A tumultuous week in the U.S. financial markets ended on an uncertain note Friday after a massive $30 billion injection of big-bank deposits into First Republic Bank failed to calm investors.
Last week, the sudden meltdown of three U.S. banks – Silvergate Capital, Signature Bank SBNY,
SVB Financial Group SIVB,
In a matter of days, other regional banks and financial firms have been swept up in the selloff.
First Republic Bank FRC,
In Europe, shares of Swiss banking giant Credit Suisse CS,
Here’s a look at big swings across financial markets in roughly the past week.
Shares of the SPDR S&P Regional Banking ETF KRE,
The Treasury, FDIC and Federal Reserve on Sunday announced guarantees for all deposits at Silicon Valley Bank and Signature Bank to shore up confidence in the banking sector.
Shares of the SPDR S&P Regional Banking ETF slumped 6% on Friday. Shares of First Republic Bank declined 32.8%, after the $30 billion deposit influx failed to calm jittery investors.
A selloff in bank stocks pulled down the broader stock market, leaving the S&P 500 Index SPX,
The S&P 500 finished 1.1% lower on Friday, but gained 1.4% for the week, according to Dow Jones Market Data. It was up 2% for the year as of Friday.
The Nasdaq Composite Index COMP,
The jump in the biggest technology and semiconductor names helped constrain losses on the Nasdaq 100 index, which tracks the top 100 technology companies on the Nasdaq Stock Exchange.
The Nasdaq Composite Index COMP,
See: Microsoft, Apple and Meta outperform as investors seek safety in megacap tech stocks
The bond market also had a week of extremes. The yield on the 2-year Treasury note TMUBMUSD02Y,
See: Why bond-market volatility is at its highest since the 2008 financial crisis amid rolling fallout from banks
Adding to its swings, February’s CPI report showed little progress on cooling off high inflation, which failed to subside ahead of the weekend. The policy-sensitive 2-year Treasury yield fell 28.4 basis points to 3.846% on Friday. That was the lowest level since Sept. 14, 2022.
Trading in the fed-futures market also has been choppy, with odds on Friday showing a 40% chance of no Fed rate hike in its meeting next week and a 60% probability that policy makers will raise rates by another 25 basis points to a range of 4.75%-5%, according to CME FedWatch tool.
Gold prices surged 8.1% in the past seven trading days, finishing at their highest levels in 11 months on Friday and booking their best weekly gain in nearly three years, according to Dow Jones Market Data. Fears of potential further stress in the banking sector weighed on investors’ sentiment, bolstering the safe-haven appeal of the yellow metal.
Gold futures for April delivery GC00,
The ICE U.S. Dollar Index DXY,
The dollar index bounced on Wednesday morning as Credit Suisse liquidity concerns revived concerns about risks in the global banking system, sparking safe-haven buying of the dollar.
Oil futures tumbled with the most-active U.S. contract finishing at the lowest level in 15 months and booking its biggest weekly drop in nine months, according to Dow Jones Market Data.
The U.S. benchmark West Texas Intermediate crude for April delivery CL00,
The contract declined by 14.2% in the past seven trading sessions, according to Dow Jones Market Data.
The price of Bitcoin took a hit last Wednesday when Silvergate Capital Corp . SI,
However, following the failures of SVB and Signature Bank, bitcoin rallied over 20% in the past nine sessions, to trade at $26,750.50 on Friday, according to CoinDesk data.
Bitcoin has long been viewed with skepticism by the financial establishment, but its supporters have argued it represents an alternative to the traditional banking system.
See: What happened to Silvergate Capital? And why does it matter?