Wall Street closed the week with increases of more than 1% in its main indicators despite concerns about the banking sector and the echoes of the financial crisis, focusing more on the messages and actions of US financial and monetary policy makers.
The Dow Jones Industrials, which fell slightly last week, accumulates this time a rise of 1.18%; while the selective S&P 500 and the Nasdaq index chain gains of 1.39% and 1.66%, respectively.
The market has focused on the 25 basis point interest rate hike announced on Wednesday by the Federal Reserve and on expectations from its chairman, Jerome Powell, of tighter credit conditions that are expected to weigh on the economy and inflation. .
In the last two weeks, these conditions have been affected by the bankruptcy of the US banks Silicon Valley Bank (SVB) and Signature Bank, whose financial situation worsened because of the monetary policy of the organization, and the multi-million dollar rescue of the big banks to First Republic Bank.
The panic also crossed the Atlantic and almost finished with the Swiss bank Credit Suisse, which finally had to be acquired last weekend by its competitor UBS after the crisis of confidence that was sinking its price in the market.
This Friday new shocks came from Europe due to the stock market fall of the German Deutsche Bank after announcing that it plans to amortize 1,500 million dollars of subordinated debt on May 24, before its maturity in 2028, but the effect on Wall Street was limited.
Powell said the banking system is “strong and resilient” but acknowledged that credit conditions have tightened more than it seems and that could have effects similar to those of interest rate hikes, so analysts believe that in May there could be a pause in those increases.
The insistence of Treasury Secretary Janet Yellen on Thursday that regulators are prepared to take more measures if the banking system needs stability was also influential, adding to messages of calm from the president of the European Central Bank (ECB). ), Christine Lagarde.
The weekly balance in the most followed titles in the banking sector, however, is still in the red: the KBW sub-index of banks, within the Nasdaq, falls a slight 0.53%, and the KRE of regional banks, within the S&P, falls 2.61%.
First Republic has cut 46% in the last five days, while among the large banks, the weekly falls of Citigroup (-2.6%) and Bank of America (-2.44%) stand out.
With information from EFE / Photo: File / JAC
