The easing of fears about the banking sector was short-lived, as financial markets fell sharply on Friday. The banking stocks are still the strongest sectoral decliners, but other sectors are also losing ground in a context of renewed risk aversion. Despite hopes that the rate hike cycle will soon come to an end, volatility is likely to remain high in the coming sessions, especially with fears of wider contagion and the resurgence of recession fears.
Weekly variations*
DOW JONES INDUST...
32237.53  +1.18%
Chart DOW JONES INDUST...
NASDAQ 100
12767.05  +1.97%
Chart NASDAQ 100
FTSE 100
7405.45  +0.95%
Chart FTSE 100
GOLD
1976.90$  +0.02%
Chart GOLD
WTI
69.21$  +2.91%
Chart WTI
EURO / US DOLLAR
1.08$  +0.75%
Chart EURO / US DOLLAR
This week's gainers and losers
Gainers:

On Holding (+42%): The Swiss-based, US-listed company, which sells sports accessories - notably the On Running brand - reported very strong results and exceeded one billion Swiss francs in turnover. Sales were boosted by Asia-Pacific and profits came to CHF 57.7 million, compared with a loss of CHF 170.2 million in 2021. 
 
GameStop (+36%): The company, well known for being a "meme stock", reported a surprise profit in the fourth quarter. Management's cost-cutting measures seem to have paid off. The stock rose 35.2% on Wednesday. 
 
New York Community Bancorp (+32%): The holding company of Flagstar bank has recovered almost all of its stock market losses accumulated over the last two weeks in the wake of the banking sector's decline. On Monday, an agreement was reached with US regulators for the entity to buy $38bn in assets and $36bn in liabilities from Signature Bank, one of the three failed US banks. 
 


Losers:

Block (-17%): The company's shares fell on the stock market, following a report by Hindenburg Research, which found that the company has overstated the number of users of its Cash App and understates the cost of acquiring customers. The research firm, a short seller on the case, adds that the company's compliance approach is likely to encourage fraud.

Pinduoduo (-16%): PDD Holdings failed to report results that met analysts' estimates. The Chinese company's merchandise sales surged and its costs rose in Q4 2022. The momentum was driven by the end of China's zero covid policy at the end of the year. However, the market was expecting even higher figures for the US-listed company.

Coinbase (-10%): Its shares fell nearly 12% in extended trading on Wednesday after the Securities and Exchange Commission issued the crypto exchange a Wells notice, warning the company about potential violations of U.S. securities law.


Chart Commodities
Commodities
Energy: Oil prices have risen this week, a rebound that looks like a comeback from the previous week's dizzying drop in Brent crude oil prices of nearly 12%. Traders are still feeling the pinch as banks on both sides of the Atlantic continue to struggle. In other words, risky assets are still experiencing turbulence, which explains the return of selling flows in oil at the end of the week. On the supply side, Russia is expected to continue cutting production by around 500,000 barrels per day until the end of June. In the United States, weekly oil inventories rose by a further 1.1 million barrels, whereas the consensus was for a contraction of 1.7 million barrels. In terms of prices, Northern European Brent and US WTI prices recovered a little at USD 73 and USD 68 per barrel respectively. For natural gas in Europe, the Rotterdam TTF is treading water at around EUR 42/MWh.

Metals: Gold rose to the USD 2,000 mark. The return of risk aversion and falling bond yields are helping to rekindle investors' appetite for the barbarian relic. As for base metals, despite the general mood of the markets, which remains heavy, industrial metal prices gained ground this week, with the exception of nickel, which sank to USD 2,850. On the contrary, copper is again approaching the USD 9000 line on the London Metal Exchange.

Agricultural products: Against the trend of energy and metal prices, wheat prices have fallen this week. In Chicago, a bushel of wheat is trading around 670 while corn is treading water around 630 cents.
Chart Commodities
Macroeconomics
Atmosphere. A lot has happened in a week on stock markets. On Sunday, the major central banks announced coordinated action to provide easy access to dollar liquidity, in the wake of the collapse of Credit Suisse, which was absorbed by UBS. Then the Fed raised rates by a quarter point, as expected, with a message that we would describe as "firm but full of good feelings". In other words, the fight against inflation has not been forgotten, but monetary policy will adapt to the context should it deteriorate. This was translated by the markets into "austere monetary policy will disappear at the slightest economic or financial deterioration", or something like that. The other central banks that had planned to communicate this week did what was expected of them: the Swiss National Bank, a little late, put in a 50 basis point hike, while the Bank of England, still faced with worrying inflation, opted for a 25 basis point increase. The other statistics took a back seat until Friday, when the March PMI activity indicators showed that services are still dynamic in the major economies, while industry is suffering. Also of note, US durable goods orders for February were poor.
 
Currencies. The dollar had a brief return above 1.09 against the euro in the wake of the Fed's policy decision to raise rates by a quarter point, as expected. But the strengthening of risk aversion, materialized by the fall of European banks at the end of the week, gave the greenback a boost, returning to USD 1.072 for EUR 1 on Friday. The same goes for the pound sterling, at USD 1.2196 per GBP. The yen, on the other hand, has been a safe haven with three consecutive sessions of strengthening, returning to the 130 JPY/USD mark. As for the EUR/CHF, it lost its gains from the beginning of the week to return to 0.9871, after the rescue of Credit Suisse and the SNB's half-point rate hike.

Rates. As expected, the central banks continued their fight against inflation despite the pressure on the banking sector. The US central bank and the Bank of England raised their key rates by 25 basis points to 5% and 4.25% respectively. The US side remained firm on the future path of interest rates. Despite this, investors remain convinced that the Fed will have to quickly change its stance since the consensus is still for a rate cut this summer. Historically, every episode of monetary tightening has ended in a crisis: the Latin American debt explosion in 1982, the 1987 crash, the LTCM bankruptcy in 1998, the bursting of the internet bubble in 2000, the subprime crisis in 2007 and BKLN in 2018. It is only a (small) step to say that the SIVB bankruptcy marks the beginning of a systemic crisis. In the meantime, the yield on US 10-year debt is furiously testing its support at 3.35% with 2.73% in its sights while on the German side we will be watching the 2% threshold in parallel to confirm the drop to 1.50%.

Cryptocurrencies. After an explosive rise of more than 25% last week, bitcoin has been holding steady around $28,000 since Monday. The digital currency has benefited from a return of risk appetite on hopes of a slowdown in Fed rate hikes. Still being very sensitive to the macroeconomic environment, the asset's advance appears to be dependent for the time being on an easing of monetary policy across the Atlantic, which will come to fruition as economic conditions improve. Although it has risen strongly amidst banking tensions, it is far too early to say that bitcoin is taking its place as a "safe haven" as some aficionados claim. 

Agenda. Europe switches to daylight saving time this weekend, which will reset the traditional time difference with the US. The week's major events are the Conference Board's US Consumer Confidence Index (Tuesday), Germany's preliminary March inflation figures and the latest estimate of Q4 GDP in the US (Thursday), followed on Friday by Eurozone inflation in March and so-called PCE inflation in the US. In addition, there are two speeches that could have an impact. US Treasury boss Janet Yellen's speech on Thursday evening and ECB President Christine Lagarde's speech on Friday.
Historical Chart
Banks are seeing red
A bank failure, a speech by Jerome Powell and a rate hike... This was another turbulent week on stock markets! After the collapse of Credit Suisse and its rescue by UBS and the Swiss central bank, it's Deutsche Bank's turn to worry investors. Germany's largest bank fell at the end of the week as a sharp increase in the cost of insuring against the risk of default fueled concerns about the stability of the entire European banking ecosystem. Fears of a domino effect are growing. Even if investors seem rather confident, as shown by the good performance of the markets this week, the banking situation does not look very stable. Only time will tell whether these shocks are temporary or a precursor to a larger crisis.
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*The weekly movements of indexes and stocks displayed on the dashboard are related to the period ranging from the open on Monday to the sending time of this newsletter on Friday.
The weekly movements of commodities, precious metals and currencies displayed on the dashboard are related to a 7-day rolling period from Friday to Friday, until the sending time of this newsletter. These assets continue to quote on weekends.