April 23, 2024

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From the sudden collapse of the SVB to the fallout from Credit Suisse: the eight charts show the turmoil in the financial markets

From the sudden collapse of the SVB to the fallout from Credit Suisse: the eight charts show the turmoil in the financial markets

A turbulent week in US financial markets ended on an uncertain note on Friday after a massive $30 billion infusion of big bank deposits into First Republic Bank failed to calm investors.

Last week, the sudden collapse of three US banks – Silvergate Capital, Signature Bank

SBNY

and Silicon Valley Bank – they are beginning to revive concerns about weakness in the banking sector amid a sharp rise in interest rates.

SVB Financial Group

SIVB

On Friday, she filed for Chapter 11 bankruptcy and said she will seek a court-supervised reorganization. A Silicon Valley bank has been placed in federal receivership after running out of its deposits.

Within days, regional banks and other financial firms were hit with the sell-off.

First Republic Bank

FRC

And
Another medium-sized California bank saw its share price drop to a record low on the day this week, before the bank received a promise of $30 billion in deposits from a group of some of the country’s largest banks including JPMorgan Chase.

JPM

And
American bank

Buck

And
Wells Fargo

WFC

And City Group

c

.

In Europe, shares of the Swiss banking giant Credit Suisse

C.S

It fell to about $2 a share in New York trading. The bank said Thursday that it intends to borrow up to 50 billion Swiss francs ($54 billion) from the Swiss National Bank to boost liquidity. Shares of the bank in New York were down 33.9% year over year through Friday.

Here is a look at the big swings across the financial markets in the past week or so.

Shares in the SPDR S&P Regional Banking ETF

KRE

And

Covering the regional banking sector of the broader S&P 500 index, it has fallen 24.5% in the past seven trading days since March 9, the day after SVB announced it sold a portfolio of securities at a loss of more than $1 billion. Depositors began fleeing, and the bank was closed by regulators on March 10.

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The Treasury Department, the FDIC and the Federal Reserve on Sunday announced guarantees for all deposits at Silicon Valley Bank and Signature Bank to boost confidence in the banking sector.

Shares of the SPDR S&P Regional Banking ETF fell 6% on Friday. Shares of First Republic Bank fell 32.8%, after an influx of $30 billion in deposits failed to calm jittery investors.

The sell-off in bank stocks sent the broader stock market lower, leaving the S&P 500 index

SPX

With a decline of 2.1% since March 9, briefly erasing the gains of the large cap index in early 2023.

The S&P 500 ended 1.1% lower on Friday, but is up 1.4% for the week, according to market data from Dow Jones. It was up 2% for the year as of Friday.

Nasdaq Composite Index

COMP

The Dow Jones Industrial Average outperformed by 4.45 percentage points this week, its biggest weekly performance since March 20, 2020, according to market data from Dow Jones.

The jump in the biggest technology and semiconductor names helped limit losses in the Nasdaq 100 Index, which tracks the top 100 technology companies on the Nasdaq stock exchange.

Nasdaq Composite Index

COMP

Friday ended lower, but posted a weekly gain of 4.4%, while the Dow Jones Industrial Average

DJIA

It was down 0.2% for the week.

be seen: Microsoft, Apple and the Meta are outperforming as investors seek safety in stocks of big tech companies

The bond market also had a week of extremes. The yield on two-year Treasury notes

TMUBMUSD02Y

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It fell 74 basis points, the largest weekly decline since October 1987, a period marked by the Black Monday stock market crash, according to market data from Dow Jones.

be seen: Why bond market volatility is at its highest level since the 2008 financial crisis amid rolling repercussions from banks

In addition to its volatility, the February CPI report showed little progress in quelling soaring inflation, which failed to ease ahead of the weekend. The policy-sensitive two-year Treasury yield fell 28.4 basis points to 3.846% on Friday. This was the lowest level since September 14, 2022.

Trading in the Fed futures market has also been volatile, with odds on Friday showing a 40% chance the Fed will not hike at next week’s meeting and a 60% chance that policymakers will raise rates by another 25 basis points into a range. from 4.75% -5%, according to CME FedWatch tool.

Gold prices rose 8.1% in the past seven trading days, finishing at an 11-month high on Friday and posting its best weekly gain in nearly three years, according to market data from Dow Jones. Fears of possible further stress in the banking sector weighed on investor sentiment, boosting the yellow metal’s appeal as a safe haven.

Gold futures contracts for April delivery

GC00

GCJ23

It gained $50.50, or 2.6%, to settle at $1,973.50 a troy ounce on Comex on Friday, with the most active contracts up 5.7% for the week. This was the yellow metal’s highest settlement since April 18, 2022 and its largest weekly advance since April 2020, according to market data from Dow Jones.

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ICE US Dollar Index

DXY

And
It is a measure of the dollar’s strength against a basket of rival currencies, which has fallen by 1.5% since last Thursday. The dollar is also closely tracking moves in the two-year yield.

The dollar index rebounded on Wednesday morning as Credit Suisse liquidity concerns revived concerns about risks in the global banking system, prompting safe-haven buying in the greenback.

Oil futures fell, with the most active US contract ending at a 15-month low and posting its biggest weekly decline in nine months, according to market data from Dow Jones.

US benchmark WTI for April delivery

CL00

CL.1

CLJ 23

It fell $1.61, or 2.4%, to settle at $66.74 a barrel on the New York Mercantile Exchange, leaving the contract with a weekly loss of 13%, according to Dow Jones market data.

The contract has fallen 14.2% in the past seven trading sessions, according to Dow Jones market data.

Bitcoin price took a big hit last Wednesday when Silvergate Capital Corp.

SI

Crypto-friendly Bank Silvergate said it would wind down operations and liquidate it with the aim of returning all deposits.

However, after the failure of SVB and Signature Bank, bitcoin is up more than 20% in the past nine sessions, to trade at $26,750.50 on Friday, according to CoinDesk data.

Bitcoin has long been viewed with suspicion by the financial establishment, but its proponents have argued that it represents an alternative to the traditional banking system.

be seen: What happened to Silvergate Capital? And why is this important?