2023-04-26 00:02:47
US stock market The market closed on Tuesday (25 Apr. 23) in negative territory, worried regarding the economic recession and crisis in the financial institution system from 2 main issues that are connected.
– First Republic Bank (FRB) US regional bank customers deposit withdrawal parade cause stocks to fall
– US consumer confidence It dropped to its lowest level in 9 months in April.
* The Dow dropped 344.57 points (1.02%) to close at 33,530.83 points.
*S&P dropped 65.41 points (1.58%) to close at 4,071.63 points.
* Nasdaq fell 238.05 points (1.98%) to close at 11,799.16 points.
– On the issue of the FRB, the BBC reported that Neil Holland, the chief financial officer of the US FRB, said that in the first three months of the year, Customers flocked to withdraw deposits of more than 100 billion US dollars (or 3,439 million baht), resulting in a 40 percent drop in deposits since late December ’22. Causing many to begin to worry that FRB is at risk of falling behind Silicon Valley Bank and Signature Bank, causing FRB to restructure the financial position or balance sheet. Cost reduction and short-term borrowing plans to reduce costs and job cuts of 20-25 percent over the next few months. Joined to raise new capital totaling US $ 30 billion to the FRB. It is expected that this measure will help people feel confident in the US banking business is still strong in terms of capital for doing business.
CNBC reported that FRB stock fell more than 49% to a record low. Investors questioned how FRB might maintain its stability. As of 9:19 PM ET, FRB shares fell 26.84% to $11.71.
Mr. Kobsak Pootrakool, Chairman of the Board of Directors of the Federation of Thai Capital Market Organizations Posting a message on Facebook, Kobsak Pootrakool follows the solution of the FRB because he thinks that $102 billion in customer deposit withdrawals during Q1 More than half of existing deposits of $176 billion at year-end, reflecting depositor concerns. Not sure if FRB will get through the crisis or not. therefore withdrawing the money first Although there is an injection of money from the big banks of the United States. Still unable to build confidence to return
Finally, the FRB had to solve the problem by borrowing $92 billion from the Fed. To return to those deposited customers and was reduced by Moody’s credit rating to B2 or in the middle of Non-investment Grade
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The Conference Board’s consumer sentiment index dropped to 101.3 in April from 104.0 in March. Causing concerns regarding an economic recession A day following FRB’s earnings report
Investors are also concerned regarding the possibility of central banks raising interest rates further to fight inflation. may cause economic growth to slow down especially in the US UK and EU Both the US Federal Reserve (Fed), the Bank of England and the European Central Bank They will raise interest rates in the upcoming meeting. The Fed is scheduled to meet on May 2-3, 2023.
# US stocks
#FRB
CR:CNBC,Kobsak Pootrakool
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