(New York) Western stock markets accelerated on Wednesday, less and less concerned about the upheavals of the financial system, to the point of seeking banking stocks, which ended up sharply.
Paris (+1.39%) and Frankfurt (+1.23%) finished at their highest since March 10, a session which marked the start of the crisis of confidence for banks in Europe. Milan (+1.56%) and London (+1.07%) also progressed significantly, without reaching this threshold.
In New York, the Dow Jones gained 1.00%, the NASDAQ index rose 1.79% and the broader S&P 500 index gained 1.42%.
The VIX index, known as the “fear index”, which measures market volatility, fell on Wednesday to its lowest level since March 9, the day before the takeover of Silicon Valley Bank (SVB) by the US regulators.
The stabilization of bond yields has also helped put equities back on track, added Art Hogan of B. Riley Wealth Management.
The yield on 10-year US government bonds was unchanged at 3.56%, which had not happened for three weeks.
For Peter Cardillo, of Spartan Capital, the fact that the S&P 500 index managed to stay above 4,000 points at the close is an encouraging sign, because “it’s a psychological threshold”.
“The banking crisis is taking a bit of a back seat and investors are starting to buy what has been leaked in recent weeks,” said Art Hogan.
But this relative calm could push the central banks to reconsider their more flexible position of the last few days and resume the fight against inflation.
If “the financial stress” on the banking sector “still proves to be relatively limited, interest rates will still have to rise”, assured the chief economist of the European Central Bank Philip Lane during an interview with the German weekly Die Zeit.
The ECB’s “reference scenario” is based on an easing of tensions, he added.
Banks are on the rise again
The first Swiss bank UBS announced Wednesday morning to recall its former managing director Sergio Ermotti to lead the merger with Credit Suisse. Share prices for the two companies rose 3.72% and 4.03% respectively.
This upward trend was reflected on the side of the Italian Monte dei Paschi di Siena (+4.91%), the Spanish Santander (+1.53%), the French Societe Generale (+1.93%) and BNP Paribas (+2.69%), as well as Germany’s Deutsche Bank (+2.65%). The banking portion of the European Stoxx 600 index gained 1.93%.
In the United States, First Republic, presented a little too quickly as the new weak link in the American banking sector, was sought after (+5.63%), as were other regional establishments such as Texan Comerica (+4.56 %) or the Californian PacWest (+5.06%).
Ironically, shares of SVB – which were allowed to resume trading over-the-counter (without continued trading) on Tuesday – were highly prized, jumping 142.50%, but to just 97 cents apiece.
Leading semiconductors
In Europe, chipmaker Infineon (+6.75%) is expecting an excellent second quarter of its staggered fiscal year, thanks to its performance in the automotive industry, and has therefore raised its annual targets.
It brought in its wake STMicroelectronics in Paris (+6.40%) and ASML (+3.08%) in Amsterdam.
On Wall Street, it was positive comments from semiconductor manufacturer Micron (+7.19%) that benefited the sector.
The group from Boise (Idaho) said it was cautiously optimistic about a rebalancing between supply and demand in the coming months, after a sharp deceleration in orders since the end of 2022.
These forecasts carried several of its competitors, whether Intel (+7.61%) or Qualcomm (+3.09%).
On the side of currencies, oil and bitcoin
Oil prices fell on Wednesday, hurt by profit-taking and refinery shutdowns in France, which overshadowed good news from US demand.
The price of a barrel of Brent from the North Sea for delivery in May fell 0.47%, to close at 78.28 dollars.
The barrel of American West Texas Intermediate (WTI), with maturity the same month, fell 0.31% to 72.97 dollars.
As for the currencies, the euro was almost at equilibrium against the dollar, at 1.0844 dollars for one euro, against 1.0845 the day before.
Bitcoin gained 3.96% to $28,387.