Deutsche Bank is the latest international bank to tumble
Stocks rose Friday after a volatile trading session. Although Friday began with fears that the banking crisis was spilling over to Deutsche Bank, the markets rebounded to end the week on a higher note.
The Dow Jones Industrial Average gained 132.28 points, or 0.41 per cent, closing at 32,237.53. The S&P 500 rose 0.56 per cent, while Nasdaq Composite ticked up 0.3 per cent. The major indexes all had a winning week, with the Dow gaining 0.4 per cent week-to-date as of Friday afternoon, while the S&P 500 and Nasdaq gained 1.4 per cent and 1.6 per cent, respectively.
One factor that helped the market was a bounce back in regional bank stocks. The sector rallied on Friday, with the SPDR S&P Regional Banking ETF gaining 3.01 per cent during the trading session. Amid all the volatility, the KRE ended the week up 0.18 per cent.
A selloff of Deutsche Bank’s US-listed shares Friday morning put downward pressure on market sentiment and the major indexes, before the bank recovered some of its earlier losses.
A selloff of shares was triggered after the the German lender’s credit default swaps jumped, but without an apparent catalyst. The move appeared to raise concerns once again over the health of the European banking industry.
However, many analysts were left scratching their heads as to why the bank, which has posted 10 consecutive quarters of profit and boasts strong capital and solvency positions, Deutsche Bank closed 3.11 per cent lower Friday, rebounding from a 7 per cent drop earlier in the trading session.
European Central Bank President Christine Lagarde tried to ease concerns, saying Eurozone banks are resilient with strong capital and liquidity positions. Lagarde said the ECB could provide liquidity if needed.
Investors have been flocking to gold and Treasurys as bank stocks have been whacked by the shuttering of Silicon Valley Bank and Credit Suisse’s implosion.
Gold has risen around 10 per cent since early March when SVB was hit by a bank run. Investors are closely watching the Federal Reserve’s next moves and their impact on gold prices.
In other commodity news all eyes are on the copper price which has been the best performing commodity this year. Goldman Sachs expects the world to run out of visible copper inventories by the third quarter of this year if demand in China continues to power ahead as strongly as it did in February.
Metals analysts said that demand for copper had accelerated and been pushed higher by clean energy industrial policies in the US and Europe that rely on electrification
Sector wise interest rate sensitive sectors were the best performers on Friday in the expectations that rate rises may be over for the time being. Utilities, Real Estate and Consumer staples were the best perfomers on the S&P500 on Friday.
The SPI futures are pointing to a 0.04 per cent fall.
One Australian dollar at 7:20 AM is buying 66.52 US cents..
Iron ore futures are pointing to a 0.3 per cent gain.
Gold lost 0.6 per cent. Silver added 0.4 per cent. Copper lost 1.2 per cent and oil fell 1 per cent.
Figures around the globe
Across the Atlantic, European markets closed lower. London’s FTSE fell 1.3 per cent, Frankfurt lost 1.7 per cent while Paris closed 1.7 per cent lower.
In Asian markets, Tokyo’s Nikkei lost 0.1 per cent, Hong Kong’s Hang Seng fell 0.7 per cent while China’s Shanghai Composite closed 0.6 per cent lower.
On Friday, the Australian sharemarket closed 0.2 per cent lower at 6955.
Au Clinical Labs (ASX:ACL) is paying 7 cents fully franked
Cyclopharm (ASX:CYC) is paying 0.5 cents unfranked
Lycopodium (ASX:LYL) is paying 36 cents fully franked
Naos Emerging Opportunities Company (ASX:NCC) is paying 3.75 cents 50 per cent franked
Perpetual Equity(ASX:PIC) is paying 3.3 cents fully franked
Breville Group (ASX:BRG)
Gold Road Resources (ASX:GOR)
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
The views, opinions or recommendations of the commentators in this presentation are solely those of the author and do not in any way reflect the views, opinions, recommendations, of Sequoia Financial Group Limited ABN 90 091 744 884 and its related bodies corporate (“SEQ”). SEQ makes no representation or warranty with respect to the accuracy, completeness or currency of the content. Any prices published are accurate subject to the time of filming and shouldn’t be relied upon to make a financial decision. Commentators may hold positions in stocks mentioned and companies may pay FNN to produce the content at times. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian Financial Services Licensee before making investment decisions. To the extent permitted by law, SEQ excludes all liability for any loss or damage arising in any way including by way of negligence.
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