While last week’s news that Silicon Valley Bank had collapsed sent stock markets tumbling, the US market opened on Monday with unprecedented indecision. According to MSNBC, major indices traded both below and above their average prices.
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“Delfi Business” already reported that the collapse of “Silicon Valley Bank”, which is the biggest financial scandal that the US banking sector has experienced since the severe crisis of 2008, has deeply worried financial experts and politicians. The fact that Signature Bank, a much smaller but significant bank in the world of cryptocurrencies, also collapsed did not help either.
US financial supervisors and the government, including President Joe Biden himself, have been trying since Friday to comfort investors, banks and the business sector, explaining that this is not the beginning of a new crisis.
That seems to have convinced at least some investors. Although the main indices “Dow Jones”, “S&P 500” and “NASDAQ Composite Index” fell at the beginning of the trading day of US stocks, in less than an hour they rose higher than they closed the session on Friday. The increase in the value of indices in the first hour was in the range of 0.5-1%.
However, investors are cautious about the financial sector. Bank “First National” felt it the most, whose shares fell by more than 70%, although they recovered a little during the first hour and the losses fell below 70%.
Shares of “JPMorgan Chase & Co”, “Citigroup” and other financial institutions also fell by a few percent.
“Financial markets are facing a dead end situation – caught between fears of regional bank failures and central banks worried about flat inflation,” said Barclays analyst Ajay Radjadyaksha.
However, other sectors have grown, as evidenced by the previously mentioned indices. For example, shares of “Apple” rose by 2.55% in the first hour, pharmaceutical manufacturer “Eli Lilly” by 4.55%, and “Coca-Cola” by 2.2%.
Goldman Sachs thinks the Federal Reserve will not raise rates at its meeting next week, as previously expected. Ed Hyman, an analyst at Evercore ISI, said it might be a good idea not to raise rates, which in turn could increase negative pressure on markets.
On the other hand, the price of the most popular cryptocurrency “Bitcoin” increased by 10%. Perhaps this can be explained by the concerns of some investors about the problems of the traditional financial sector.
In Europe, however, the trend of stock prices was downward. The main European stock index “European Stoxx 600” fell by 2.4%.
