But I'm looking at the XLF (SPDR Financial Select fund) too. Contagion is underpinned by fear and panic, and that’s more difficult to control than providing liquidity and covering depositors." "But the biggest fear right now is contagion. "You may hear an announcement from the Federal Reserve despite the fact that they are in a blackout period." "The KBW and the KRE are the bellwethers for the regional financial system, and what we're seeing now is they're still tanking." We're not seeing investors come in at these lower, perhaps compelling, valuations." "The problem is the Fed and government officials are doing everything they can in terms of liquidity and depositors being taken care of, but until these (bank) ETFs stabilize, what it indicates is that there's still a lack of confidence in the financial system. QUINCY KROSBY, CHIEF GLOBAL STRATEGIST, LPL FINANCIAL, CHARLOTTE, NORTH CAROLINA Treasuries and German Bunds fell sharply, while money markets quickly dialed back bets on the scope for further rate hikes from the Federal Reserve and the European Central Bank. Yields on safe-haven government bonds such as U.S. The S&P 500 Banking Index was down 6.3%, while the SPDR S&P Regional Banking (NYSE: KRE) ETF was down 11.6%.
In the United States, First Republic Bank (NYSE: FRC) tumbled by as much as 76.6% despite news it had secured fresh financing, while other regional banks also nosedived.įirst Republic had been able to meet withdrawal demands on Monday with the help of extra funding from JP Morgan Chase (NYSE: JPM), the mid-cap lender's Executive Chair Jim Herbert told CNBC, adding that it was not seeing a massive deposit outflow.Įurope's STOXX banking index closed 5.8% lower. banking system, after Silicon Valley Bank and Signature Bank (NASDAQ: SBNY) collapsed late last week.īiden's attempt to reassure markets and depositors came after emergency measures by the United States to guarantee deposits at tech-focused lender SVB failed to dispel investor worries about potential contagion to other banks worldwide. (Reuters) - Bank stocks around the world plunged on Monday even as President Joe Biden vowed to take whatever action was needed to ensure the safety of the U.S. Create New Watchlist Create Create a new holdings portfolio Add Create + Add another position Close
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