Client Login

The U.S. Stock Markets Report for March 17th, 2023

On Thursday, the U.S. stock markets recovered from early losses to finish considerably higher. All three main stock indices ended the day in the black.

Investors’ trust in the U.S. and global banking system has been restored, more than offsetting the impact of an unexpectedly large rate rise by the European Central Bank. The economic data was inconsistent.

How Effective Were The Benchmarks?

The DJIA finished the day up 371.98 points, or 1.2%, at 32,246.55. The blue chip index dropped more than 300 points throughout the day. Of the 30 stocks comprising the index, 26 finished higher and 4 ended down.

Nasdaq Composite, which is heavily weighted by technology firms, gained 2.5%, or 283.22 points, to end the day at 11,717.27. The S&P 500 index closed up 1.8% at 3,960.28. The benchmark index saw gains in all 11 of its major categories at the market close.

The Financials Select Sector SPDR (XLF), the Technology Select Sector SPDR (XLK), and the Consumer Discretionary Select Sector SPDR (XLY) all had gains of 1.9 percent or more.

The CBOE Volatility Index (VIX), a measure of market anxiety, dropped 12.1% to 22.99. On Thursday, more than 12.8 billion shares changed hands, which is above the 20-day moving average of 11.90 billion. On the New York Stock Exchange, rising stocks outpaced falling ones 2.80 to 1. There was a 1.95-to-1 ratio in favor of rising stocks on the Nasdaq.
Stability in the Banking Industry

The ECB’s move to cut interest rates by 50 basis points sent U.S. stock markets tumbling in early trade. The ECB is the central bank of the 20 countries that make up the Eurozone. With recent disruptions in the international banking system, most economists and financial analysts predicted a smaller rate rise. Preliminary figures for Eurozone inflation in February showed a rate of 8.5%, far higher than the ECB’s goal rate of 2%.

The European Central Bank warns that inflation will stay too high for too long. As a result, the Governing Council of the European Central Bank voted today to raise the three main interest rates by 50 basis points each. Inflation is expected to average 5.3% in 2023, followed by 2.9% in 2024, according to the ECB’s projections.

First Republic Bank FRC was having trouble meeting its short-term commitments, but the situation altered in the second half of trade when it was announced that a group of 11 big U.S. banks would deposit $30 billion into the bank. As a result, First Republic’s stock price increased by 10%.

Silicon Velley Bank and Signature Bank, two large regional banks, both failed last week after huge amounts were withdrawn. Since the higher interest rate regime dried up capital raising sources from the market, the corporate customers of these banks withdrew deposits swiftly in order to operate their companies.

On March 15, Credit Suisse Group AG CS shook the world’s financial markets. The banking institution disclosed “some major shortcomings in our internal control over financial reporting for the years 2021 and 2022” earlier this week. More than $120 billion was removed from deposit accounts, the bank said in the fourth quarter of 2022. When asked to increase their investment in the Swiss institution, the Saudi National Bank rejected.

As the Swiss Financial Market Supervisory Authority and the Swiss National Bank issued a joint statement saying the bank “meets the capital and liquidity standards imposed on systemically significant institutions,” things began to calm down. The Swiss National Bank has also agreed to intervene if necessary. The Swiss National Bank will lend Credit Swiss up to $54 billion.

There is a Zacks Rank #3 on Swiss credit current (Hold). All of today’s stocks with a Zacks #1 Rank (Strong Buy) are available in this comprehensive list.

Leave a Reply

Your email address will not be published. Required fields are marked *

Privacy Settings
We use cookies to enhance your experience while using our website. If you are using our Services via a browser you can restrict, block or remove cookies through your web browser settings. We also use content and scripts from third parties that may use tracking technologies. You can selectively provide your consent below to allow such third party embeds. For complete information about the cookies we use, data we collect and how we process them, please check our Privacy Policy
Consent to display content from - Youtube
Consent to display content from - Vimeo
Google Maps
Consent to display content from - Google
Consent to display content from - Spotify
Sound Cloud
Consent to display content from - Sound