First Republic Bank Tumbles, S&P 500 Volatility Continues Ahead Of Next Week's Critical Federal Reserve Meeting
The SPDR S&P 500 ETF Trust SPY rebounded in a volatile week of trading as investors monitored ongoing instability among U.S. regional banks.
Following the failures of regional banks SVB Financial Group SIVB, Signature Bank SBNY and Silvergate Capital Corp SI, concerns over the health of First Republic Bank FRC and Credit Suisse Group AG CS took the spotlight in recent days.
First Republic shares tumbled more than 25% on Friday even after a group of fellow banks committed to providing $30 billion in deposits to boost its liquidity. Credit Suisse shares also sold off sharply on the week as traders digested news that the company will borrow up to $54 billion from the Swiss National Bank to provide short-term liquidity.
Related Link: First Republic Bank’s $30B Lifeline Reportedly Put Together By Yellen, Powell, Dimon
On Tuesday, the Labor Department reported the consumer price index gained 6% year-over-year in February, down from a 6.4% increase in January and in-line with economist estimates. Core CPI inflation, which excludes volatile food and energy prices, was 5.5% in February, also matching economist estimates.
On Wednesday, the Wall Street Journal reported the Biden administration has warned Chinese TikTok parent company ByteDance it must sell its stake in TikTok or face a potential ban in the U.S. News of a possible TikTok ban triggered a rally in competing social media stocks, including Snap Inc SNAP and Facebook parent Meta Platforms Inc (NASDAQ: META).
Related Link: U.S. Threatens To Ban TikTok If Chinese Founder Doesn’t Sell Ownership Stake
Bitcoin BTC/USD rallied throughout the week, climbing above the $26,000 mark following news the Federal Deposit Insurance Corporation would ensure all depositors with accounts at SVB and crypto-focused Signature Bank.
On The Struggle Bus: Proterra Inc PTRA shares dropped more than 50% on Thursday after the electric bus maker said it delivered just 199 buses in 2022 and issued a “going concern” warning to investors.
In the week ahead, investors will get more quarterly reports from PDD Holdings Inc – ADR PDD on Monday, Nike Inc NKE and GameStop Corp. GME on Tuesday and Chewy Inc CHWY on Wednesday.
Analysts have a higher percentage of “buy” ratings (63%) for stocks within the S&P 500 Energy sector than any other sector, according to FactSet.
Economic Numbers: Following the February CPI inflation data, Wall Street will get more key economic updates on Monday when the People’s Bank of China announces its latest interest rate decision and on Wednesday when the Federal Reserve releases its own interest rate decision, updated economic projections and related commentary.
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