The stock market struggled to maintain the sell-off lows in early midday Wednesday. Treasury yields have fallen yet Credit Suisse (C.S) Stocks fell in the last chapter of the banking crisis.
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The S&P 500 tumbled more than 1.5% but still traded above Monday’s low. It’s nearly erased its year-to-date gains, dropping to less than 1%.
The Nasdaq Composite, which has a modest 4% exposure to the financial statementstrimming its loss to 0.9% as the sale spread to technology, healthcare and almost every S&P sector except utilities.
Financials were hit by the Dow Jones Industrial Average again, as the massive index fell 1.8%. The Russell 2000 Index led the decline, losing 2.7%.
Trading volume on the New York Stock Exchange and Nasdaq increased compared to the same time on Tuesday.
The yield on the 10-year Treasury note lost 23 basis points, to 3.41%. Investor fear as measured by Cboe market volatility indexor VIX, rose 18% to 28.
Oil drops below $70, reels sector
As fears of a global recession grew, US crude oil fell 6.7% to below $66.50 a barrel at noon. SPDR power strip selection (xleThe weakest sector was ETFs, down 4.6%.
Since December, the price of US crude has hovered between $70 and $80 per barrel.
However, the ETF is showing weaker activity. This week, the energy pick sector fell below the 200-day moving average, and the chart shows a pattern of lower tops and lower bottoms since late January.
No clear support level until maybe 68, as the ETF bottomed out in September.
Among the deteriorating oil stocks, oilfield service providers Tide water (TDW), slb (slb) And Halliburton (Hal) decompose. outbreak to International sea lanes (INSW) seems to fail.
But in a research note today, Wells Fargo sounded bullish on oil prices.
“Overall, despite the expected recession, we believe that supply shortages, China reopening, and bullish commodity cycle effects will be supportive of higher oil prices, likely in the latter half of 2023,” strategists John LaForge and Mason Mendez wrote in a report. .
European stock market: Credit Suisse revives contagion fears
The banking crisis took a turn for the worse overnight. The Chairman of the Board of Directors of the National Bank of Saudi Arabia, the largest shareholder of Credit Suisse, refused to provide additional financial assistance. On Tuesday, Credit Suisse released its delayed annual report, which warned of “material weaknesses” in its financial controls.
Board Chairman Axel Lehmann said on Wednesday that the capital and balance sheet remain strong. The Zurich-based bank was dealing with it Multiple problems for months. Its US-traded shares were down 22% at noon to 1.95, and they’ve been under $10 a share for more than a year.
European stock markets fell. The Paris CAC 40 fell 3% while the FTSE 100 in London fell 3.1% and the German DAX lost 2.6%. Major Asian markets avoided the bad news and closed higher.
Regional bank stocks remain under pressure, as depositors seek safer places to put their money. SPDR S&P Regional Bank ETF (KRE) pared its loss to 1.2%.
Banks decline widely in the stock market today
Among the major US banks, c. B. Morgan Chase (JPM) fell 4.7%. Wells Fargo (WFC) lost 4.5%, American bank (Buck) 1.5%, Bank of New York Mellon (BK) 3.9% f Citigroup (c) 5%.
SPDR S&P Bank ETF (KBE) is down 2% and down 10% for the week.
The Innovator IBD 50 ETF (fifty), which is not exposed to financial issues, still lost 3.1%. Two components seem to be in trouble.
Supplier of industrial and electronic parts Wesco International (World Council of Churches) is below the 50-day moving average, wiping out a gain of about 20% from its buy point of 147.15. This is a sell signal.
Hyatt hotels (h) is down 4.5% and is trading below the 50-day moving average. It gave up gains from a buy point of 108.20 and returned near the entry level of 103.60.
Stock Market Today: Slowing Inflation Data
Credit Suisse’s troubles overshadowed the encouraging inflation report.
February’s Producer Price Index (PPI) decreased by 0.1% from the previous month and increased by 4.6% year-on-year. Both fell short of economists’ expectations. Core wholesale prices, which exclude food and energy, also fell more than expected, flat month-over-month and up 4.4% year-on-year.
But in a state of damping, US retail sales fell 0.4%. in feb. Economists had expected a 0.3% month-on-month decline. Sales excluding automobiles fell 0.1%. Estimates of a 0.2% increase.
The latest data supports the case for the Fed to pause interest rate hikes.
“While the market is under pressure this morning due to continued releases by Credit Suisse, specific inflation-related news should help reassure the Fed that its inflation suppression campaign is moving in the right direction,” said Quincy Crosby, chief global strategist at LBL Financial. ..
Crosby added that a slowdown in retail spending is “a necessary component of bringing inflation closer to the Fed’s final interest rate.” Together, the data should boost the odds of a 25 basis point rate hike next week, if the Fed raises at all.
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