market report
Status: 03/24/2023 07:36 a.m
At the end of a turbulent week, the DAX is likely to start the trading day again with losses. Despite the turbulence, the weekly balance sheet is still relatively strong.
The broker IG appraised the leading German index before the start of trading 0.6 percent lower to 15,122 points. Investors should not be “lulled” by the tense calm, wrote market expert Stephen Innes of SPI Asset Management. The stress in the banking industry will keep the markets busy.
On a weekly basis in the plus
Yesterday, the DAX closed stable at 15,210 points, but was initially deep in the red and reached a daily low of 15,078 points. After the emergency rescue of Credit Suisse by UBS, the weekly low was 14,458 points on Monday, the lowest level since the first week of trading in January. Thanks to the strong recovery, the DAX is currently up almost 3 percent on a weekly basis.
Slight recovery on Wall Street
The US stock exchanges went on a cautious recovery course yesterday: the Dow Jones gained 0.2 percent to 32,105 points. The tech-heavy Nasdaq was up one percent to 11,787 points and the broad-based S&P 500 was up 0.3 percent to 3949 points.
In the absence of clear signals from the US Federal Reserve that interest rates would be paused amid the banking turmoil, investors retreated on Wednesday. Investors are now more confident that the interest rate peak is within reach, market participants said.
Yellen without blanket deposit security guarantee
Meanwhile, US Treasury Secretary Janet Yellen has once again expressed reassurance about the banking situation. She assured that the banking system is sound. The US bank regulator and the Treasury Department are ready to take on comprehensive deposit insurance for other banks, as they did with the failed Silicon Valley Bank and Signature Bank.
However, it still failed to provide a blanket guarantee for bank balances in US banks above the current limit of $250,000 that bankers and Wall Street were hoping for. However, their latest statements suggested more explicitly than before that further guarantees for uninsured deposits would come in the form of bailouts for individual bank depositors when their problems threatened to trigger a run on other banks.
Weak markets in Asia
In Asia, the leading Japanese index, the Nikkei, closed 0.1 percent lighter at 27,385.25 points. Data released today showed that manufacturing activity in Japan contracted for the fifth consecutive month in March, providing further evidence of faltering global demand. The Shanghai stock exchange was down 0.6 percent. The index of the most important companies in Shanghai and Shenzhen lost 0.4 percent.
US authorities are investigating Credit Suisse and UBS on Russia sanctions
According to a media report, the US authorities are investigating Credit Suisse and UBS, among others, in connection with any help for Russian oligarchs in circumventing sanctions. In addition to the two major banks, the Justice Department is also dealing with employees of some US financial institutions, the Bloomberg agency reported, citing people familiar with the matter. The corresponding letters with requests for information were sent before the takeover of Credit Suisse.
Fugitive crypto broke Do Kwon arrested
Police in Montenegro have arrested fugitive cryptocurrency founder Do Kwon. Kwon created the cryptocurrencies Terra and Luna in Singapore. However, the Terra-Luna system collapsed spectacularly in May last year. Investors went away empty-handed. The bankruptcy is said to have caused losses of $40 billion.