Topline
Major stock indexes fell on Thursday as shares of banks across the nation collapsed following a stark warning from one of Silicon Valley’s biggest lenders, which said it hopes to raise billions of dollars to help shore up cash during the challenging economy—adding to industry concerns stoked by the collapse of crypto bank Silvergate and the threat of rising interest rates.
Fefaatauaiga i luga o le fola o le New York Stock Exchange.
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Faʻamatalaga autu
Though it surged in early trading, the Dow Jones industrial average fell 543 points, or 1.7%, to less than 32,255 on Thursday, as the S&P 500 and tech-heavy Nasdaq shed 1.8% and 2.1%, respectively.
Dragging down sentiment throughout the day, Silicon Valley-based startup lender SVB Financial fai it sold $21 billion of its securities portfolio and hopes to raise nearly $2.3 billion to help bolster its financial position amid a “very challenging” market and interest rate environment that has led to lower customer deposits—an announcement that pushed shares down a staggering 60%.
Bank stocks—still reeling from the sudden sofa of crypto bank Silvergate this week—plunged on the news, with JPMorgan Chase, Bank of America and Wells Fargo falling about 6% apiece.
I se imeli, na taʻua ai e le na faavaeina le Vital Knowledge Adam Crisafulli ia Silvergate ma le SVB "tagata ua afaina i le mea lava e tasi," e pei o le taumafaiga a le Federal Reserve e tetee atu i le tau o le tamaoaiga "e tineia ai le fula mai vaega o le tamaoaiga ma le sili atu" -e aofia ai le crypto ma tekinolosi.
“Banks are the most important sector of the market,” Crisafulli added, noting sentiment in the industry can spread to other sectors because of banking’s role in financing operations, and also pointing out the focus on markets has “ominously” shifted to the financial health of institutions, with Silvergate’s collapse spurring concerns of more-stringent banking regulation.
The Labor Department’s looming jobs report on Friday also added to uncertainty on Thursday: “The stakes are so high,” says Commonwealth Financial Network’s Brad McMillan, who notes another strong report after January’s blowout would be good for the economy, but bad for the Fed, which could then be forced to raise rates more aggressively.
O le a le mea e matamata ai
On average, economists expect the labor market added about 225,000 jobs last month after a blockbuster 517,000 new jobs were created in January. Crisafulli says anything above 300,000 could force the Fed to accelerate the pace of interest rate hikes for the first time since May—“creating a whole fresh set of headwinds” for stocks.
Faʻamatalaga Faitauina
Crypto Bank Silvergate o le a Tapuni i le lotolotoi o tulaga tau tupe (Forbes)
Source: https://www.forbes.com/sites/jonathanponciano/2023/03/09/dow-plunges-over-500-points-as-bank-stocks-collapse/