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MARKET REVIEW. North American stock markets closed higher on Thursday, shifting course once more on tech stocks and signs of recovery in financials stocks, which are having a bumpy week.
The New York Stock Exchange ended sharply higher on Thursday, reassured by the intervention of a group of American banks to support the regional establishment First Republic, a new gesture likely to stabilize the financial sector, very hectic in recent days.
To (re)consult market news
Stock market indices at closing
In Toronto, the S&P/TSX rose 160.17 points (+0.83%) to 19,539.01 points.
In New York, the S&P 500 rose 68.35 points (+1.76%) to 3,960.28 points.
The Nasdaq collected 283.22 points (+2.48%) to 11,717.28 points.
The DOW rose 371.98 points (+1.17%) to 32,246.55 points.
The loon rose US$0.0024 (+0.3354%) to US$0.7291.
The oil closed up US$0.61 (+0.90%) at US68.22.
L’or retreated US$7.20 (-0.37%) to US$1,924.10.
The bitcoin rose US$645.37 (+2.65%) to US$24,970.37.
The context
The session had started in the red, in a still feverish atmosphere, marked by a rise in volatility.
But the indices turned with the publication of information relating to an intervention of a group of banks to support their small regional competitor, First Republic, weakened.
The momentum was confirmed by the official announcement, before closing: eleven of the biggest names in the banking sector will place 30 billion US dollars in deposits in the accounts of the Californian institution.
The communication followed the message of confidence sent Thursday by the European Central Bank (ECB), which said it was ready to intervene at any time in the event of further deterioration.
Another hearth was brought under control on Wednesday with the commitment of the Swiss central bank to lend up to 50 billion Swiss francs in cash to Credit Suisse, also in difficulty by a phenomenon of contagion, following the failure of three American banks last week.
“The market concluded that we may not be completely out of the woods, but things are looking up,” commented Patrick O’Hare of Briefing.com, for which investors “appreciated” that the boost to First Republic is a private initiative.
Wall Street now has “hope that the worst is behind us,” said Maris Ogg of Tower Bridge Advisors. “If you take the First Republic and Credit Suisse bankruptcies out of the box, it calms people down.”
“I don’t think we’re going to do 2008 once more,” predicts the manager, “because the problem does not come from the credit portfolios, but from the fact that (the American central bank) raised its rates from 0 to 4, 50% in nine months.”
The massive injection of deposits within First Republic catapulted the action of the bank (+9.98%), which had lost up to 36% at the start of the session.
Other regional brands mistreated on the stock market since Friday have resumed colors, in particular Western Alliance (WAL) (+14,10%), Bank of Hawaii (BOH) (+10.67%) or Valley National (VLY) (+8,30%).
The big banks have surfed the wave, like Bank of America (BAC) (+3.46%) and Wells Fargo (WFC) (+ 3.84%), both of which are part of the group that came to the aid of First Republic.
The appeasement was also manifested by the sharp drop in the VIX index (-12%), which measures market volatility, as well as by the rebound in bond rates.
The yield on 10-year US government bonds stood at 3.57%, once morest 3.45% the day before.
In general, risk appetite was back and particularly benefiting the technology sector.
Giant caps Microsoft (MSFT) (+4,05%), Alphabet (GOOGL) (+4,68%) et Amazon (AMZN) (+3.99%) thus pulled the Nasdaq, which has just achieved the feat of stringing together four consecutive sessions in the green despite the current earthquake in the banking sector.
Elsewhere on the coast, Snap (SNAP) (+7.25%), parent company of the social network Snapchat, had the wind in its back when the American government officially recommended the sale of TikTok by its Chinese shareholder ByteDance, failing which the video platform is exposed to an outright ban in the United States. The news also benefited Meta (+3.63%), and the creative platform and social network Pinterest (+5.99%).
The specialist in document creation and management software Adobe (ADBE) was also sought following (+5.90%), following the publication of quarterly results that exceeded expectations. The group also raised its forecast for the whole of the 2023 financial year (closed in early December).
