All articles tagged with #banking stocks
Banking stocks declined despite increased hiring and a potential surge in M&A activity, as Wall Street banks actively recruited senior executives to capitalize on improving economic conditions and a more favorable M&A environment, though market uncertainty earlier in the year had initially dampened activity.
European shares declined due to losses in banking and mining sectors amid ongoing trade negotiations between the U.S. and its trading partners, with focus on upcoming tariff decisions and trade deal negotiations, while some sectors like healthcare and luxury goods showed resilience.
Warren Buffett's Berkshire Hathaway has increased its holdings in US Treasuries to over $305 billion, making it a major holder of government debt, while simultaneously reducing its stakes in Citigroup, Bank of America, and Capital One, signaling a shift towards safer assets amid changing investment strategies.
Banking stocks, including Bank of America and JPMorgan, experienced a broad decline as investors grew uncertain about the economy and lacked positive catalysts. The Financial Select Sector SPDR ETF dropped to a seven-month low, while the SPDR S&P Bank ETF and SPDR S&P Regional Banking ETF also sank. JPMorgan analyst Vivek Juneja advised investors to stay on the sidelines due to economic uncertainty and the impact of higher interest rates. Commercial loans are weak, capital-markets issuance has slowed, and the economic outlook is muddied by the upcoming election year. Bank stocks are also facing challenges from smaller loan pipelines and higher fraud costs.
The S&P 500 is indicating an oncoming recession, according to economist David Rosenberg, who pointed to a slump in consumer discretionary, transportation and banking stocks as evidence. Despite the benchmark index rising 7.7% this year, Rosenberg said the most economically sensitive areas are down 33%, behaving as they did heading into previous downturns. Rosenberg recently predicted a recession has already hit US corporate profits, while markets guru Larry McDonald warned of a 30% crash in the S&P 500 by December due to dwindling corporate profits, less government spending and banking stress.
Turkish assets fell again as President Erdogan's strong showing in the recent election raised investor expectations that he could extend his rule and unorthodox economic policies into a third decade. Banking stocks and sovereign dollar bonds slid for a second day, and the cost of insuring exposure to Turkish debt rose further. The lira set yet another record closing low, and longer-dated, dollar-denominated government bonds had the biggest falls in fixed-income markets. Credit ratings agency Fitch said the political and economic uncertainty would continue at least until after the runoff, and that its focus regarding Turkey's "B"/Negative sovereign rating after the election would be whether the policy mix "becomes more credible and consistent."
First Republic Bank's stock rose 12% in Monday trading, rebounding from a 90% plunge since March due to concerns over deposit withdrawals and declining asset values. The KBW Nasdaq Bank Index and Financial Select Sector SPDR ETF also rose on Monday. US regulators are considering expanding an emergency lending facility for banks, potentially giving First Republic Bank more time to shore up its balance sheet. Deposit outflows were not as bad as feared, according to Federal Reserve data released on Friday.
Europe's banking stocks have recovered as Silicon Valley Bank's acquisition of Wirecard Bank's customer portfolio brought some respite. Meanwhile, a new report suggests that social media platforms could help regulators get ahead of bank failures by monitoring customer complaints and identifying potential issues before they escalate.
First Republic Bank shares rebounded along with other banking stocks after a prior day's loss caused by Treasury Secretary Janet Yellen's comments that dashed speculation of a massive extension to the deposit insurance program. The rebound for the California-based company, however, pales in comparison with the 89% loss this year through Wednesday's close, which erased nearly $20 billion from its market capitalization. Wall Street lenders and US officials are looking at the possibility of government backing to encourage a deal that would shore up First Republic.
Japan's Topix Banks Index fell as much as 6.4% on Thursday due to fears of banking turmoil spreading around the world after Credit Suisse's troubles. South Korea's Shinhan Financial Group and KB Financial Group also declined. The Swiss central bank offered financial support to Credit Suisse, which borrowed up to 50 billion Swiss Francs ($53.7 billion) to strengthen its liquidity. Banking shares were hammered in Europe and New York on Wednesday after Credit Suisse's shares fell as much as 30%.
European markets were down with banking stocks leading the losses due to the global Silicon Valley Bank fallout. Credit Suisse, Societe Generale, and several Italian bank stocks were halted from trade due to steep losses. BMW lifted its margin forecast and expects higher deliveries as it ramps up electric rollout. China's industrial output and retail sales rose in the January to February period. Moody's cut its outlook to negative on the US banking system citing a "rapidly deteriorating operating environment."