NYSE Dow Jones finished today at:

[bigdog]

ASX 200 expected to storm higher​

The Australian share market looks set to start the week with a bang on Monday following a stellar finish to the week on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 63 points or 0.9% higher this morning.

NEW YORK (AP) — Stocks rallied Friday to send Wall Street to its best day in six weeks.

The S&P 500 rose 1.6% to cap its first winning week in the last four as relaxing yields in the bond market took some pressure off Wall Street. It’s found some stability following a swift rise and fall to start the year.

The Dow Jones Industrial Average climbed 387 points, or 1.2%, while the Nasdaq composite jumped 2%.

Market watch​

 

[bigdog]

Asian shares rise as investors watch Fed moves, inflation

Asian shares are mostly higher in muted trading as investors assess a slew of economic data and await moves by the Federal Reserve.

apnews.com

Wall Street holds steady ahead of a potentially big week​

By STAN CHOE

NEW YORK (AP) — Stocks were mixed in quiet trading Monday as Wall Street stays in a holding pattern ahead of a potentially big week.

The S&P 500 rose 2.78 points, or 0.1%, to 4,048.42 after coming off its first winning week in the last four. The Dow Jones Industrial Average gained 40.47, or 0.1%, to 33,431.44, and the Nasdaq composite slipped 13.27, or 0.1%, to 11,675.74.

The stock market has found some footing over the last week after a roller-coaster start to the year where a swift rise gave way to a sharp tumble. At the center of it all has been high inflation and expectations for what the Federal Reserve will do about it.

Early in the year, stocks rallied and bond yields eased as hopes rose that cooling inflation would get the Fed to take it easier on its hikes to interest rates. Then, stronger-than-expected reports on the economy raised worries that inflation is not cooling as smoothly as hoped.

While that calmed worries about an imminent recession, it also forced Wall Street to raise its forecasts for how high the Fed will take interest rates. Higher rates can drive down inflation, but they also hurt prices for stocks and other investments and can create a recession in the future

On Monday, Treasury yields held relatively steady following their own roller-coaster movements this year. The yield on the 10-year Treasury was at 3.97% after topping 4% last week and reaching its highest level since November. It helps set rates for mortgages and other loans central to the economy’s strength.

On Wall Street, technology stocks were some of the market’s strongest. They tend to be some of the biggest beneficiaries of lower interest rates, which can boost demand by investors for high-growth companies.

Apple rose 1.9%, and Microsoft ticked up 0.6% to be the two biggest forces lifting the S&P 500.

On the losing end was Tesla, which fell 2%. Over the weekend, it cut the prices of two of its most expensive vehicles.

Bigger action may be ahead later this week, with several potentially market-moving events on the calendar.

Fed Chair Jerome Powell will testify before Congress for two days, beginning on Tuesday. Other Fed officials’ comments recently have led to big swings in markets, as traders try to get ahead of the next moves by the Fed.

Brian Jacobsen, senior investment strategist at Allspring Global Investments, isn’t expecting anything surprising from the testimony. That’s partly because an important data release is scheduled for later in the week on Friday, one that could by itself cause a big swing in the Fed’s thinking.

That’s when the government will release its latest monthly jobs report. If the reading it stronger than expected, particularly if it shows a big gain in wages, it could shake Wall Street and force it to raise rate expectations even higher.

The Fed has been trying to cool growth in wages to remove pressure on inflation, which remains far above its 2% target, and blowout figures could cause it to get more aggressive about rates.

The Fed’s next move on rates will arrive later this month. Besides Friday’s jobs report, upcoming releases on inflation across the economy will likely also carry a lot of weight on the decision

The Fed has pulled its key overnight rate to a range of 4.50% to 4.75%, up from virtually zero at the start of last year, in its fastest set of hikes in decades. Last month, it dialed down the size of its increases and highlighted progress being made in the battle to get inflation lower.

But that was before last month’s string of hotter-than-expected data on inflation and other measures of the economy. Wall Street now is bracing for at least three more hikes and the possibility the Fed could also ratchet the size of the increases back up.

“My view is I don’t think they need to hike anymore,” said Jacobsen, who sees last month’s strong economic data as more a bump in the road for the downward trend of inflation than a shift in momentum.

“The real objective would be to try to hold at a cruising altitude for as long as possible. The higher they go, the sooner they will likely find they will want to cut rates.”

That’s because rate hikes can take a long time to filter through the economy and have their full effects felt. Some parts of the economy, including housing and manufacturing, have already felt pain because of higher rates. The services side of the economy, meanwhile, is still cruising.

Jacobsen thinks the economy may be heading for a relatively short and shallow recession. But all the recent strength in the economy also has him thinking the economy may be in the midst of a rolling recession, where some parts are weakening while other parts remain strong enough to keep the overall whole just outside of a widespread downturn.

ASX 200 expected to fall​

The Australian share market looks set to fall on Tuesday where stocks were mixed in quiet trading Monday on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 12 points or 0.2% lower

NEW YORK Stocks were mixed in quiet trading Monday as Wall Street stays in a holding pattern ahead of a potentially big week.

The S&P 500 rose 2.78 points, or 0.1%, to 4,048.42 after coming off its first winning week in the last four. The Dow Jones Industrial Average gained 40.47, or 0.1%, to 33,431.44, and the Nasdaq composite slipped 13.27, or 0.1%, to 11,675.74.


MARKET WATCH

 

[bigdog]

Asian stocks tumble amid fears about faster rate hikes

Asian shares are mostly lower as investors fret that the Federal Reserve might raise interest rates faster if pressure stays high on inflation.

apnews.com

Stocks tumble on fears about faster rate hikes, Dow down 570​

By STAN CHOE

NEW YORK (AP) — Stocks sank Tuesday after the head of the Federal Reserve warned it could turn the dial back up on its hikes to interest rates if pressure stays high on inflation. The warning shook markets and raised worries about a possible recession down the line.

The S&P 500 dropped 1.5% for one of its worst days of the year so far. The Dow Jones Industrial Average lost 574 points, or 1.7%, while the Nasdaq composite fell 1.2%.

Inflation and what the Fed is doing about it have been at the center of Wall Street’s sharp swings this year. After seeming to be on a steady decline since last summer, reports on inflation last month came in surprisingly hot. So did a suite of other data on the economy.

That raised fears that inflation is staying stickier than feared and that the Fed will have to raise rates higher than earlier thought. Higher rates can drag down inflation because they slow the economy, but they hurt prices for stocks and other investments. They also raise the risk of a recession later on.

The Fed’s chair, Jerome Powell, on Tuesday confirmed some of those fears and said the recent data mean “the ultimate level of interest rates is likely to be higher than previously anticipated.” He also said in his testimony to a Senate committee that the Fed is ready to increase the pace of its hikes again if needed.

That would be a sharp turnaround after it had just slowed its pace of increases to 0.25 percentage points last month from earlier hikes of 0.50 and 0.75 points.

“If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes,” Powell said. “Restoring price stability will likely require that we maintain a restrictive stance of monetary policy for some time.”

After sitting at virtually unchanged levels just before Powell’s testimony, stocks fell immediately afterward.

“This is the market coming back to realistic expectations,” said Megan Horneman, chief investment officer at Verdence Capital Advisors. ”I think it’s going to continue to wash out some of the excesses in the market.”

Wall Street had already begun convincing itself that higher rates than earlier thought were on the way and that the Fed may even possibly go back to larger rate increases following last month’s data reports.

Since getting last month’s blowout jobs report and other surprisingly strong data, Wall Street largely abandoned hopes that percolated early this year for a possible cut to interest rates later in 2023. It also upped its forecast for how high the Fed will ultimately take rates before pausing.

That’s been most clear in the bond market, where the yield on the 10-year Treasury topped 4% last week and hit its highest level since November. It helps set rates for mortgages and other important loans.

On Tuesday, it again approached 4% after Powell’s comments before falling back to 3.97% from 3.96% late Monday.

The two-year Treasury yield, which moves more on expectations for the Fed, shot up to 5.01% from 4.87% and is at its highest level since 2007.

Traders now see a better than two-in-three chance the Fed will accelerate its rate hikes and raise by 0.50 percentage points on March 22. That’s a flip-flop from a day earlier, when the widespread bet was for the Fed to stick with a smaller increase of 0.25 points, according to data from CME Group.

“If they were to go 75 after pulling back to 25, that would spook the markets,” Horneman said. “I still think that they’re going to go 25, but if they go 50, I think it” would be seen as the Fed’s “being very flexible and can act quickly if needed if economic data tells them that.”

“If they articulate that, I think markets can accept that.”

More fireworks may arrive later this week and into next as the Fed gets more data points that will help shape its decision making ahead of its next meeting on interest rates.

On Friday will come the U.S. government’s monthly jobs report. Within that, most of the attention will be on how high wages are going for workers. The fear at the Fed is that too-strong gains could lead to more upward pressure on inflation.

Then two reports next week will give updates on how high inflation remains at both the consumer and at the wholesale levels.

The challenge for the market has been that the economy has actually been too strong, despite all the rate increases the Fed has thrown at it. While that resilience calms worries a recession may hit imminently, it likely means rates will need to stay higher for longer. That in turn raises the risk of a deeper recession down the line.

The big shifts among investors about where inflation and the Fed are heading have led to sharp movements for markets. In January, stocks rallied and bond yields eased as hope blossomed that inflation would cool and get the Fed to take it easier on interest rates. Then, last month’s torrent of strong data dashed those expectations and sent stocks falling and bond yields jumping.

All told, the S&P 500 fell 62.05 points Tuesday to 3,986.37. The Dow lost 574.98 to 32,856.46, and the Nasdaq sank 145.40 to 11,530.33.

One outlier was WW International, which better known as WeightWatchers. It soared 79.1% after saying it’s getting into the prescription weight loss business with the purchase of telehealth platform Sequence.

ASX 200 expected to fall​

The Australian share market looks set to give back yesterday’s gains and more on Wednesday following a poor night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 60 points or 0.8% lower this morning.
NYSE stocks sank Tuesday after the head of the Federal Reserve warned it could turn the dial back up on its hikes to interest rates if pressure stays high on inflation. The warning shook markets and raised worries about a possible recession down the line.

The S&P 500 dropped 1.5% for one of its worst days of the year so far. The Dow Jones Industrial Average lost 574 points, or 1.7%, while the Nasdaq composite fell 1.2%.

The S&P 500 fell 62.05 points Tuesday to 3,986.37. The Dow lost 574.98 to 32,856.46, and the Nasdaq sank 145.40 to 11,530.33.

Market Watch

 

[bigdog]

Asian stocks mixed after Wall St steadies amid rate fears

Asian stock markets are mixed after Wall Street steadied following a plunge on worries about more U.S. interest rate hikes. Shanghai and Seoul declined.

apnews.com

Wall Street steadies itself a day after its steep tumble​

By STAN CHOE

NEW YORK (AP) — Stocks steadied on Wall Street Wednesday and closed with a mixed finish, a day after worries about interest rates sent them to one of their worst tumbles of the year.

The S&P 500 rose 5.64 points, or 0.1%, to 3,992.01. The Dow Jones Industrial Average fell 58.06, or 0.2%, to 32,798.40, while the Nasdaq composite added 45.67, or 0.4%, to 11,576.00.

They were coming off a sharp drop the prior day after the head of the Federal Reserve warned it could speed up its hikes to interest rates if pressure on inflation stays high. Such hikes can ease inflation by slowing the economy, but they also hit prices for stocks and other investments and raise the risk of a recession in the future.

The Fed’s chair, Jerome Powell, said again Wednesday that pressure on inflation appears to be running higher than earlier expected. But he also stressed much more strenuously than he did on Tuesday that the Fed hasn’t made a decision yet on the size of its future hikes.

He said policy makers want to see what reports say in the run-up to their next meeting later this month. That gave some solace to the market, which shuddered a day earlier on fears the Fed was set to increase the size of its rate hikes.

“We’re not on a preset path, and we will be guided by the incoming data,” Powell said.

One report he highlighted in particular came out as he spoke Wednesday morning. It showed that the number of job openings advertised across the country last month remained higher than expected. Such data has become excruciatingly scrutinized on Wall Street because it can give a clue about where wages are heading for workers.

Strong wage gains are good for workers struggling to keep up with high inflation, but the Fed worries too-high growth could cause a vicious cycle that pushes inflation higher.

While the higher-than-expected number of job openings could spook markets, the report also showed some signs of easing pressure, including fewer Americans quitting their jobs.

A separate report Wednesday suggested hiring is still stronger across U.S. private employers than expected. It could offer a sneak peek of what another one of the reports highlighted by Powell could say. The U.S. government’s more comprehensive report on hiring is scheduled for Friday.

Last month, a jaw-dropping number for that report revved up worries on Wall Street that inflation may not be cooling as quickly and smoothly as hoped.

Besides that gangbusters jobs report, other data showed surprising strength in everything from spending by U.S. consumers to inflation itself at multiple levels. That caused stocks to drop and bond yields to jump in February.

Because of such strong data, Powell said rates will likely go higher than earlier expected. He also said the Fed may accelerate the pace of its hikes, a turnaround after it had just downshifted the size of its increases last month.

Expectations for a firmer Fed have been most clear in the bond market, where yields have shot higher in recent weeks.

The yield on the 10-year Treasury, which helps set rates for mortgages and other important loans, ticked up to 3.98% from 3.97% late Tuesday.

The yield on the two-year Treasury, which moves more on expectations for the Fed, rose to 5.05% from 5.02%. It’s near its highest level since 2007.

Yields on shorter-term Treasurys remain far above those for Treasurys maturing many more years in the future. That’s an unusual occurrence and one that Wall Street sees as a fairly reliable signal for an upcoming recession.

Based on where traders are betting yields will be in the future, it appears the market is implying inflation will continue to run hot, the Fed will quickly ramp up rates and then will reduce them only gradually afterward, according to Jonathan Golub, chief U.S. equity strategist at Credit Suisse. He also said the bond market appears to be signaling a recession could begin in August 2025.

For the moment, the economy still looks resilient despite the hikes to interest rates the Fed has already thrown at it. The question is how long a strong job market and spending by U.S. consumers can prop up other weakening areas of the economy, especially if the Fed keeps rates higher for longer as it’s been warning.

On Wall Street, Tesla was one of the heaviest weights on the market after U.S. regulators received two complaints that the steering wheel can come off its Model Y SUV while being driven. It dropped 3%.

On the winning side was Campbell Soup, which rose 1.9% after reporting stronger profit and revenue for the latest quarter than expected.

ASX 200 expected to rebound​

The Australian share market is expected to rebound on Thursday despite a relatively poor night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 32 points or 0.4% higher this morning.

Stocks steadied on Wall Street Wednesday and closed with a mixed finish, a day after worries about interest rates sent them to one of their worst tumbles of the year.

The S&P 500 rose 5.64 points, or 0.1%, to 3,992.01. The Dow Jones Industrial Average fell 58.06, or 0.2%, to 32,798.40, while the Nasdaq composite added 45.67, or 0.4%, to 11,576.00.

MARKET WATCH

 

[divs4ever]

the plunge protection team coming to the rescue , perhaps

several shares including BHP go ex-div. today

lets see what happens next

 

[bigdog]

Asian stocks follow Wall St lower ahead of US jobs update

Asian stock markets have followed Wall Street lower ahead of an update on United States employment amid worries about possible further interest rate hikes.

apnews.com

Deepening worries about high rates send Wall Street lower​

By DAMIAN J. TROISE

Stocks stumbled on Wall Street Thursday and added to the week’s losses as markets remain anxious about the prospect of more aggressive action by the Federal Reserve to fight inflation.

Major indexes started the day higher and gradually lost ground until they fell sharply in late trading. The S&P 500 fell 73.69 points, or 1.8% to 3,918.32. It marked the second-worst loss of the year for the benchmark index and further eroded gains made throughout January to kick off the year.

The sharp slide, which sank 95% of stocks in the S&P 500, was particularly hard on banks. The S&P 500’s financial sector slumped 4.1%.

SVB Financial Group lost 60% of its value after announcing plans to raise up to $1.75 billion in order to strengthen its position amid concerns about higher interest rates and the economy. Bank of America, Citigroup and other big banks fell sharply.

The Dow Jones Industrial Average fell 543.54 points, or 1.7% to 32,254.86 and the Nasdaq fell 237.65 points, or 2.1%, to 11,338.35.

The slump follows two days of testimony before Congress by Fed Chair Jerome Powell, who said the central bank was prepared to continue making big interest rate increases if necessary. Fears about a persistently aggressive Fed have been weighing on major indexes, all of which are on track for weekly losses.

The Fed’s inflation-fighting policies risk slowing the economy too much and pushing it into a recession, while also going too far in softening a strong labor market and putting many people out of work.

A government report on Thursday showed that the number of Americans applying for unemployment benefits last week jumped by the most in five months, but layoffs remain historically low.

Yields on the two-year Treasury, which tends to track expectations for future Fed action, eased to 4.87% from about 5.05% just before the unemployment report’s release. It had been hovering at its highest level since 2007.

The unemployment data follows a report on Wednesday showing that the number of job openings advertised across the country last month was higher than economists expected. The U.S. government’s more comprehensive report on hiring is scheduled for Friday.

A big concern within the labor market reports for the Fed and Wall Street is the pace of wage growth. Strong wage gains are good for workers struggling to keep up with high inflation, but it could also keep pushing inflation higher, making it harder for the central bank to fight high prices.

“It’s leading people to try and come to grips with what a stubbornly tight labor market means for economic growth as well as the inflationary environment,” said Keith Buchanan, portfolio manager at Globalt Investments.

Wall Street has been reviewing a range of data that has highlighted both a resilient economy and stubborn inflation. More updates are coming next week when the government releases reports on inflation at both the consumer and wholesale levels, along with retail sales data.

Traders are leaning toward the Fed raising its benchmark interest rate by 0.50 percentage points on March 22. They had been expecting the central bank to stick with a smaller increase of 0.25 points prior to Powell’s testimony this week, according to data from CME Group

“The notion that was in back of minds of investors was that the worst of the tightening cycle was making its way into the rearview mirror and it would take a lot to reaccelerate tightening,” Buchanan said. “(Powell) put the reacceleration back on the table.”

The Fed’s goal is to bring inflation down to 2%. That figure stood at 5.4% as of January. The central bank has already raised its key overnight rate to a range of 4.50% to 4.75%, up from virtually zero at the start of last year, its fastest set of hikes in decades.

Companies, meanwhile, have been cautious about their prospects through 2023 with uncertainty about the direction of the economy and inflation. General Motors fell 4.9% after joining a long list of companies with plans to trim its workforce amid worries about a recession. Many companies are coming off of a weak fourth quarter, with earnings for the broader S&P 500 slipping about 4.6%. Economists expect profits to fall through the first half of 2023.

Investors were also focusing on a mix of corporate news that sent several stocks sharply higher and lower. Toymaker Build-A-Bear Workshop jumped 21% after reporting strong fourth-quarter financial results.

JPMorgan Chase fell 5.4% after the bank sued its former executive Jes Staley, alleging that he aided in hiding Jeffrey Epstein’s yearslong sex abuse and trafficking in order to keep the financier as a client.

ASX 200 expected to fall​

The Australian share market looks set to end the week on a disappointing note. According to the latest SPI futures, the ASX 200 is expected to open 81 points or 1.2% lower this morning.

Stocks stumbled on Wall Street Thursday and added to the week’s losses as markets remain anxious about the prospect of more aggressive action by the Federal Reserve to fight inflation.

Major indexes started the day higher and gradually lost ground until they fell sharply in late trading. The S&P 500 fell 73.69 points, or 1.8% to 3,918.32. It marked the second-worst loss of the year for the benchmark index and further eroded gains made throughout January to kick off the year.

The sharp slide, which sank 95% of stocks in the S&P 500, was particularly hard on banks. The S&P 500’s financial sector slumped 4.1%.

The Dow Jones Industrial Average fell 543.54 points, or 1.7% to 32,254.86 and the Nasdaq fell 237.65 points, or 2.1%, to 11,338.35.

MARKET WATCH

 

[bigdog]

Stocks tumble as Wall Street wonders what will break next

Fear rattled Wall Street Friday, and stocks tumbled on worries about what’s next to break under the weight of rising interest rates following the biggest U.S. bank failure in nearly 15 years.

apnews.com

Stocks tumble as Wall Street wonders what will break next​

By STAN CHOE

Fear rattled Wall Street, and stocks tumbled Friday on worries about what’s next to break under the weight of rising interest rates following the biggest U.S. bank failure in nearly 15 years.

The S&P 500 dropped 1.4% to cap its worst week since September. That’s despite a highly anticipated report on Friday showing pay raises for workers are slowing and other signals Wall Street wants to see of cooling pressure on inflation.

The Dow Jones Industrial Average fell 345 points, or 1.1%, while the Nasdaq composite sank 1.8%.

Some of the market’s sharpest drops again came from the financial industry, where stocks tanked for a second day.

Regulators took over Silicon Valley Bank in a surprise midday move after shares of its parent company, SVB Financial, plunged more than 60% this week. The company, which served the industry surrounding startup companies, was trying to raise cash to relieve a crunch. Analysts have said it was in a relatively unique situation, but it’s still led to concerns a broader banking crisis could erupt.

Friday’s struggles came amid what strategists in a BofA Global Research report called “the crashy vibes of March.” Markets have been twitchy on worries that high inflation is proving difficult to subdue, which could force the Federal Reserve to reaccelerate its hikes to interest rates.

Such hikes can undercut inflation by slowing the economy, but they drag down prices for stocks and other investments. They also raise the risk of a recession later on.

Higher rates tend to hit hardest on investments seen as the riskiest and most expensive, such as cryptocurrencies and the furor around money-losing Silicon Valley startups.

“There are starting to be cracks that are appearing,” said Brent Schutte, chief investment officer at Northwestern Mutual Wealth. “SVB is a warning for the Fed that their actions are beginning to have an impact.”

The Fed has already raised rates at the fastest pace in decades and made other moves to reverse its tremendous support for the economy during the pandemic. It’s effectively pulling money out of the economy, something Wall Street calls “liquidity,” which can tighten the screws on the system.

“This is a warning sign that the liquidity is draining, and the most vulnerable areas are starting to show it, which tells me the rest of the economy is not too far behind,” Schutte said.

Wall Street already in February gave up on hopes that cuts to interest rates could come later this year. Worries then flared this week that rates are set to go even higher than expected after the Fed said it could reaccelerate the size of its rate hikes.

Friday’s jobs report helped calm some of those worries, which led to some up-and-down trading. Overall hiring was hotter than expected, which could be a sign the labor market remains too strong for the Fed’s liking.

But the data also showed a slowdown from January’s jaw-dropping hiring rate. More importantly for markets, average hourly earnings for workers rose by less in February than economists expected.

That’s crucial for Wall Street because the Fed is focusing on wage growth in particular in its fight against inflation. It worries too-high gains could cause a vicious cycle that worsens inflation, even though raises help workers struggling to keep up with rising prices at the register.

Among other signs of a cooling but still-resilient labor market, the unemployment rate ticked up and the percentage of Americans with or looking for jobs edged up by a tiny bit.

Such trends mean traders are pulling back on bets the Fed later will go back to a hike of 0.50 percentage points later this month. They’re now largely betting on the Fed sticking with a more modest 0.25 point hike, according to CME Group.

Last month, the Fed slowed to that pace after earlier hiking by 0.50 and 0.75 points.

Such expectations, along with worries about banks, helped send Treasury yields sharply lower.

The yield on the 10-year Treasury plunged to 3.69% from 3.91% late Thursday, a sharp move for the bond market. It helps set rates for mortgages and other important loans.

Some of the sharpest drops on Wall Street came from banking stocks on worries about who else may suffer a cash crunch if interest rates stay higher for longer and customers pull out deposits. That would set up pain because a flight of deposits could force them to sell bonds to raise cash, right as higher interest rates knock down prices for those bonds.

Besides SVB Financial’s struggles, Silvergate Capital also said this week it’s voluntarily shutting down its bank. It served the crypto industry and had warned it could end up “less than well-capitalized.”

Stock losses were heaviest at regional banks. First Republic Bank tumbled 14.8%. It filed a statement with regulators to reiterate its “strong capital and liquidity positions.”

Charles Schwab lost another 11.7% after dropping 12.8% Thursday “as investors stretched for read-throughs” from the SVB crisis, according to analysts at UBS. The analysts called them “logical but superficial” because of differences in how companies get their deposits

Larger banks, which have been stress-tested by regulators following the 2008 financial crisis, held up better. JPMorgan Chase rose 2.5%.

All told, the S&P 500 fell 56.73 points to 3,861.59. The Dow lost 345.22 to 31,909.64, and the Nasdaq dropped 199.47 to 11,138.89.

A SEA OF RED ON FRIDAY BELOW

 

[bigdog]

ASX 200 expected to fall again​

The Australian share market looks set to start the week in the red following a poor finish to the last one on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 39 points or 0.55% lower this morning.

On Friday, the S&P 500 dropped 1.4% to cap its worst week since September. That’s despite a highly anticipated report on Friday showing pay raises for workers are slowing and other signals Wall Street wants to see of cooling pressure on inflation.

The Dow Jones Industrial Average fell 345 points, or 1.1%, while the Nasdaq composite sank 1.8%.

Yhe S&P 500 fell 56.73 points to 3,861.59. The Dow lost 345.22 to 31,909.64, and the Nasdaq dropped 199.47 to 11,138.89.

MARKET WATCH

 

[bigdog]

Asian shares extend losses as US banking worries persist

Asian shares have fallen in early trading as investors around the world watch to see what's next following the second- and third-largest bank failures in U.S. history.

apnews.com

Bank stocks tumble; others rise on hopes for easier rates​

By STAN CHOE

Bank stocks tumbled Monday on worries about what’s next to break, following the second- and third-largest bank failures in U.S. history. But many other stocks rose on hopes the bloodletting will force the Federal Reserve to take it easier on the hikes to interest rates that are shaking Wall Street and the economy.

The S&P 500 dipped 0.2% after whipsaw trading, where it careened from an early loss of 1.4% to a midday gain of nearly that much. The Dow Jones Industrial Average fell 90 points, or 0.3%, while the Nasdaq composite rose 0.4%.

The sharpest drops again came from banks and other financial companies. Investors are worried that a relentless rise in interest rates meant to get inflation under control are approaching a tipping point and may be cracking the banking system.

The U.S. government announced a plan late Sunday meant to shore up confidence in the banking industry following the collapses of Silicon Valley Bank and Signature Bank since Friday.

The most pressure is on the regional banks a couple steps below in size of the massive, “too-big-to-fail” banks that helped take down the economy in 2007 and 2008. Shares of First Republic Bank fell 61.8%, even after the bank said Sunday it had strengthened its finances with cash from the Federal Reserve and JPMorgan Chase.

Huge banks, which have been repeatedly stress-tested by regulators following the 2008 financial crisis, weren’t down as much. JPMorgan Chase fell 1.8%, and Bank of America dropped 5.8%.

“So far, it seems that the potential problem banks are few, and importantly do not extend to the so-called systemically important banks,” analysts at ING said.

The broader market flipped from losses to gains as expectations built that all the furor will mean the Fed won’t reaccelerate its rate hikes, as it had been threatening to do. Such a move could give the economy and banking system more breathing space, but it could also give inflation more oxygen.

Some investors are calling for the Fed to make cuts to interest rates soon to stanch the bleeding. Rate cuts often act like steroids for the stock market.

The wider expectation, though, is that the Fed will likely pause or at least hold off on accelerating its rate hikes at its next meeting later this month.

That would still be a sharp turnaround from expectations just a week ago, when many traders were forecasting the Fed could go back to increasing the size of its rate hikes. The fear was that stubbornly high inflation would force the Fed to get even tougher, and investors were bracing for the Fed to keep hiking at least a couple more times after that.

Now, “depending on reactions in financial markets and eventual fallout on the overall economy, we wouldn’t rule out that the hiking cycle could even be over and that the next move by Fed officials may be lower not higher,” said Kevin Cummins, chief U.S. economist at NatWest.

Higher interest rates can drag down inflation by slowing the economy, but they raise the risk of a recession later on. They also hit prices for stocks, as well as bonds sitting in investors’ portfolios.

The Fed has already hiked rates at the fastest pace in generations and made other moves to reverse its tremendous support for the economy during the pandemic. That’s effectively drained cash from the system, something Wall Street calls “liquidity.”

“Restoring liquidity in the banking system is easier than restoring confidence, and today it is clearly about the latter,” said Quincy Krosby, chief global strategist for LPL Financial.

At one point during the morning, a measure of fear among stock investors on Wall Street touched its highest level since October before falling back.

Prices for Treasurys shot higher as investors sought safety and as their expectations grew for an easier Fed. That in turn sent their yields lower, and the yield on the 10-year Treasury plunged to 3.54% from 3.70% late Friday. That’s a major move for the bond market.

The two-year yield, which moves more on expectations for the Fed, had an even more breath-taking drop. It fell to 3.99% from 4.59% Friday. It was above 5% earlier this month.

Stock markets were mixed in Asia, but the losses deepened as trading headed westward through Europe. Germany’s DAX lost 3% as bank stocks across the continent sank.

In London, the government arranged the sale of Silicon Valley Bank UK Ltd., the California bank’s British arm, for the nominal sum of one British pound, or roughly $1.20.

All told, the S&P 500 slipped 5.83 points to 3,855.76. The Dow fell 90.50 to 31,819.14, and the Nasdaq rose 49.96 to 11,188.84.

ASX 200 expected to fall again​

The Australian share market looks set to fall again on Tuesday despite a solid start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 132 points or 1.8% lower

Bank stocks tumbled Monday on worries about what’s next to break, following the second- and third-largest bank failures in U.S. history. But many other stocks rose on hopes the bloodletting will force the Federal Reserve to take it easier on the hikes to interest rates that are shaking Wall Street and the economy.

The S&P 500 dipped 0.2% after whipsaw trading, where it careened from an early loss of 1.4% to a midday gain of nearly that much. The Dow Jones Industrial Average fell 90 points, or 0.3%, while the Nasdaq composite rose 0.4%.

All told, the S&P 500 slipped 5.83 points to 3,855.76. The Dow fell 90.50 to 31,819.14, and the Nasdaq rose 49.96 to 11,188.84.

MARKET WATCH

​

 

[Dona Ferentes]

Just a reminder, with time change differences, from this week N.Y. closes at 7am AEST. ... and an hour later when daylight savings ends

Spring Forward, Fall Back

(sorry QLD, WA, SA.)

hello Adelaide, lights still on??

 

[bigdog]

Asian stocks higher after Wall St rebounds from bank jitters

Asian stock markets are higher after Wall Street stabilized following sharp declines for bank stocks and U.S. inflation edged lower.

apnews.com

Wall Street climbs as some beaten-down bank stocks recover​

By STAN CHOE and ALEX VEIGA

Stocks ended broadly higher on Wall Street Tuesday, as some of the most breathtaking moves from a manic Monday reversed course.

The S&P 500 rose 1.7% after a report showed inflation is still high but heading lower. Stocks of smaller and mid-sized banks recovered some of their prior plunges caused by worries that customers could yank out all their cash. Treasury yields soared to trim their historic drops.

The Dow Jones Industrial Average rose 1.1%, while the Nasdaq composite added 2.1%. Gains in technology stocks, banks and communications services companies powered much of the rally.

A week ago, Wall Street was expecting Tuesday’s report on inflation to be the most important data of the week, if not month. The worry at the time was that inflation is staying stubbornly high, which could force the Federal Reserve to pick up the pace again on its hikes to interest rates.

Such hikes can drive down inflation by slowing the economy, but they raise the risk of a recession later on. They also hurt prices for stocks, bonds and all kinds of other investments.

Tuesday’s report showed that inflation at the consumer level was 6% in February, versus a year before. That matched economists’ expectations and was a slowdown from January’s 6.4% inflation rate, but it’s still way above the Fed’s target.

In normal times, that could indeed call for an increase in the size of rate hikes. The trouble for the Fed is that it’s also facing a banking system that may already be cracking due to all of its rate increases from the last year, which came at the fastest pace in decades. The second- and third-largest bank failures in U.S. history have both come since Friday.

“The Fed is stuck between a rock and a hard place,” said Brian Jacobsen, senior investment strategist at Allspring Global Investments.

“Inflation met expectations, but is still uncomfortably hot. Financial stresses are intense. Prudence would dictate they pause, but couple it with a stern warning that if inflation trends don’t improve that they might need to hike more.”

He said the Fed also has other tools to use besides rate increases. Among them: The Fed could adjust the speed at which it’s shrinking its massive trove of bond investments, an action that effectively tightens the screws on the financial system.

An easier Fed could give the banking system and economy more breathing room, but it could also give inflation more oxygen.

Traders rushed Monday to place some bets that the Fed could decide to keep rates steady at its next meeting, instead of accelerating to a hike of 0.50 percentage points as they thought a week ago. Following the inflation data, bets are largely falling on it sticking with an increase of 0.25 points later this month, according to data from CME Group.

“From there, something like this should give the Fed pause about how much tightening is already in the system and has just yet to show up, especially when the labor market and the inflation data is cooling,” said Ross Mayfield, investment strategist at Baird.

“Markets have been trying to gauge a Fed pivot since last June, it feels like, and gotten it wrong every time,” he added. “This feels like an event that could actually push the Fed to pivot.”

Stocks across the financial industry rose Tuesday, recovering some of their steep earlier drops. First Republic Bank jumped 27% after plunging 67.5% over the prior three days. KeyCorp gained 6.9%, Zions Bancorp. rose 4.5% and Charles Schwab climbed 9.2%.

Among other big movers on Wall Street, Facebook’s parent company climbed 7.3% after it said it expects expenses this year to be lower than earlier forecast. Meta Platforms is cutting workers and eliminating job openings to rein in expenses.

All told, the S&P 500 rose 64.80 points to 3,920.56, ending a three-day losing streak. The Dow added 336.26 points to 32,155.40, and the Nasdaq gained 239.31 points to 11,428.15.

The U.S. government announced a plan late Sunday to shore up confidence in the banking system following the failures of Silicon Valley Bank on Friday and Signature Bank on Sunday. Banks are struggling as higher interest rates knock down the value of their investments, while contending with worries that skittish customers could try to withdraw their money en masse to cause a run.

Some of the wildest action has been in the bond market, where the yield on the two-year Treasury plunged Monday by roughly half of a percent. That’s a historic-sized move for the bond market. Yields plummeted as investors piled into investments seen as safe and ratcheted back their expectations for future rate increases by the Fed.

The two-year yield climbed back to 4.21% from 4.02% late Monday, another huge move.

The 10-year yield jumped to 3.66% from 3.55%. It helps set rates for mortgages and other important loans.

European markets also rebounded after a broad retreat in Asia.

ASX 200 expected to rebound​

The Australian share market looks set to rebound on Wednesday following a solid night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 67 points or 1.0% higher this morning.

Stocks ended broadly higher on Wall Street Tuesday, as some of the most breathtaking moves from a manic Monday reversed course.

The S&P 500 rose 1.7% after a report showed inflation is still high but heading lower. Stocks of smaller and mid-sized banks recovered some of their prior plunges caused by worries that customers could yank out all their cash. Treasury yields soared to trim their historic drops.

The Dow Jones Industrial Average rose 1.1%, while the Nasdaq composite added 2.1%. Gains in technology stocks, banks and communications services companies powered much of the rally.

the S&P 500 rose 64.80 points to 3,920.56, ending a three-day losing streak. The Dow added 336.26 points to 32,155.40, and the Nasdaq gained 239.31 points to 11,428.15.

MARKET WATCH

 

[bigdog]

Asian stocks fall after Wall St sinks on new bank fears

Asian stock markets have tumbled after Wall Street sank as a plunge in Credit Suisse shares reignited worries about a possible bank crisis following the failure of two U.S. lenders.

apnews.com

Wall Street falls on new bank fears, bond yields plunge​

By STAN CHOE

NEW YORK (AP) — Markets shuddered Wednesday on worries about a spreading banking crisis and how badly it will hit the economy, and stocks and bond yields fell on both sides of the Atlantic.

The S&P 500 sank as much as 2.1% before ending the day with a loss of 0.7%, while markets in Europe fell more sharply as shares of Switzerland’s Credit Suisse dropped to a record low. The Dow Jones Industrial Average lost 280 points, or 0.9%, after dropping as much as 725 points. The Nasdaq composite rose 0.1% after erasing a steep decline.

Markets trimmed their losses toward the end of the day as the Swiss National Bank said it could provide some assistance to Credit Suisse “if needed.”

But that came only after a steep drop for Credit Suisse rattled investors worldwide. Its shares in Switzerland sank 24.2% following reports that its top shareholder won’t pump more money into its investment. The bank has been fighting troubles for years, including losses it took related to the 2021 collapse of investment firm Archegos Capital.

“They’ve had issues,” said Anthony Saglimbene, chief market strategist at Ameriprise. “It’s just coming at a time when there’s more uncertainty and there’s less confidence in the banking system.”

Wall Street’s harsh spotlight has intensified across the banking industry recently on worries about what may crack next following the second- and third-largest bank failures in U.S. history over the last week. Stocks of U.S. banks tumbled again Wednesday after enjoying a brief, one-day respite on Tuesday.

The heaviest losses were focused on smaller and midsize banks, which are seen as more at risk of having customers try to pull their money out en masse. Larger banks also fell, but not by quite as much.

First Republic Bank sank 21.4%, a day after soaring 27%. JPMorgan Chase slid 4.7%.

Many analysts are quick to say the current weakness for banks looks nowhere near as bad as the 2008 crisis that torpedoed the global economy. But worries are nevertheless rising that pain spreading through the banking system could spark a downturn.

“When you have worries about contagion and a financial crisis, there is increasing risk of a global recession,” Saglimbene said, pointing to the first drop in the price of U.S. crude oil below $70 per barrel since late 2021. A weaker economy would burn less fuel.

“The regional banks are so important to small businesses, midsized businesses” by providing loans, he said. “They’re a centerpiece of the economy.”

Much of the damage for banks is seen as the result of the Federal Reserve’s fastest barrage of hikes to interest rates in decades. The Fed has pulled its key overnight rate to a range of 4.50% to 4.75%, up from virtually zero at the start of last year, in hopes of driving down painfully high inflation.

Higher rates can tame inflation by slowing the economy, but they raise the risk of a recession later on. They also hurt prices for stocks, bonds and other investments. That latter factor was one of the issues hurting Silicon Valley Bank, which collapsed Friday, because high rates forced down the value of its bond investments.

The Fed’s fusillade of rate hikes over the year have shocked the system following years of historically easy conditions. In his annual letter to investors, BlackRock CEO Larry Fink pointed to prior eras of rising rates that led to “spectacular financial flameouts,” such as the yearslong savings and loan crisis.

“We don’t know yet whether the consequences of easy money and regulatory changes will cascade throughout the U.S. regional banking sector (akin to the S&L Crisis) with more seizures and shutdowns coming,” he wrote.

Some of this week’s wildest action has been in the bond market, where traders are rushing to guess what all the chaos will mean for future Fed action. On one hand, stress in the financial system could push the Fed to hold off on hiking rates again at its meeting next week, or at least refrain from the larger rate hike it had been potentially signaling.

On the other hand, inflation is still high. While taking it easier on interest rates could give more breathing space to banks and the economy, the fear is such a move by the Fed could also give inflation more oxygen.

Weaker-than-expected economic reports released Wednesday may have allayed some of those worries. One showed that inflation at the wholesale level slowed by much more last month than economists expected. It’s still high at a 4.6% level versus a year earlier, but that was better than the 5.4% that was forecast.

Other data showed that U.S. spending at retailers fell by more than expected last month. Such data could raise worries about a recession on the horizon, but they may also take some pressure off inflation in the near term.

That caused the yield on the two-year Treasury to plummet. It tends to track expectations for the Fed, and it dropped to 3.89% from 4.25% late Tuesday. That’s a massive move for the bond market. The two-year yield was above 5% just a week ago, at its highest level since 2007.

In Europe, indexes tumbled on weakness from banks. France’s CAC 40 dropped 3.6%, and Germany’s DAX lost 3.3%. The FTSE 100 in London fell 3.8%.

On Wall Street, companies in the oil and gas business had the sharpest stock drops. Helping to cushion the blow were gains for several Big Tech stocks. They’ve had their own struggles recently, but they tend to benefit from lower interest rates.

All told, the S&P 500 fell 27.36 points to 3,891.93. The Dow lost 280.83 to 31,874.57, while the Nasdaq rose 5.90 to 11,434.05.

ASX 200 expected to sink​

The Australian share market is expected to sink on Thursday amid concerns that Credit Suisse could collapse. According to the latest SPI futures, the ASX 200 is expected to open the day 115 points or 1.7% lower this morning.

NYSE Markets shuddered Wednesday on worries about a spreading banking crisis and how badly it will hit the economy, and stocks and bond yields fell on both sides of the Atlantic.

The S&P 500 sank as much as 2.1% before ending the day with a loss of 0.7%, while markets in Europe fell more sharply as shares of Switzerland’s Credit Suisse dropped to a record low. The Dow Jones Industrial Average lost 280 points, or 0.9%, after dropping as much as 725 points. The Nasdaq composite rose 0.1% after erasing a steep decline.

The S&P 500 fell 27.36 points to 3,891.93. The Dow lost 280.83 to 31,874.57, while the Nasdaq rose 5.90 to 11,434.05.


MARKET WATCH

 

[bigdog]

Asian shares up after First Republic aid spurs Wall St rally

Shares have advanced in Asia, tracking a rally on Wall Street after a group of big banks offered a lifeline to First Republic Bank, the lender investors had focused on in their hunt for troubles in the banking industry.

apnews.com

Stocks rally after battered First Republic gets a lifeline​

By STAN CHOE

NEW YORK (AP) — Stocks rallied Thursday after a group of big banks offered a lifeline to the bank that investors had zeroed in on in their hunt for the industry’s next victim.

The S&P 500 jumped 1.8% for its best day in nearly two months after 11 of the biggest banks said they would deposit a combined $30 billion into First Republic Bank. The Dow Jones Industrial Average erased an early loss of 300 points to climb 371 points, or 1.2%, while the Nasdaq composite jumped 2.5%.

This week has been a whirlwind for markets globally on worries that banks may be bending under the weight of the fastest set of hikes to interest rates in decades. The concerns have been flaring since Friday’s collapse of Silicon Valley Bank, which was the second largest bank failure in U.S. history.

Since then, Wall Street has tried to root out banks with similar traits, such as lots of depositors with more than the $250,000 limit that’s insured by the Federal Deposit Insurance Corp., or lots of tech startups and other highly connected people that can spread worries about a bank’s strength quickly.

First Republic Bank has been at the center of the market’s swivels, and it rose 10% Thursday after slumping as much as 36% early in the day. In the statement announcing their deposits, the group of 11 banks said the move “reflects their confidence in First Republic and in banks of all sizes.”

Besides stocks, Treasury yields also strengthened suddenly following the first reports of a possible rescue by the industry. That was a sign of increased confidence from the bond market.

Across the Atlantic, European stocks rose after the European Central Bank announced a hefty increase to interest rates. Concerns there were also easing about another bank, Credit Suisse, which helped cause markets to tumble sharply Wednesday. The Swiss bank has been battling troubles for years, but its plunge to a record low raised concerns just as more attention was shining on the wider industry.

Credit Suisse’s stock in Switzerland leaped 19.2% Thursday after it said it will strengthen its finances by borrowing up to 50 billion Swiss francs ($54 billion) from the Swiss National Bank.

Much of the damage for banks is seen as the result of the Federal Reserve’s fastest barrage of hikes to interest rates in decades. They’ve shocked the system following years of historically easy conditions in hopes of driving down painfully high inflation

Higher rates can tame inflation by slowing the economy, but they raise the risk of a recession later on. They also hurt prices for stocks, bonds and other investments. That latter factor was one of the issues hurting Silicon Valley Bank because high rates forced down the value of its bond investments.

U.S. Treasury Secretary Janet Yellen told a Senate committee on Thursday that the nation’s banking system “remains sound” and Americans “can feel confident” about their deposits.

“Fast-moving disruptions in the global banking industry are making for highly fluid and uneasy markets,” said John Gentry, head of corporate fixed income group at Federated Hermes. “It’s never comfortable when” markets are trying to figure out the correct price for things amid deep uncertainty. “But we suggest caution in trying to draw strong parallels to 2007-09,” when a financial crisis torpedoed the global economy.

Wall Street increasingly expects this week’s turmoil to push the Federal Reserve to hike interest rates next week by only a quarter of a percentage point. That would be the same sized increase as last month’s, and it would be counter to expectations from earlier this month for a hike of 0.50 points, as it had been potentially signaling.

The European Central Bank on Thursday raised its key rate by half a percentage point, brushing aside speculation that it may reduce the size because of all the turmoil around banks.

Some of Wall Street’s wildest action this week has been in the bond market, as traders rush to guess where the Fed is heading.

The yield on the 10-year Treasury rose to 3.57% from 3.47% late Wednesday. Earlier in in the day, it dropped as low as 3.37% and has been veering sharply since climbing above 4% earlier this month. It helps set rates for mortgages and other important loans.

All the stress in the banking system has raised worries about a potential recession because of how important smaller and mid-sized banks are to making loans to businesses across the country. Oil prices have slid this week on such fears.

Reports on the U.S. economy, meanwhile, continue to show mixed signals.

The job market looks remarkably solid, and a report said fewer workers applied for unemployment benefits last week than expected.

But other pockets of the economy are continuing to show weakness. Manufacturing has struggled, for example, and a measure of activity in the mid-Atlantic region weakened by more than forecast.

The housing market has also struggled under the weight of higher mortgage rates, though homebuilders broke ground on more projects last month than expected. That could be a signal the industry is finding some stability.

All told, the S&P 500 rose 68.35 points to 3,960.28. The Dow gained 371.98 to 32,246.55, and the Nasdaq jumped 283.22 to 11,717.28.

ASX 200 expected to rebound​

The Australian share market looks set to end the week on a positive note. According to the latest SPI futures, the ASX 200 is expected to open 27 points or 0.4% higher this morning.

Stocks rallied Thursday after a group of big banks offered a lifeline to the bank that investors had zeroed in on in their hunt for the industry’s next victim.

The S&P 500 jumped 1.8% for its best day in nearly two months after 11 of the biggest banks said they would deposit a combined $30 billion into First Republic Bank. The Dow Jones Industrial Average erased an early loss of 300 points to climb 371 points, or 1.2%, while the Nasdaq composite jumped 2.5%.

The S&P 500 rose 68.35 points to 3,960.28. The Dow gained 371.98 to 32,246.55, and the Nasdaq jumped 283.22 to 11,717.28.

MARKET WATCH

 

[bigdog]

Stocks fall to cap chaotic week driven by fears about banks

Wall Street’s week of turmoil closed with drops for stocks. The S&P 500 fell 1.1% Friday, led by declines in First Republic and other banks.

apnews.com

Stocks fall to cap chaotic week driven by fears about banks​

By STAN CHOE

NEW YORK (AP) — A whipsaw week for Wall Street closed with drops for stocks Friday as worries worsened about the banking industry and fears rose that it could drag the economy into a recession.

The S&P 500 sank 1.1%, cutting into its gain for the week. The Dow Jones Industrial Average lost 384 points, or 1.2%, while the Nasdaq composite fell 0.7%.

Markets around the world churned this past week as worries rose following the second- and third-largest U.S. bank failures in history. Just a day earlier, markets rallied in relief after two banks in investors’ crosshairs bolstered their cash holdings.

But on Friday, some of the hope washed out, and the pair went back to falling. In Switzerland, Credit Suisse shares dropped 8%. On Wall Street, shares of First Republic Bank sank nearly 33% to bring their plunge for the week to 71.8%.

The two banks have different sets of issues challenging them, but the overriding fear is that the banking system may be cracking under the weight of the fastest set of hikes to interest rates in decades.

“If the Fed hikes this far this fast, something will break,” said Ross Mayfield, investment strategy analyst at Baird. “There’s a very clear and evident history of that happening, even in slower, smaller rate-hike cycles.”

Analysts have been quick to say the current chaos for banks looks nowhere near as bad as the 2007-08 financial crisis that ruined the global economy. But the troubles still feed into concerns about a recession because problems for banks could mean problems for smaller and mid-sized companies getting the loans they need to grow.

In “the biggest picture: since 1870 there have been 14 big world recessions, all driven by wars, pandemics & banking crises,” investment strategist Michael Hartnett wrote in a BofA Global Research report.

Banks borrowed nearly $165 billion from the Federal Reserve over the last week in a sign of how much stress is in the system.

After years of enjoying historically easy conditions, banks are now getting a shock after the Federal Reserve and other central banks jacked up interest rates at a blistering pace. The moves are meant to get the world’s high inflation under control.

Higher rates can indeed help tame inflation by slowing the economy, but they raise the risk of a recession later on. They also hurt prices for stocks, bonds and other investments. That latter factor was one of the issues hurting Silicon Valley Bank, which regulators seized a week ago.

Since then, Wall Street has tried to root out banks with similar traits to Silicon Valley Bank, such as lots of depositors with more than the $250,000 limit that’s insured by the Federal Deposit Insurance Corp., or lots of tech startups and other highly connected people that can spread worries about a bank’s strength quickly.

That’s why investors keyed in so much on San Francisco-based First Republic. A group of 11 of the biggest banks on Thursday said they would deposit a combined $30 billion in the bank to show their confidence in it and banks in general. After getting a brief respite Thursday, its stock fell again Friday with other smaller and mid-sized banks.

“There’s still a lot of unknowns,” Baird’s Mayfield said about what types of investments banks have in their portfolios and how easily they can be turned into cash quickly. “That’s the biggest fear. That’s when markets are typically at their most volatile and most negative. And for most investors who have been in the business for a while, it’s hard not to call back to memory 2008, 2009 even if it does look quite different.”

Some of the wildest action has been in the bond market, where yields have swung as traders drastically recalibrate bets for where the Fed will take rates.

The yield on the two-year Treasury dropped to 3.81% from 4.17% late Thursday. It was above 5% last week and at its highest level since 2007. That’s a massive move for the bond market.

Traders largely expect this week’s turmoil to push the Federal Reserve to hike interest rates at its next meeting by only a quarter of a percentage point. That would be the same sized increase as last month’s and half the hike of 0.50 points that some traders were earlier expecting.

A report on Friday gave the Fed possibly more reason to hold off on reaccelerating its rate hikes. Expectations for inflation among U.S. consumers are falling, according to a preliminary survey by the University of Michigan. That’s key for the Fed, which has said such expectations can feed into virtuous and vicious cycles.

In a more discouraging signal for the economy, confidence also fell. That’s at the heart of the most important part of the U.S. economy: consumer spending.

Easing expectations for the Fed have helped several Big Tech stocks recently. They’ve had their own problems, but they tend to benefit from lower interest rates. Partly because of that, the S&P 500 still logged a gain of 1.4% for this past week.

All told, the S&P 500 fell 43.64 points Friday to 3,916.64. The Dow fell 384.57 to 31,861.98, and the Nasdaq fell 86.76 to 11,630.51.

Cryptocurrencies shot even higher. Bitcoin rose more than 30% this week.

 

[bigdog]

ASX 200 expected to sink​

The Australian share market looks set to start the week in the red following a poor finish to the week on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 98 points or 1.4% lower this morning.

A whipsaw week for Wall Street closed with drops for stocks Friday as worries worsened about the banking industry and fears rose that it could drag the economy into a recession.

The S&P 500 sank 1.1%, cutting into its gain for the week. The Dow Jones Industrial Average lost 384 points, or 1.2%, while the Nasdaq composite fell 0.7%.

All told, the S&P 500 fell 43.64 points Friday to 3,916.64. The Dow fell 384.57 to 31,861.98, and the Nasdaq fell 86.76 to 11,630.51.

MARKET WATCH

 

[bigdog]

Asian stocks rise ahead of Fed's next interest rate decision

BEIJING (AP) — Asian stock markets followed Wall Street higher on Tuesday ahead of a Federal Reserve decision on another possible interest rate hike amid worries about global banks. Shanghai, Hong Kong and Seoul advanced. Japanese markets were closed for a holiday. Oil prices declined. Wall...

ca.finance.yahoo.com

Stocks rise on Wall Street after bank deal, regulator moves​

Stan Choe

Stocks rose on Wall Street after regulators pushed together two huge banks over the weekend and made other moves to build confidence in the struggling industry

The S&P 500 climbed 34.93 points, or 0.9%, to 3,951.57. The Dow Jones Industrial Average gained 382.60, or 1.2%, to 32,244.58, and the Nasdaq composite added 45.02, or 0.4%, to 11,675.54.

Much attention has been on banks because they may be cracking under the pressure of much higher interest rates. Swiss banking giant UBS said Sunday it would buy its troubled rival Credit Suisse for almost $3.25 billion in a deal quickly put together by regulators. Credit Suisse has been battling a unique set of problems for years, but they came to a head last week as its stock price tumbled to a record low.

A group of central banks stretching from the United States to Japan also announced coordinated moves on Sunday meant to ease strains in the financial system. They should allow banks more access to U.S. dollars if needed, in an echo to a practice widely used in prior crises.

The moves don't mean the banking industry's crisis is over, but “it’s taken one of the troublesome aspects off the table,” said Ryan Detrick, chief market strategist at Carson Group.

The late Sunday announcements by regulators may be reminiscent of the 2007-08 financial crisis that wrecked the global economy, but many investors see big differences between then and now.

“The market is trying to digest: Is this just a few bad financial companies that have really made some bad decisions, or is the whole thing a house of cards?" Detrick said. "We’re optimistic that it’s multiple banks in a bad situation but not the entire system.”

In the U.S., most of the attention has been on smaller and mid-sized banks on fears that falling trust could push their depositors to pull their money all at once. That’s what’s called a bank run, and such a move could topple them.

First Republic Bank has been at the center of investors’ crosshairs in the hunt for the industry’s next victim following the second- and third-largest U.S. bank failures in history. Its shares fell 47.1% after S&P Global Ratings cut its credit rating for a second time since Wednesday.

S&P said it could lower the rating even further despite a group of the biggest U.S. banks announcing last week they would deposit $30 billion in a sign of faith in First Republic and the larger banking industry.

While that money certainly helps, “it may not solve the substantial business, liquidity, funding, and profitability challenges that we believe the bank is now likely facing,” the credit-ratings agency said.

Stocks of other smaller- and mid-sized banks, meanwhile, were much stronger.

New York Community Bancorp jumped 31.7% after it agreed to buy much of Signature Bank in a $2.7 billion deal, the Federal Deposit Insurance Corp. said late Sunday. Signature Bank became the industry’s third-largest failure earlier this month after regulators seized it.

Much of the rest of the U.S. stock market also pushed higher, but how long that lasts is a question mark. A huge decision is looming on the calendar by the Federal Reserve.

The U.S. central bank will announce its latest move on interest rates Wednesday. For a while, Wall Street was betting it would reaccelerate its hikes because of how stubborn high inflation has remained.

Higher rates can undercut inflation by slowing the economy, but they raise the risk of a recession later on. They also hurt prices for stocks and other investments. That was one of the factors hurting Silicon Valley Bank, which earlier this month became the second-biggest U.S. bank failure in history. Bonds owned by it and other banks have seen their prices fall as interest rates rose sharply.

The Fed has already pulled its key overnight rate to a range of 4.50% to 4.75%, up from virtually zero at the start of last year.

But all the recent stress in the banking system has pushed Wall Street to believe the Fed likely won’t pick up the pace again on its rate hikes.

Many economists and investors were already expecting at least a mild recession to hit the U.S. economy given all the recent rate increases. The worry is that strains for regional banks could raise the risk higher. That's because of how important such banks are in giving loans to smaller- and mid-sized companies to grow.

Drastic recalibrations by investors for what the Fed will do with interest rates have caused historic swings in the bond market. Yields there have plunged since earlier this month.

Consider the two-year Treasury, which tends to move closely with expectations for the Fed. Its yield was above 5% earlier this month, at its highest level since 2007, after data on inflation and other measures of the economy kept coming in higher than expected.

Last week it plunged well below 4%, which is a massive move for the bond market. It rose to 3.97% from 3.84% late Friday.

In markets abroad, stocks rose in Europe after falling across much of Asia.

ASX 200 expected to rebound​

The Australian share market looks set to rebound on Tuesday following a solid start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 45 points or 0.65% higher.
Stocks rose on Wall Street after regulators pushed together two huge banks over the weekend and made other moves to build confidence in the struggling industry

The S&P 500 climbed 34.93 points, or 0.9%, to 3,951.57. The Dow Jones Industrial Average gained 382.60, or 1.2%, to 32,244.58, and the Nasdaq composite added 45.02, or 0.4%, to 11,675.54.

MARKET WATCH

 

[bigdog]

Asian shares advance on back of Wall Street rally

Asian shares are higher after stocks rallied on Wall Street, including the banks most beaten down by the industry's crisis.

apnews.com

Stocks rise for first 2-day rally since banking crisis began​

By STAN CHOE and ALEX VEIGA

NEW YORK (AP) — Stocks rallied Tuesday, led by the banks most beaten down by the industry’s crisis, and some of Wall Street’s fear washed out on hopes the U.S. government will offer more help if needed.

The S&P 500 jumped 1.3% to lock in its first back-to-back gain since Silicon Valley Bank’s quicksilver failure began two weeks ago. The Dow Jones Industrial Average rose 316 points, or 1%, while the Nasdaq composite jumped 1.6%.

Markets around the world have pinballed sharply this month on worries the banking system may be cracking under the pressure of the fastest set of hikes to interest rates in decades. This week’s rally now runs into a huge test: On Wednesday afternoon, the Federal Reserve will announce what’s largely expected to be its latest increase to rates.

Tuesday’s strength for stocks came after Treasury Secretary Janet Yellen told a bankers’ group more government assistance “could be warranted” if risks arise that could bring down the system. That could mean making sure customers at a weakened bank get all their money, even those with more than the $250,000 limit insured by the Federal Deposit Insurance Corp.

“Janet Yellen coming out and saying should other deposits need to be protected, they’re willing and able to do that, I think that’s a very strong statement,” said Mary Ann Bartels, chief investment strategist at Sanctuary Wealth. “And so markets have been able to calm down.”

Earlier this month, the U.S. government said it would make all depositors at Silicon Valley Bank and Signature Bank whole. They were the second- and third-largest U.S. bank failures in history.

Those banks had struggled as depositors rushed to pull their money out en masse. Such runs can topple a bank, and investors have since been hunting for the next one that could fall. Much focus has been on First Republic Bank, which shares some similar traits with Silicon Valley Bank, and its stock had lost 90% for the month through Monday.

It jumped 29.5% Tuesday.

Other smaller and mid-sized banks also rallied, including a 9.1% climb for Comerica and a 9.3% jump for KeyCorp.

Hopes for the banking industry began to turn over the weekend after regulators pushed together two huge Swiss banks. Shares of both banks rose Tuesday in Switzerland, including a 12.1% jump for acquirer UBS. Credit Suisse, meanwhile, rose 7.3% after tumbling a day earlier.

Credit Suisse had longstanding problems that were relatively unique, but all banks on both sides of the Atlantic have the shared challenge of navigating a world with much higher interest rates than a year earlier.

Central banks have jacked up rates at a blistering pace in hopes of getting high inflation under control. But such moves act like huge hammers with little nuance. They try to bring down inflation by slowing the entire economy.

That raises the risk of a recession later on. Higher rates also hurt prices for stocks and other investments. That’s one of the factors that hurt Silicon Valley Bank, which saw the value of its bond investments drop with the rise in rates.

Earlier this month, much of Wall Street was bracing for the Fed to reaccelerate its hikes and raise by 0.50 percentage points on Wednesday. A string of reports on the economy had come in hotter than expected, including data on the job market, retail sales and inflation itself.

But all the turmoil in the banking industry has traders betting the Fed will stick with an increase of 0.25 points.

Traders are even beginning to bet that the Fed may cut interest rates later this year. Rate cuts can act like steroids for markets, and they would also give the economy and banks more room to breathe. On the downside, they could give inflation more fuel.

It was just a few weeks ago that Wall Street had washed out a prior set of hopes for a rate cut. The resurgence of such expectations could be setting the market up for more disappointment in the future if they don’t happen.

“We’ve been down this road before where the market expects rate cuts and the Fed dials them back,” Bartels said.

That’s why even more attention may be on what the Federal Reserve says about future moves on rates Wednesday than on what it actually does. The Fed is slated to release its latest projections on where policymakers see inflation, the job market and rates are heading in upcoming years.

In markets abroad, stocks rallied across Europe and Asia.

In the bond market, huge swings continue to rock the market. Yields have been mostly plunging this month on expectations for an easier Fed. The yield on the two-year Treasury, for example, tumbled from its highest level since 2007, above 5%, back below 4%, which is a massive move for it.

It rose to 4.17% from 3.97% late Monday.

The 10-year Treasury yield, which helps set rates on mortgages and other important loans rose to 3.60% from 3.44%.

The S&P 500 rose 51.30 points to 4,002.87. The Dow gained 316.02 to 32,560.60, and the Nasdaq climbed 184.57 to 11,860.11.

ASX 200 expected to rise​

The Australian share market looks set to continue its recovery on Wednesday following a solid night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 62 points or 0.85% higher this morning.

Stocks rallied Tuesday, led by the banks most beaten down by the industry’s crisis, and some of Wall Street’s fear washed out on hopes the U.S. government will offer more help if needed.

The S&P 500 jumped 1.3% to lock in its first back-to-back gain since Silicon Valley Bank’s quicksilver failure began two weeks ago. The Dow Jones Industrial Average rose 316 points, or 1%, while the Nasdaq composite jumped 1.6%.

The S&P 500 rose 51.30 points to 4,002.87. The Dow gained 316.02 to 32,560.60, and the Nasdaq climbed 184.57 to 11,860.11.

MARKET WATCH

 

[bigdog]

Asian shares decline after Fed hints rate hikes may end soon

Asian shares are mostly lower after the Federal Reserve raised a key interest rate, while noting the end may be near for its economy-crunching rate hikes.

apnews.com

Stocks fall, bond yields tumble after Fed’s latest rate hike​

By STAN CHOE

NEW YORK (AP) — Stocks fell sharply Wednesday after the Federal Reserve indicated the end may be near for its economy-crunching hikes to interest rates, but it also doesn’t expect to cut rates anytime soon despite Wall Street’s hopes.

The S&P 500 fell 1.6% for its first drop in three days. The Dow Jones Industrial Average lost 530 points, or 1.6%, while the Nasdaq composite dropped 1.6%.

Some of the sharpest drops came again from the banking industry, where investors are worried about the possibility of more banks failing if customers pull out their money all at once. They slid after Treasury Secretary Janet Yellen said she’s not considering blanket protection for all depositors at all banks, unless they present a risk to the overall system.

Stocks had been little changed for much of the day, before the Fed raised its key rate by a quarter of a percentage point in its campaign to drive down inflation. The move was exactly what Wall Street was expecting. The bigger question was where the Fed is heading next. There, the Fed gave a hint it may not hike rates much more as it assesses the fallout from the banking industry’s crisis.

Instead of repeating its statement that “ongoing increases will be appropriate,” the Fed said Wednesday that it now only sees “some additional policy firming may be appropriate.” Chair Jerome Powell emphasized the shift to ”may” from “will.”

The Fed also released the latest set of projections from its policy makers on where rates are heading in upcoming years. The median forecast had the federal funds rate sitting at 5.1% at the end of this year, up only a smidge from where it currently sits, in a range of 4.75% to 5%

That’s also the same level as seen in December, and it’s counter to worries in the market that it could rise given how stubborn high inflation has remained.

That helped to send yields slumping in the bond market, which has been home to some of the wildest action this month.

The yield on the two-year Treasury, which tends to track expectations for the Fed, tumbled to 3.96% from 4.13% just before the projections were released. It was above 5% earlier this month.

Some of this month’s slide also came from building hopes for rate cuts later this year by the Fed. Such cuts can boost prices for stocks, bonds and other investments while giving the economy more room to breathe. They also, though, can give inflation more fuel.

Powell said Wednesday the Fed is still focused on getting inflation down to its 2% goal and that it is not envisioning any rate cuts this year. He also said the Fed could begin raising rates again, even after it takes a pause, if high inflation makes that necessary. That took some momentum out of the market.

Economic “indicators are still pretty resilient,” said Sameer Samana, senior global market strategist for Wells Fargo Investment Institute. “For markets to still speculate on rate cuts, it’s probably not going to take place this year if the Fed has its way.”

“There were a good dozen or so instances where he kept bringing it back to inflation. For better or worse, he was pretty consistent.”

The Fed was stuck with a difficult decision as it balanced whether to keep hiking rates to drive down inflation or ease off the increases given the pain it’s already caused for the banking industry, which could drag down the rest of the economy. The second- and third-largest U.S. bank failures in history have both occurred in the last two weeks.

A worry is that too much pressure on the banking system, particularly among the smaller and mid-sized banks at the center of investors’ crosshairs, would mean fewer loans made to businesses across the country. That in turn could mean less hiring and less economic activity, raising the risk of a recession that many economists already see as high.

Powell said such a pullback in lending could act almost like a rate hike on its own. And that was one of the reasons the Fed opted to raise by only 0.25 points Wednesday instead of 0.50 points. He also said that he sees the banking system overall as strong and sound.

Markets around the world have pinballed sharply this month on worries the banking system may be cracking under the pressure of much higher rates. They found some strength recently after Yellen indicated on Tuesday the government may back depositors at more weakened banks if the system is at risk.

That could mean making sure even customers with more than the $250,000 limit insured by the Federal Deposit Insurance Corp. can get all their money. On Wednesday, though, Yellen said that she wasn’t considering blanket protections for all depositors at all banks, only for those “when it’s deemed to be a systemic risk.”

Stocks of smaller- and mid-sized banks fell sharply. First Republic Bank dropped 15.5%, and PacWest Bancorp. fell 17.1%.

Some of the biggest excitement was around what are called “meme stocks.”

GameStop shot up 35.2% after it reported a surprise profit for its latest quarter. Analysts were expecting another loss for the struggling video-game retailer.

The stock rocked Wall Street in early 2021 when hordes of smaller-pocketed and novice investors piled into it, sending its price surging and inflicting big losses on hedge funds that had bet on its decline.

All told, the S&P 500 fell 65.90 points to 3,936.97. The Dow dropped 530.49 to 32,030.11, and the Nasdaq fell 190.15 to 11,669.96.

ASX 200 expected to edge lower​

The Australian share market is expected to edge lower on Thursday. According to the latest SPI futures, the ASX 200 is expected to open the day 52 points or 0.7% lower this morning.

Stocks fell sharply Wednesday after the Federal Reserve indicated the end may be near for its economy-crunching hikes to interest rates, but it also doesn’t expect to cut rates anytime soon despite Wall Street’s hopes.

The S&P 500 fell 1.6% for its first drop in three days. The Dow Jones Industrial Average lost 530 points, or 1.6%, while the Nasdaq composite dropped 1.6%.

All told, the S&P 500 fell 65.90 points to 3,936.97. The Dow dropped 530.49 to 32,030.11, and the Nasdaq fell 190.15 to 11,669.96


MARKET WATCH

 

[bigdog]

Asian shares fall on banking turmoil, recession worries

Shares have fallen in Asia as worries over turmoil in the banking sector and the risks of recession overshadowed gains on Wall Street.

apnews.com

Stocks tick higher after another dizzying day on Wall Street​

By STAN CHOE

Stocks rose Thursday, but only after another dizzying day for Wall Street where a big show of strength from the morning vanished and worries rose about the banking industry.

The S&P 500 added 0.3% for its third gain in four days, but it had been on track for a much healthier gain of 1.8% in the morning. The Dow Jones Industrial Average saw an early gain of 481 points disappear, and it likewise dipped to a brief loss before closing with a rise of 75 points, or 0.2%. Strength for technology stocks helped the Nasdaq composite hold up better than the rest of the market, and it added 1%.

Two big questions have been causing big swings for Wall Street this month, and investors still don’t have a final answer for either. On one, investors are worried about whether more banks will suffer a debilitating exodus of customers following the second- and third-largest U.S. bank failures in history. On the other, all the turmoil is clouding the outlook for what the Federal Reserve will do with interest rates after hiking them to market-rattling heights over the last year.

“Until these two clouds get resolved, it’s hard to see the market making any sustained headway,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management.

“I do think it’s something where it could calm down on its own,” Ma said about the crisis pounding the banking industry, “and I hope that it does. But it’s not clear why that would happen” without more forceful action from the government.

A day earlier, stocks fell sharply after the Federal Reserve indicated that while the end may be near for its hikes to interest rates, it still doesn’t expect to cut rates this year. Fed Chair Jerome Powell also insisted the Fed could keep raising rates if inflation stays high.

Traders on Thursday nevertheless were still largely betting the Fed will cut rates later this year. Such cuts can act like steroids for markets, juicing prices for stocks, bonds and other investments. They would relax the pressure on the banking industry and economy, but they could also give inflation more fuel.

Big technology and other high-growth stocks that tend to benefit the most from lower rates were among the strongest on Wall Street. Nvidia rose 2.7%, and Microsoft gained 2%

Markets were also still mulling comments from Treasury Secretary Janet Yellen that may have helped drag down bank stocks on Tuesday.

She said the government is not considering blanket protections for all customers at all banks. That may have disappointed some investors hoping for a more comprehensive solution. But Yellen did say the government will make all depositors whole at banks on a case-by-case basis, when failing to do so would mean risk for the broader system.

Implicit in that is perhaps the hint that any bank failure could be seen as such a systemic risk. Failures at both Silicon Valley Bank and Signature Bank met that criteria. Depositors were promised all their money, even those with more than the $250,000 limit insured by the Federal Deposit Insurance Corp.

Still, investors likely need to hear something more concrete to be sure, said Ma.

“The reality is that until there’s a belief that, at least in the near term, all deposits are protected, the economy remains at much greater risk than it needs to be,” he said

“If someone has deposits at” a bank seen as weak “and the stock is going down, why not pull your deposits, because we don’t know if those deposits will be guaranteed by the FDIC,” he said. “If any other prominent midsized banks go under and the deposits are not guaranteed, then all hell breaks loose.”

Stocks in the financial industry ended up being the heaviest weight on the S&P 500 despite rising in the morning. First Republic Bank, which has been at the center of investors’ crosshairs the last couple weeks, fell 6% after giving up a gain of nearly 10%.

The fear is that all the turmoil in the banking industry could cause a sharp pullback in lending to small and midsized businesses around the country. That could put more pressure on the economy, raising the risk for a recession that many economists already saw as likely.

The Fed’s Powell said such fears were part of the reason the central bank raised rates by only a quarter of a percentage point Wednesday instead of more. A pullback in lending could act almost like a rate hike on its own, he said.

In markets abroad, stocks in London fell 0.9% after the Bank of England also raised its key rate by a quarter of a percentage point. Stocks were mixed elsewhere across Europe and Asia.

On Wall Street, shares of Coinbase Global fell 14.1% after the cryptocurrency trading platform said it had been warned by the Securities and Exchange Commission that it could face charges of violating U.S. securities laws.

All told, the S&P 500 rose 11.75 points to 3,948.72. The Dow gained 75.14 to 32,105.25, and the Nasdaq climbed 117.44 to 11,787.40.

In the U.S. bond market, which has been home to some of Wall Street’s wildest moves this month, yields fell.

The yield on the two-year Treasury dropped to 3.81% from 3.97% late Wednesday. It was above 5% earlier this month.

ASX 200 expected to fall again​

The Australian share market looks set to end the week on a subdued note following a mixed night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 39 points or 0.55% lower this morning.

Stocks rose Thursday, but only after another dizzying day for Wall Street where a big show of strength from the morning vanished and worries rose about the banking industry.

The S&P 500 added 0.3% for its third gain in four days, but it had been on track for a much healthier gain of 1.8% in the morning. The Dow Jones Industrial Average saw an early gain of 481 points disappear, and it likewise dipped to a brief loss before closing with a rise of 75 points, or 0.2%. Strength for technology stocks helped the Nasdaq composite hold up better than the rest of the market, and it added 1%.

All told, the S&P 500 rose 11.75 points to 3,948.72. The Dow gained 75.14 to 32,105.25, and the Nasdaq climbed 117.44 to 11,787.40.

MARKET WATCH

 

[bigdog]

Wall Street ends higher, marking 2nd winning week in a row

Stocks shook off a weak start and ended higher on Wall Street even as worries about banks on both sides of the Atlantic continue to weigh on markets.

apnews.com

Wall Street ends higher, marking 2nd winning week in a row​

By STAN CHOE and ALEX VEIGA

A late-afternoon turnaround on Wall Street left stocks higher Friday as the market shook off a weak start amid worries about banks on both sides of the Atlantic.

The S&P 500 rose 0.6% after slipping for most of the morning. The benchmark index marked its second straight weekly gain. The Dow Jones Industrial Average rose 0.4%, while the Nasdaq composite ended 0.3% higher.

The upbeat close to the week came as markets have been turbulent on worries that banks are weakening under the pressure of much higher interest rates. That’s led to rising concerns about a possible recession and heavy uncertainty about what the Federal Reserve and other central banks will do with interest rates going forward.

“There are concerns out there about, obviously, a more severe bank crisis, both domestically and in Europe, and yet somehow markets are looking past that,” said Randy Frederick, managing director of trading & derivatives at Charles Schwab.

On Friday, much of the focus was on Deutsche Bank, whose stock tumbled 8.5% in Germany. Earlier this month, shares of and faith in Swiss bank Credit Suisse fell so much that regulators brokered a takeover of it by rival UBS.

Credit Suisse faced a relatively unique set of longstanding troubles. But the second- and third-largest U.S. bank failures in history earlier this month have cast a harsher spotlight across the entire banking industry.

Other big European banks also fell Friday, including a 5.5% drop for Germany’s Commerzbank, a 5.3% fall for France’s BNP Paribas and a 3.5% loss for UBS.

Bank stocks ended mixed on Wall Street. JPMorgan Chase fell 1.5%, while Bank of America rose 0.6%.

In the U.S., the hunt by investors has primarily been for banks that could face a debilitating exodus of customers, similar to what helped cause the failures of Silicon Valley Bank and Signature Bank.

Investors have zeroed in on smaller and midsized banks, the ones below in size of the “too-big-to-fail” banks and seen as greater risks.

First Republic Bank closed 1.4% lower. It’s down 90% for the year.

Treasury Secretary Janet Yellen has said that in cases where the government sees a risk to the overall system, it will guarantee deposits for bank customers, even those with more than the $250,000 insured by the Federal Deposit Insurance Corp. That’s what regulators did for both Silicon Valley Bank and Signature Bank.

But Yellen this week also stopped short of a blanket guarantee for all depositors at all banks.

Cash-short banks were still lining up this week to borrow money from the Fed. The Fed said Thursday that emergency lending to banks fell slightly in the past week – to $164 billion – but remained high.

A big worry is that all the pressure on banks will cause a pullback in lending to small and midsized businesses across the country. That in turn could lead to less hiring, a weaker economy and a higher potential for a recession that many economists already saw as likely.

While the job market has remained remarkably solid, other parts of the economy have already begun to weaken under the weight of higher rates. On Friday, reports on the economy came in mixed. One showed orders for long-lasting manufactured goods were slower last month than economists expected.

A second report, though, suggested the fastest uptick in business activity for almost a year. The preliminary report from S&P Global topped economists’ expectations.

Federal Reserve Chair Jerome Powell said worries about a pullback in lending helped push the Fed to raise rates by only a quarter of a percentage point this week, instead of a more aggressive half point, in its campaign to battle inflation.

Higher rates can undercut inflation by slowing the entire economy, but they raise the risk of a recession. They also hurt prices for stocks and other investments. For Silicon Valley Bank and other banks, that meant hits to the super-safe Treasury bonds they owned.

The Fed has raised its key overnight interest rate to a range of 4.75% to 5%, up from virtually zero at the start of last year. It’s hinted it may raise rates one more time before holding them there through the end of the year.

Traders are more skeptical, though. The rising possibility of a recession has them betting heavily that the Fed will have to cut interest rates as soon as this summer to release some of the pressure on banks and the economy.

“Whether or not that happens, I don’t know, and obviously these things change a lot, but I would say there’s a very reasonable probability to say that rates right now may be as high as they’re going to go and we may just go sideways for a while,” Frederick said.

Such speculation has added to an increased drive by investors to pile into anything seen as safe, which together have caused huge, sometimes violent swings in the bond market.

On Friday, yields fell further. The 10-year yield, which helps set rates for mortgages and other loans, fell to 3.38% from 3.42% late Thursday. It was above 4% earlier this month.

The drop has been even more dramatic for the two-year Treasury yield, which more closely tracks expectations for the Fed. It sank to 3.77% from 3.83% late Thursday and from more than 5% earlier this month.

All told, the S&P 500 rose 22.27 points to 3,970.99. The Dow added 132.28 points to 32,237.53. The Nasdaq gained 36.56 points to close at 11,823.96.

Small company stocks outgained the broader market. The Russell 2000 index rose 14.63 points, or 0.9%, to 1,734.92.