Today’s Stock Exchanges, May 3rd. Markets waiting for rate hikes. US regional banks at lowest since 2020
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Today it’s the Fed’s turn, tomorrow the ECB. Markets are looking to central banks and their rate hikes. Mirror moves of +25 basis points are expected, even if the Frankfurt hawks are pressing for something more. The US is also agitated by other problems: yesterday the shares closed in the red due to the drop in the price of petrolium – worried about the global economic conditions – then weighed down by the difficulties of regional banks (whose shares closed at their lowest since 2020 after the bankruptcy of First Republic) and the question of the federal debt ceiling which must be raised by the end of the month to avoid more drastic measures. Further elements of uncertainty on the investors’ table which also reverberated on Asian exchanges.
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US regional banks in the crosshairs: double-digit losses
Weak futures for Europe, Wall Street tries to recover
On Wall Street, futures are trying to rebound and advance, after yesterday the three New York indices closed in deep red due to the collapse in oil prices, fears about the banking crisis and the possible raising of the US debt ceiling by on June 1st. The Fed’s rate verdict is expected tonight. Dow Jones futures are up 0.17%, S&P 500 futures are up 0.15%, while Nasdaq futures are flat.
On the other hand, a weak and mixed start is expected for the European stock exchanges: futures on the EuroStoxx 50 are flat, while those on the Frankfurt Dax increase by 0.11% and those on the London FTSE 100 index decrease by 0.02%.
Oil prices still weak
Oil prices open weak and mixed across Asian markets, with Brent and WTI trading at their lowest levels in five weeks amid fears that impending interest rate hikes and mounting recession risks could weigh on global demand for power. There is anticipation for the Fed’s monetary policy decision tonight. Wti drops 0.14% to 71.56 dollars a barrel, Brent advances by 0.17% to 75.45 dollars.
US regional banks in the crosshairs: double-digit losses
Shares in regional banks such as PacWest Bancorp and Western Alliance Bancorp prompted a selloff in the US institutional sector, which seemed heartened after JPMorgan’s bailout of First Republic. On Tuesday evening, however, the fear that there could be knock-on effects emerged again, after the second bankruptcy in US banking history: in the end, after many suspensions, PacWest lost 28% to close at an all-time low while Western Alliance left the field the 15%. Both have lost over 5 billion in capitalization this year.
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