Last updated: 4:05PM EST
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Stock indices finished today’s trading session mixed. The Dow Jones Industrial Average (DJIA) and the S&P 500 (SPX) fell 0.28% and 0.15%, respectively. On the other hand, the Nasdaq 100 (NDX) jumped 0.79%.
The carnage witnessed in the banking sector has many worried about the potential ripple effects throughout the entire financial system. This has caused bond yields to fall drastically over the past week as investors flee to the safety of bonds.
Indeed, the U.S. 10-Year Treasury yield decreased to 3.54%. Similarly, the Two-Year Treasury yield also decreased, as it hovers around 4.02%. This brings the spread between them to -48 basis points. For reference, this spread was over 100 basis points recently, and the Two-Year Treasury yield was hovering above 5%.
This has also caused investors to actually start pricing in the possibility of a rate cut from the Federal Reserve as early as June 2023, with the market assigning a 31.1% chance of Fed Funds rate in the range of 4.25% to 4.5%.
In addition, the market is now also assigning a 42.2% probability to a range of 4.5% to 4.75%. For reference, investors had assigned a 0% chance Friday.
Last updated: 2:30PM EST
Stocks resumed their rally heading into the final 90 minutes of today’s trading session after temporarily pulling back. As of 2:30 p.m. EST, the Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) are up 0.6%, 0.8%, and 1.9%, respectively.
Last updated: 12:54PM EST
The stock rally lost its steam as indices trend towards the flatline. As of 12:54 p.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 0.1%, 0.2%, and 1.2%, respectively.
Last updated: 12:14PM EST
Stocks continue to rally halfway through today’s trading session after starting the day in the red. As of 12:14 p.m. EST, the Dow Jones Industrial Average (DJIA), the S&P 500 (SPX), and the Nasdaq 100 (NDX) are up 0.8%, 0.9%, and 1.8%, respectively.
Last updated: 10:00AM EST
Stocks erased early losses and moved to positive territory to start the week as the fallout of the SVB collapse left markets jittery even after the U.S. Government’s intervention.
The Nasdaq 100 (NDX) and S&P 500 (SPX) are up by 0.1% and 0.05% respectively, while the Dow Jones Industrial Average (DJIA) is up 0.3% at 10:00 a.m. EST, March 13.
First published:6:34AM EST
U.S. futures were highly volatile Monday morning, following the joint statement from the Treasury Department, the Federal Reserve, and the FDIC. After having a brief meeting during the weekend, the trio decided to backstop all of SVB Financial’s depositors and financial institutions, thus sparking confidence in the market. Moreover, the Federal Reserve also announced the launch of a new Bank Term Funding Program (BTFP) that will give loans of up to one year to banks and other financial institutions under its realm, thus boosting depositor safety.
Futures on the Nasdaq 100 (NDX) and S&P 500 (SPX) are up 0.60% and 0.14%, respectively, while the Dow Jones Industrial Average (DJIA) is down 0.12% at 5:15 a.m. EST, March 13.
Importantly, all eyes are on how Silicon Valley Bank’s collapse will shape the Fed’s interest rate decision. If the Fed contemplates that more banks could face similar troubles in the near term, it could compel the lawmakers to ease their hawkish stance. New York-based cryptocurrency lender Signature Bank also shut down on Sunday, following SVB’s debacle. Moreover, San Francisco-based First Republic Bank (NYSE:FRC) is facing a run on its deposits and could be forced to shut down operations soon.
This week, investors also await important economic data, including January’s consumer price index (CPI) and producer price index (PPI) numbers on March 14 and 15, respectively. The CPI will be an important inflationary metric for the Fed as it decides its future course of monetary policy. Further, the retail sales data and the consumer sentiment figures will be reported later this week.
Meanwhile, European indices nosedived on Monday morning, on worries about U.S. banks’ financial health and the possibility of a bigger systemic risk. At the same time, Britain’s HSBC Holdings (GB:HSBA) decided to buy out SVB’s U.K. operations for roughly $1.21 and assume all the deposits, thereby safeguarding the bank’s U.K. depositors.
Asia-Pacific Markets End Mixed
Asia-Pacific markets ended the trading session mixed on account of U.S. banks’ financial woes. Hong Kong’s Hang Seng, China’s Shanghai Composite, and Shenzhen Component indices ended the day in the green, up 1.95%, 1.20%, and 0.62%, respectively.
On the other hand, Japan’s Nikkei and Topix indices ended the day down 1.11% and 1.51%, respectively, dragged down by financial stocks.
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