Wall Street financial markets rallied on Monday

 

Wall Street financial markets rallied on Monday, following the announcement of an agreement to rescue Credit Suisse and the implementation of measures by central banks to bolster global cash flow.

This allowed investors to feel calmer, although there is still the possibility of a pause in the Fed’s rate hikes. As a result, the S&P banking index and the KBW regional banking index rose after heavy losses the previous week, when the failure of Silicon Valley Bank and Signature Bank shook markets.

According to Quincy Krosby, chief global strategist at LPL Financial, a reduction in market risk is being seen, which is helping to keep banks afloat and prevent an extension of the crisis. Among regional banks, PacWest Bancorp rose after the bank announced that deposit outflows had stabilized, while New York Community Bancorp rose after a unit of the bank agreed to buy deposits and loans from Signature Bank. According to Krosby, when another bank comes in to help, it’s news that helps shore up confidence in the banking system and helps curb panic and fear.

The S&P 500 and Nasdaq Composite closed higher, gaining 34.19 points (0.87%) and 45.09 points (0.39%) respectively. The Dow Jones Industrial Average also rose, gaining 380.95 points (1.20%). However, U.S.-listed Credit Suisse shares were down sharply, while those of UBS Group were up.

In regional banks, First Republic Bank experienced a sharp drop after its rating was downgraded by S&P Global and higher fundraising was reported that stoked concerns about the bank’s liquidity, despite a US$30 billion bailout last week. Investors are also looking ahead to this week’s Federal Reserve decision. Prior to the turmoil with banks earlier this month, many market players were counting on a 50 basis point interest rate hike by the Fed at its March meeting this week. However, on Monday, Fed funds futures were showing a 26.9% probability that the Fed will hold its overnight rate at the current 4.5%-4.75% when policymakers conclude their meeting on Wednesday, according to CME’s FedWatch tool

The market environment remains uncertain, however, this week is expected to have a better performance for Wall Street, we remain vigilant in reporting the performance of the financial markets.