Today’s Stock Exchanges, March 15th. Lists looking for stability. Svb crisis, the Fed evaluates stricter rules on banks
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Price lists looking for stability after the Black Monday which stunned European banks above all, due to the long wave of the failure of Silicon Valley Bank and Signature in the United States. Yesterday there was an important – albeit partial – recovery of the indices and today the futures indicate calm at the reopening. Attention is now focused on the reaction of central banks to the American crisis: tomorrow it’s the turn of the BCE, which should confirm the 50 basis point rise in the cost of money despite the new concerns. In the US, meanwhile, the Wall Street Journal bounces the idea that the Fed is rethinking a series of its own rules relating to medium-sized banks following the collapse of Silicon Valley Bank and Signature Bank, potentially extending the restrictions that are currently they apply only to the largest firms on Wall Street. A series of tougher capital and liquidity requirements are under review, as well as measures to strengthen the annual “stress tests” that assess banks’ ability to weather a hypothetical recession. The rules could affect institutions with assets between $100 and $250 billion, which currently escape some of the more stringent requirements. The Fed and other bank regulators had imposed many new rules on banks in response to the latest financial crisis. However, lawmakers in 2018 (the Trump administration) reversed some of them by raising the threshold so that the more onerous standards applied to companies with more than $250 billion in assets.
China, sales and investments rise in the first two months of the year
China’s economic activity shows signs of recovery in the first two months of 2023 after the end of the anti-Covid restrictions: retail sales rise by 3.5% per year, in line with expectations and more than -1.8% in December, while investments in fixed assets grew by 5.5% (to 5,360 billion yuan, about 800 billion dollars), more than the 4.4% expected and after 5.1% for the whole of 2022. Industrial production it rises by 2.4% (expectations were at +2.6%), but accelerates on the +1.3% of December. Urban unemployment worsens, to the highest since November: 5.6% in February from 5.5% in January, with the 16-24 age group steady at 18%.
Asian stocks overcome Svb crisis
Asian stock exchanges overcome fears of possible contagion after the Silicon Valley Bank affair and close the session higher. Attention remains high for the next moves of the central banks also in the light of the inflation data in the United States. The futures of the main European and US lists are positive. Little move Tokyo (+0.03%). On the foreign exchange market, the yen appreciates slightly against the dollar to a level of 134.60, while recovering ground against the euro to 144.50. Hong Kong (+1.3%) and Seoul (+1.3%) are still in negotiations. Shanghai (+0.6%), Shenzhen (+0.2%) and Mumbai (+0.3%) also did well. On the macroeconomic front, the German wholesale price index, French inflation and Eurozone production are on the way. US retail sales, producer price index and weekly change in oil inventories (EIA) are expected.
Flat closing for Tokyo
Flat closure for the Tokyo Stock Exchange. Concerns about the US banking sector have eased and investors’ attention has returned to inflation. The benchmark Nikkei 225 index rose 0.03% to 27,229.48, while the Topix closed up 0.65% to 1,960.12.
Svb, Bank of America is the winner of the crisis: 15 billion in new deposits
The Silicon Valley Bank crisis and fear for regional banks have created a flow of deposits towards the major institutions, those supervised by stricter rules and therefore considered safer in the face of the Svb crash. The winner, from the story, seems to be BofA which according to Bloomberg reports saw an inflow of 15 billion dollars in the few days of the Svb bankruptcy. JpMorgan, Citi and Wells Fargo also received deposits from new clients, although the numbers are still unclear.
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