bloomberg.
Disclaimer: The information and opinions contained in this report are for general information only and do not constitute an offer or solicitation to buy or sell any currency contracts or CFDs. Although the information contained herein has been obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness and accepts no liability for any direct, indirect or consequential damages that may result from anyone relying to such information.