Rate hike fed 2018

NEW YORK  – U.S. stocks jumped on Monday after a deal to rescue Credit Suisse and central bank efforts to bolster confidence in the financial system relieved investors, while participants also weighed the likelihood of a pause in rate hikes from the Federal Reserve this week. UBS late on Sunday agreed to buy rival Credit Suisse for $3.23 billion, in a merger engineered by Swiss authorities to avoid more turmoil in the banking group. Also, major central banks moved on Sunday to bolster the flow of cash around the world. Global central banks open daily dollar taps to help banks The S&P Banking index was up 0.6 percent and the KBW Regional Banking index was up 1.5 percent following sharp losses last week. The collapse of Silicon Valley Bank and Signature Bank shook markets earlier this month, leading to a rout in banking stocks and worries that central bank monetary tightening would create a recession. While some bank shares were still lower on Monday, the … [Read more...] about Wall St ends higher as bank contagion fears ease, Fed eyed

Share to Twitter Share to Linkedin Key Takeaways UBS Buying Credit Suisse Bitcoin Rally Fed Meeting Up In The Air Following a week of turmoil in the banking sector, stock indices managed to close the week in the green on Friday. For the week, the S&P 500 was up just under 1.5% while the Nasdaq Composite jolted higher by nearly 4.5%. With concerns over banks still lingering and a Fed announcement on interest rates coming on Wednesday, markets may be headed for more choppy trading. Over the weekend, UBS agrees to buy Credit Suisse in a $3 billion deal. However, some of the more risky bond positions there are going to be a total loss which will cost investors a significant amount of money. Therefore, I’ll be watching the bond market closely for any after-effects. A byproduct of the banking crisis has been a flight to safety in U.S. Treasuries. That has, in turn, led to lower interest rates. After hitting a recent high water mark over … [Read more...] about Banking Stocks And The Fed

Photo courtesy of Bangko Sentral ng Pilipinas Facebook Page MANILA  – The Bangko Sentral ng Pilipinas (BSP) is expected to raise its policy rate by 25 basis points or 0.25 percentage point to 6.25 percent on March 23 amid lingering concerns about the health of the global financial system. This will represent a slower tightening that, according to ING Bank, might pave the way for a likely pause of hikes in May. Before the latest policy meeting scheduled on Thursday, the Monetary Board (MB) went for hikes of 0.5 ppt on two previous occasions—February and December 2022. This, in turn, followed a 0.75-ppt hike in November last year. Since starting the tightening cycle last May, the BSP’s key rate has risen by 4 ppt from a pandemic-prompted historic low of 2 percent. Commitment Nicholas Mapa, senior economist at ING Bank, said a smaller rate hike this week will serve as an “insurance” considering that inflation remained well-above the government’s target range at 8.6 percent in … [Read more...] about BSP tipped to raise key rate to 6.25%

Share to Twitter Share to Linkedin Gold prices are closing in on an all-time high above $2,000 an ounce. This pair of MoneyShow contributors weighs in on what’s behind the move – and how investors can profit! Sean Brodrick , Weiss Ratings Daily The banking problems started by Silicon Valley Bank are far from over. Depositors are still fleeing smaller banks, figuring they might be facing the same problems as the banks that failed. The ongoing crisis supports gold. One reason is because gold is a safe haven. But it’s also due to another reason … it’s now harder for the Federal Reserve to raise rates! In a week, there has been a huge shift in Wall Street’s bets on the Fed raising rates. Goldman Sachs (GS) expects there to be no rate hike at all. Global financial services group Nomura Holdings (NMR) boldly expects the Fed to CUT at its March 21-22 meeting — something that did not seem possible last week. Even if the Fed hikes … [Read more...] about Why It’s Gold For The Win – And How You Can Profit

SINGAPORE  – Asian stocks were lifted from lows on Tuesday, with the rescue of Credit Suisse stemming selling in bank shares, though the mood was fragile and the stress in markets had traders wondering whether U.S. rate hikes might be finished. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 percent in early trade. Australian shares bounced 1.3 percent from Monday’s four-month trough and the Hang Seng opened 0.7 percent higher. Japanese markets were closed for a holiday, though Chicago-traded Nikkei futures were in the green. Overnight an early selloff in Europe was reversed and on Wall Street the S&P 500 rose 0.9 percent. U.S. futures rose 0.2 percent in early Asia trade. Wall St ends higher as bank contagion fears ease, Fed eyed A Swiss government-backed buyout of Credit Suisse by UBS has cauterized the immediate concern over European financial stability. But the wipeout of some Credit Suisse bondholders has sent a shockwave through bank debt, … [Read more...] about Asia stocks bounce gingerly but bank fears lurk

SINGAPORE  – The dollar regained some ground on Tuesday but was pinned near a five-week low as traders tiptoed back into riskier assets after UBS’ state-backed takeover of Credit Suisse allayed some fears of a widespread, systemic banking crisis. Market sentiment remained fragile, however, as investors struggled to determine the scale of the ramifications from a sector hit that began with Silicon Valley Bank’s collapse, putting a cap on risk appetite and giving some support to the safe haven dollar. Sterling rose 0.02 percent to $1.2280, while the euro steadied at $1.0722. The Aussie fell 0.22 percent to $0.6703. News of UBS’ planned takeover of rival Credit Suisse on Sunday – a shotgun merger engineered by Swiss authorities – gave way to a small risk-on rally on Monday, as worries over market-shaking turmoil across global banks waned. Switzerland’s secretive Credit Suisse rescue rocks global finance “Markets remain nervous, but the rapidity of policymakers’ … [Read more...] about Dollar languishes as bank crisis fears ebb on Credit Suisse rescue

Share to Twitter Share to Linkedin For the decade that preceded 2022, the acronym TINA (There Is No Alternative) applied well to stocks . As central banks used every excuse to flood the system with liquidity, yields were driven to zero, and it seemed that the only way to get any return was to buy stocks. Investors gorged on index funds, and passive ETFs overtook actively managed investments. Alas, as central banks realized that inflation, long thought dead, was a real problem, and raised interest rates aggressively, yield curves inverted to historic levels, making short duration Treasury Bills the only safe, viable investment alternative, leading to “TINAC” (There Is No Alternative To Cash). But inverted yield curves are not a stable healthy state of affairs for economies, and as expected, have eventually resulted in financial market breakage which we have been observing for the last two weeks and especially this weekend as Credit Suisse, once my employer, has … [Read more...] about GITA: Gold Is The Alternative

Share to Twitter Share to Linkedin There were no new bank failures over the weekend. But the global banking system is not in the pink of health. There are two reasons for continued concern: A March 13 study by four economists reveals that 186 banks are at risk of “impairment” of $300 billion worth of insured deposits A March 19 New York Times report reveals that the Federal Reserve began warning Silicon Valley Bank (SVB) of financial risks in 2021 — over a year before it cratered — yet SVB management did nothing. What’s more Moody’s warned SVB’s management of an imminent downgrade about a month before it announced its emergency capital raise. Shares of First Republic Bank FRC are trading well below where they were after it received $30 billion in deposits from other banks on March 16. It seems only a matter of time before more rot in the banking system comes to light. (I have no financial interest in the securities mentioned in this … [Read more...] about Why 186 Other Banks Could Go The Way Of Silicon Valley Bank

Share to Twitter Share to Linkedin Founder of Apartment Loan Store a Commercial Mortgage Firm. Author of “ The Encyclopedia of Commercial Real Estate Advice ," Publisher- Wiley. What a ride! For the past five years, apartment building owners hit the jackpot with their property values going up nationally by 37%, according to Marcus and Millichap. This was fueled by record rental increases of 13.5% in 2021 and 6.2% in 2022 and mortgage rates hitting their lowest ever in January 2021 . But this trend is seemingly slowing. According to CBRE, the average multifamily cap rate went up by 38 basis points to 4.49% in the last quarter of 2022, which means prices are starting to come down. And thank goodness! As a commercial mortgage banker specializing in multifamily financing nationally, 2022 was an extremely difficult year. It was a head-on collision between property values going up and mortgage rates going up. This produced smaller loan sizes, … [Read more...] about Are Multifamily Prices Coming Down Soon?

Yosea Iskandar (The Jakarta Post) PREMIUM Jakarta   ● Tue, March 21 2023 The collapse of three United States banks, Silvergate Bank, Silicon Valley Bank and Signature Bank, sent ripples through both the banking and cryptocurrency industries this month. The three banks, which focus on technology start-ups and digital assets clients, experienced setbacks due to soaring interest rates, customer withdrawals and regulatory pressures. Silvergate Bank had close ties to FTX, a bankrupt cryptocurrency exchange accused of fraud by the US Department of Justice. It announced on March 8 its intention to wind down operations and voluntarily liquidate after suffering losses related to the dramatic collapse of crypto-exchange FTX. Silvergate reported a one-billion-dollar loss as investors raced to withdraw their deposits. Silicon Valley Bank or SVB was the 16 th -largest bank in the US, which provided banking services to nearly half of all US venture-backed technology and … [Read more...] about Lessons learned from a modern banking odyssey