Retail banking once again becomes Wall Street’s weak flank. On the day of the Federal Reserve, which has raised rates by 25 basis points, small US entities again show cuts after the truce on Tuesday. First Republic fell more than 4%, a setback that, although moderate compared to the falls experienced in recent days, shows that confidence has not been fully restored.
In this sense, Pacwest is ahead of it, which collapses almost 10% after learning that it is reversing its plans to increase capital and instead will receive a liquidity injection of 1,400 million dollars from Altas after suffering a leak 20% of your deposits. KeyCorp and Zions Bancorp, for their part, registered somewhat more modest falls, around 2%. The wounds of the stock market ‘crash’ have not healed yet, so an unexpected event can fill Wall Street with dark clouds. Shares of big banks are also in doubt with Wells Fargo down 0.87%, JP Morgan 1%, Bank of America 1.7% and Citigroup 1.3%.
First Republic Bank Stock
In any case, everything arose from what the Federal Reserve, headed by Jerome Powell, decided on the pace of rate hikes. The rates are in a range between 4.5% and 4.75%, which would end up weighing on the demand for crude oil. For her part, the president of the ECB Christine Lagarde, has not wanted to commit a priori to any specific roadmap around interest rates and assured that all her decisions will be based on data.
The main indices are trading mixed. The Dow Jones and the Nasdaq rose slightly by 0.33% and 0.14%, respectively, while the S&P500 fell by 0.05%. The financial sector rallied yesterday after Treasury Secretary Janet Yellen said authorities were willing to guarantee deposits at other troubled banks, credited with sending First Republic shares soaring. By sector, only three woke up with a profit, led by technology (0.2%), while the rest moved into negative territory, with the real estate sector (-1.5%) as the most affected, along with energy ( – 0.37%).