The acquisition of Credit Suisse by UBS has managed to stabilize the markets after a period marked by fears of a new financial crisis. across the atlantic, First Republic Bank shot up more than 40% after JP Morgan & Co will draw up a new plan to help the company. The Spanish stock market rebounded strongly in what was the biggest daily rise of the year. The Ibex recovers 9,000 points driven by banks and accumulates an annual return of more than 10%. Investors will once again turn their attention to inflation, rate hikes and growth prospects, although they now see a credit crunch as more likely.
At the business level, banks led the increases, Sabadell rebounded by more than 7%, while CaixaBank and Unicaja returned to trading in positive in the accumulated of the year. Investors hope that Credit Suisse’s situation will remain an isolated event and stop the contagion effect. Grifols slipped into the middle of these increases to rise more than 5% and move away from the annual lows. The Catalan pharmaceutical company continues to be badly affected by its high indebtedness in a period of rate hikes. On the negative side, Meliá Hotels finished in last position in the table due to fears that consumer confidence could be affected by the recent tensions.
Precisely the ZEW Investor Confidence Index in Germany was lower than the previous month (13 vs 17.1), although it remains above zero, indicating optimism. Existing home sales in the US snapped a 12-month streak of declines and rebounded to 4.58 million in February. The rise in interest rates continues to slow down activity in one of the most dynamic sectors. The Federal Reserve will announce the rate decision tomorrow in which it is expected with an 86% chance of a rise of 25 basis points.
Elsewhere, oil rebounded to $74 but remains at late-2021 lows. Gold pared back from yearly highs after rising nearly 10% since the SVB crash. EURUSD is trading at 1.07 awaiting the Fed’s next decision and its stance on further hikes. Bitcoin continues to soar, breaking above $28,000 for the first time since June. The yield of the bonds increased due to the recovery of the appetite for risk and the Spanish 10-year bond rose to 3.31%
Joaquin Robles, XTB analyst