NEW YORK (Dow Jones) — Wall Street rose sharply on Tuesday as fears of a banking crisis eased. After the solution for the systemically important Credit Suisse, which had gotten into trouble, there were also indications that the small regional institute First Republic Bank in the USA would be rescued. The course jumped 29.5 percent, it had recently crashed after difficulties at the bank and had lost 47 percent the day before. The course was fueled by reports that JP Morgan is working to support the bank – it is about strategic alternatives such as a capital increase or a sale.
The Dow Jones index gained 1.0 percent to 32,561 points. The S&P 500 climbed 1.3 percent and the Nasdaq Composite rose 1.6 percent. The 2,441 (Monday: 1,858) price winners on the Nyse faced 627 (1,190) losers. 67 (92) shares closed unchanged.
The banking sector in the S&P 500 rose 3.6 percent. In the Dow, JP Morgan (+2.7%) and Goldman Sachs (+2.5%) made strong gains. The US Treasury Department is also said to be considering unlimited deposit guarantees in general – other sources only spoke of a significant increase in guarantees. US Secretary of the Treasury Janet Yellen said Tuesday the government could step in to protect other banks’ deposits if regulators see a risk of a run on the banking system. In any case, the reports are supportive of the stock market. “The stock market is not pricing in a full-scale banking crisis,” said market strategist Seema Shah of Principal Asset Management.
US Federal Reserve back in focus
With the reports on measures to stabilize the banking sector, the interest rate decision in the middle of the week became more of a focus. “Our own US economists (…) agree with the assessment that the Fed will opt for 25 basis points,” said market strategist Jim Reid of Deutsche Bank. The market expectation is also of one rate hike by 25 basis points, bringing market assessments back from previously higher forecasts given the turmoil in the banking sector.
Safe havens were not in demand with the increased willingness to take risks thanks to the easing in the banking sector. The sell-off in bonds continued. The 10-year yield rose another 11.4 basis points to 3.60 percent.
The dollar also fell further after a slight recovery in the meantime. The dollar index fell 0.1 percent. The main focus here was the interest rate decision by the US Federal Reserve on Wednesday evening. Interest rate expectations had recently come down significantly. “Should the Fed completely forego an increase, the stock market traders could see it more as a warning signal of a much deeper banking crisis. That’s why I suspect that the Fed will do business as usual with a further increase,” says strategist Thomas Altmann by QC Partners.
The euro, on the other hand, rose as a result of the increased appetite for risk. In retail, reference was made to the easing in the banking sector. The shared currency advanced to $1.0770 after a daily low of 1.0704. At the daily high of $ 1.0789, the currency had marked its highest level in five weeks.
The price of gold fell significantly as investors became more willing to take risks. The price of a troy ounce fell 1.9 percent to $1,940. The day before, the precious metal had climbed to its highest level since April 2022 with a daily high of $ 2,015.
With the easing in the banking sector, another financial crisis with falling demand was priced out on the oil market. By the end of the week, this concern had pushed US WTI light oil down to a 15-month low. Brent and WTI were up as much as 2.7 percent.
Business numbers of smaller companies
Exagen fell 2.1 percent. The diagnostics company slipped deeper into the red in the fourth quarter. The fact that Exagen, despite the disappointing performance, raised its outlook for the first quarter and is now more optimistic than the analysts, fizzles out.
Stanley Black & Decker was up 1.3 percent after the toolmaker announced it would be closing some manufacturing facilities. More than 300 employees are expected to be affected by the savings.
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INDEX last +/-% absolute +/-% YTD
DJIA 32,560.60 +1.0% 316.02 -1.8%
S&P 500 4,002.87 +1.3% 51.30 +4.3%
Nasdaq Comp. 11,860.11 +1.6% 184.57 +13.3%
Nasdaq-100 12,741.44 +1.4% 178.83 +16.5%
US Bonds
Term Yield Bp to VT Yield VT +/-Bp YTD
2 years 4.16 +17.1 3.99 -26.2
5 years 3.73 +14.3 3.59 -26.8
7 years 3.69 +12.0 3.57 -28.3
10 years 3.60 +11.4 3.48 -28.2
30 years 3.72 +5.3 3.67 -24.7
FOREX last +/- % Tue, 8:15 Mon, 17:55 % YTD
EUR/USD 1.0770 +0.4% 1.0714 1.0721 +0.6%
EUR/JPY 142.67 +1.2% 141.02 141.13 +1.7%
EUR/CHF 0.9934 -0.3% 0.9968 0.9932 +0.4%
EUR/GBP 0.8813 +0.9% 0.8742 0.8740 -0.4%
USD/JPY 132.47 +0.8% 131.66 131.64 +1.0%
GBP/USD 1.2219 -0.5% 1.2256 1.2267 +1.0%
USD/CNH (Offshore) 6.8785 +0.0% 6.8747 6.8767 -0.7%
Bitcoin
BTC/USD 28,172.10 +0.5% 27,463.88 27,611.86 +69.7%
CRUDE OIL last VT settlem. +/- % +/- USD % YTD
WTI/Nymex 69.50 67.64 +2.7% +1.86 -13.7%
Brent/ICE 75.26 73.79 +2.0% +1.47 -11.8%
GAS VT Settlem. +/- EUR
Dutch TTF 41.50 39.33 +5.5% +2.18 -49.1%
METALS last day before +/- % +/- USD % YTD
Gold (Spot) 1,940.02 1,978.38 -1.9% -38.36 +6.4%
Silver (Spot) 22.34 22.54 -0.9% -0.19 -6.8%
Platinum (Spot) 975.25 993.05 -1.8% -17.80 -8.7%
Copper Future 4.01 3.95 +1.4% +0.06 +5.1%
YTD relative to previous day’s close
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DJG/DJN/ros
(END) Dow Jones Newswires
March 21, 2023 16:15 ET (20:15 GMT)
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