Operators of the New York Stock Exchange (GETTY IMAGES NORTH AMERICA/AFP/SPENCER PLATT)
The New York Stock Exchange ended lower on Friday, hurt by the bankruptcy of the American bank SVB and the fear of possible contagion, which prevailed on the feeling that the American central bank (Fed) will have the upper hand. lighter than feared.
The Dow Jones lost 1.07%, the Nasdaq index dropped 1.76% and the broader index fell 1.45%.
The session was punctuated by the setbacks of the Californian establishment Silicon Valley Bank (SVB), whose listing was suspended before the opening.
At the end of the morning, the American deposit guarantee agency, the FDIC, announced that it had taken control of the bank, which amounts to bankruptcy.
Subject to significant withdrawals from clients, including many start-ups and private equity funds in the technology sector, SVB will not have managed to raise capital to strengthen its balance sheet as it announced on Wednesday.
In a statement sent to AFP, the Nasdaq, on which SVB was listed, indicated that the intervention of the FDIC was “the equivalent of a bankruptcy filing, which justifies a delisting” for the title. form the bank.
This means that the value of the securities will fall to zero and erase the market capitalization of the company, which was still valued over $16 billion on Tuesday evening.
Shaken by this development, several medium-sized or regional banks suffered on Friday, fleeing from wary investors.
Among them First Republic (-14.84%), 14th American institution by asset size.
The profile of the bank is particularly worrying because its clientele is mainly made up of wealthy individuals and businesses, whose deposits exceed $250,000 guaranteed by the federal deposit protection agency, the FDIC.
Also battered, Signature Bank (-22.87%), which has activities in California, or Western Alliance (-20.88%), based in Phoenix (Arizona).
Asset manager Charles Schwab (-11.69%) was the only major financial institution to ostensibly drop out, while JPMorgan Chase (+2.54%) and Wells Fargo (+0.56%) even finished in the green.
“This is the second day of concern around the banking sector, with questions about whether this represents systemic risk,” commented Angelo Kourkafas of Edward Jones. “The answer is probably no, but (investor) confidence is a bit shaken.”
A sign of a marked resurgence of nervousness, the VIX index, which measures market volatility, rose on Friday to a level not seen for four months.
For the analyst, this development and the macroeconomic indicator of the day “show that we are beginning to feel the effect of the monetary tightening of the Fed on the markets and the economy”.
Before the opening, the US Department of Labor had thus reported 311,000 job creations in February, more than the 225,000 expected, but also an unemployment rate on the rise, to 3.4% against 3.6 % in January.
In addition, the average salary increased by 0.2% over one month, less than the 0.3% projected by economists, which was the figure recorded in January.
This picture of an American economy shaken by the rise in interest rates should push the Federal Reserve to abandon a half-point increase in its key rate at its next meeting, a hypothesis mentioned this week by its President, Jerome Powell.
“As long as we don’t see a surge in inflation” in the CPI report on the evolution of consumer prices in February, due Tuesday, “the Fed should remain on a rate of increases of a quarter point ” percentage per meeting, advanced, in a note, Edward Moya, of Oanda.
This vision of a less aggressive than expected Fed and the climate of generalized risk aversion boosted bonds, which jumped on Friday. Their rates, which move in the opposite direction to their prices, have plunged.
The yield on 10-year US government bonds fell to 3.68%, its lowest level for almost a month, against 3.90% the day before closing.
As for the 2-year rate, which had soared until mid-week, it fell to 4.57%, more than half a percentage point below its level on Wednesday, an extremely rare variation. in this market.
© 2023 AFP
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