US500 is weakening amid bank turmoil. GOLD above 2000 USD level ⚡

6:18 PM 23 March 2023

Sentiment in the US stock market is deteriorating due to the still precarious situation of the banking sector. Despite reassuring comments from regulators and Jerome Powell himself, the stock market does not share the optimism contained in the statements, bank shares continue to be sold. Regional banks, with limited access to liquidity, are particularly vulnerable. The S&P500 futures are once again under supply-side pressure, and the rise in the price of gold to the US$2,000 area confirms that fears of an escalating financial crisis are still alive:

  • First Republic Bank (FRC.US) shares are down more than 7%, already trading at a nearly 90% discount to book value. Credit Suisse also had a similar, puzzlingly low P/B ratio;
  • Yesterday, credit rating agency Fitch downgraded First Republic Bank from BB to B, which illustrates a high risk of bankruptcy and little 'margin of safety'. The share price has failed to rise steadily despite a USD 30 billion liquidity injection from major US banks;
  • The notorious fall in the bank's share valuation makes investors start to see another collapse or takeover as more likely before the weekend. This would not be positive news for the banking sector as a whole and could herald further deposit outflows in an environment of drying up liquidity;
  • Wells Fargo (WFC.US) and JP Morgan (JPM.US) erased their morning gains, while Bank of America (BAC.US) and Bank of New York Mellon (BK.US) are also losing. Investors fear that central banks that have not bent and raised rates will increase the stress level for the industry as a whole. 

Start investing today or test a free demo

Open real account TRY DEMO Download mobile app Download mobile app

Credit conditions for buying large household goods in the US are tightening and have approached 2008 levels. Source: University of Michigan, Haver AnalyticsWhile GOLD is climbing above US$2,000 per ounce, S&P500 (US500) futures have retreated after dynamic gains, although we can see a bullish inverted head-and-shoulders formation on the chart. In the short term, the key level for the bulls appears to be the 4050 point level, which coincides with previous price reactions and the 38.2 Fibonacci retracement. The price is between the SMA200 and SMA100 averages, from where demand and supply will try to give the index further direction. If bank sentiment deteriorates, the inverted RGR formation is likely to be negated. Source: xStation5

Share:
Back
Xtb logo

Join over 935 000 XTB Group Clients from around the world

The financial instruments we offer, especially CFDs, can be highly risky. Fractional Shares (FS) is an acquired from XTB fiduciary right to fractional parts of stocks and ETFs. FS are not a separate financial instrument. The limited corporate rights are associated with FS.
This page was not created for investors residing in Brazil. This brokerage is not authorized by the Comissão de Valores Mobiliários (CVM) or the Brazilian Central Bank (BCB). The content of this page should not be characterized as an investment offer in Brazil or for investors residing in that country.
Losses can exceed deposits

We use cookies

By clicking “Accept All”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.

This group contains cookies that are necessary for our websites to work. They take part in functionalities like language preferences, traffic distribution or keeping user session. They cannot be disabled.

Cookie name
Description
SERVERID
userBranchSymbol cc 2 March 2024
test_cookie cc 25 January 2024
adobe_unique_id cc 1 March 2025
__hssc cc 8 September 2022
SESSID cc 2 March 2024
__cf_bm cc 8 September 2022
intercom-id-iojaybix cc 26 November 2024
intercom-session-iojaybix cc 8 March 2024

We use tools that let us analyze the usage of our page. Such data lets us improve the user experience of our web service.

Cookie name
Description
_gid cc 9 September 2022
_gat_UA-98728395-1 cc 8 September 2022
_gat_UA-121192761-1 cc 8 September 2022
_gcl_au cc 30 May 2024
_ga_CBPL72L2EC cc 1 March 2026
_ga cc 1 March 2026
__hstc cc 7 March 2023
__hssrc

This group of cookies is used to show you ads of topics that you are interested in. It also lets us monitor our marketing activities, it helps to measure the performance of our ads.

Cookie name
Description
MUID cc 26 March 2025
_omappvp cc 11 February 2035
_omappvs cc 1 March 2024
_uetsid cc 2 March 2024
_uetvid cc 26 March 2025
_fbp cc 30 May 2024
fr cc 7 December 2022
_ttp cc 26 March 2025
_tt_enable_cookie cc 26 March 2025
_ttp cc 26 March 2025
hubspotutk cc 7 March 2023

Cookies from this group store your preferences you gave while using the site, so that they will already be here when you visit the page after some time.

Cookie name
Description

This page uses cookies. Cookies are files stored in your browser and are used by most websites to help personalise your web experience. For more information see our Privacy Policy You can manage cookies by clicking "Settings". If you agree to our use of cookies, click "Accept all".

Change region and language
Country of residence
Language