The collapse of SVB Financial in the US continues to make waves. After all, it is the 16th largest bank in the USA. And that’s saying something in a country that is still considered “overbanked”. This crisis will also clearly overshadow the new stock market week, with the proverbial ball now in the field of politics and the central bank.
Two key questions need to be clarified: What will happen to customer deposits and how will the US Federal Reserve react to them? We have already received an answer to the first topic. Because the American banking regulator said at the weekend that they wanted to ensure that all customers had access to their deposits. The seriousness of the situation is shown by the fact that the Ministry of Finance classified both the SVB and the crypto bank Signature Bank, which in turn had announced the cessation of business operations, as systemic risks.
SVB bankruptcy as a systemic crisis?
By announcing that deposit funds would be secured, the authorities are of course trying to stem the spread of fears of a new banking crisis in the US. Whether this succeeds will also be shown by the further actions of the US Federal Reserve.
This has announced that an emergency meeting of the Board of Governors will be convened this Monday. According to its own announcement, it should primarily be about the advance and discount rates. It is quite possible that there are announcements of appropriate measures to provide banks with cheaper money in the short term than would be possible given the current interest rate level. Added to this is the discussion about setting up a fund to protect deposits at banks that have run into problems as a result of the collapse of the SVB.
In short: Even if the collapse of the SVB is still to be regarded as an economically singular event, the supervisory authorities and the central bank naturally fear that a general crisis of confidence in the banking system could develop as a result. The bitter experience of the financial crisis should ensure that action is taken more quickly than it was then.
business cycle dates
Against this background, the economic data that is supposed to be available this week will of course be of secondary importance. Nevertheless, to complete the outlook in this regard: While nothing is expected in Germany this week, in Europe the focus should be mainly on Thursday. Because that is when the ECB council meeting is held, although the expectation in the market is still valid that the euro currency guardians will raise the key interest rate from the previous 3% to 3.50%.
In view of the new situation in the financial system, however, there are already voices speculating that the ECB may take a smaller step or even leave the interest rate at the previous level. The question, of course, is how such moves would ultimately be interpreted.
In addition, the list of economic data in the United States this week is very extensive. That starts on Tuesday with fresh inflation data. Year-on-year inflation is expected to fall from 6.4% to 6.0% in February. Producer prices will continue on Wednesday. Here, too, declining figures are expected in a year-to-year comparison, which could also be clearer in a month-on-month comparison than it could be for consumer prices. Added to this are retail sales. Here, too, a slowdown is expected, which could certainly raise hopes in the market that the Fed might not be quite as aggressive in this regard. This also applies to figures from the real estate market.
corporate appointments
The schedule for company reports for the past quarter or fiscal year 2022 has now been significantly thinned out. However, there are still a few dates that you should definitely pay attention to, although many companies have already provided preliminary figures. However, as we’ve seen over the past few weeks, even the final numbers can always nudge stocks in one direction or another.
Already this Monday the Porsche AG to the analyst and investor conference to present the figures for the past financial year. Given that the AG has only recently been listed on the stock exchange, this should certainly be an interesting event.
Delivers on Tuesday man and machinee the final numbers. The specialist for CAD/CAM/BIM software had already reported preliminary figures at the beginning of February, which were at the upper end of the previously increased forecast. We expect that this number will of course be confirmed. In this regard, it should be exciting again what has been planned for this year.
The heavyweights like BMW, Lanxess, E.ON and K+S, all of which are due to present their final figures for the past fiscal year and fourth quarter on Wednesday. While BMW is expecting a significant increase in profit and sales, the figures for the other three stocks could ultimately be more of a disappointment. Because here, a decline in earnings at the level of earnings per share is to be expected.
And one more value should be in focus. Because the new DAX member Rheinmetall will also present figures. The Friday before last, Deutsche Börse decided that the armaments group should move into the DAX from March 20th. Fresenius Medical Care has to give way. With the beginning of the Ukraine war, the armaments group not only saw a significant upswing in its shares, but also in its business. Therefore, the analysts are also expecting significant improvements in sales and, above all, in profitability.
But not only German values are still announced, but of course there are also some latecomers in America. However, in the meantime it is all more or less second and third and fourth row. From our point of view and for the market as a whole, the numbers of the house construction company should certainly be interesting again Lennar to be published on Wednesday. The market is currently assuming both a decline in sales and profits.
The figures from Adobe should also be interesting. They are also announced for Wednesday. The analysts are currently expecting an increase in earnings per share from $3.37 in the same period last year to $3.68. That would certainly be an important signal for the software provider, after disappointments have been the norm in the past few quarters.
