More shopping on Wall Street: at about 4 pm Italian time, the Dow Jones rose by 0.38%, the S&P 500 advanced by 0.62%, the Nasdaq Composite strengthened by more than 0.70%.
Bank crisis just a parenthesis? Investors and traders believe it or, at least, hope for it. This can be clearly seen from the trend of the US stock market, where the violent turbulence of the last two weeks has given way to a decidedly calmer performance.
Focus in particular on the ETF that replicates the trend of US regional bank stocks, the SPDR S&P Regional Banking ETF (KRE).
The ETF had been overwhelmed by a wave of sell-offs following the news of the collapse of Silicon Valley Bank, then further sunk by the worries that infected Europe, causing the collapse before Credit Suisse – eventually bought by rival UBS – , then by Deutsche Bank.
The reassurances of the market authorities, primarily the Fed and the ECB, on the solidity of their respective banking systems, had the desired effect.
For some sessions now, we have witnessed the return of ‘normal’ movements on the world stock indexes.
Purchases of US regional bank stocks saw the SPDR S&P Regional Banking ETF (KRE) jump more than 7% from its lows tested Friday, March 23, of $42.24.
The signals that seem to indicate the conviction of investors according to which the worst is behind us also see the so-called index of fear as the protagonist, i.e. the volatility index CBOE Volatility Index which, after having jumped up to 30 points in mid-March, is retreated to 19.
The comeback of technological stocks, which had already begun at the beginning of this year, was such as to have led the US Nasdaq 100 stock index to return to the bull market, in the session the day before yesterday, Wednesday 28 March, for the first time in almost three years. Merit of the buys that have taken place on Big Tech USA of the caliber of Apple, Microsoft and Amazon.
The Nasdaq 100 continues to be the undisputed champion of the markets when you consider that Wall Street’s benchmark stock, the S&P 500 Index, has risen just 4.9% this year, and the Dow Jones Industrial Average has fallen l ‘1.3%.
Yesterday, the Nasdaq Composite jumped 1.8% and the S&P 500 and Dow Jones rose 1.4% and 1%, respectively.
The buys have taken place both on the securities of Big Tech USA and on the securities of the banks.
In today’s session, before the start of the session, the US GDP data for the fourth quarter of 2022 was announced.
The US gross domestic product trend was revised slightly downwards, to a growth rate of 2.6% on an annual basis from +2.7% initially announced to +2.6%.
The consensus had forecast an expansion at the rate of 2.7%, after growth of +3.2% in the third quarter of 2022.
From the data relating to the GDP of the United States it emerges that the trend of personal consumption has been revised downwards, from the previously widespread 1.4% increase to +1%;
inflation as measured by the core component of the PCE price index was revised upwards to +4.4% from +4.3% previously communicated.
Headline inflation as measured by the PCE index was confirmed at a year-on-year pace of 3.7%.
The report on initial claims for unemployment benefits was also released in the United States, which showed that, in the week ending last March 25, the number of US workers who applied for benefits rose by 7,000 units, at 198,000.
The level, slightly higher than the 195,000 units expected by the consensus, remains rather low, a factor which leads us to think that the United States labor market has not deteriorated to the point hoped for by Jerome Powell’s Federal Reserve, and therefore to the point of the growth of inflation. In this regard, the rates of US Treasuries, which had sunk in the most tense days in which the sales on Wall Street started, have already recovered ground. Today, 10-year Treasury rates rise to 3.577%, while two-year rates strengthen to 4.124%.