The second and third biggest bank failures in US history shook investor confidence in bank stocks worth tens of billions of dollars on Monday, as fears of contagion spread across the industry from the weekend collapses of Silicon Valley Bank and Signature Bank – regional banks Hitting was particularly hard.
America’s 10 biggest bank stocks lost $76 billion in market capitalization on Monday as Charles Schwab and Truist Financial plunged 12% and 17%, respectively.
The conglomerate has lost $187 billion in market value since Wednesday in the previous trading session before the Silicon Valley bank disclosure dragged down the broader market.
Although each of those stocks slumped Monday, the impact was far greater among smaller bank stocks, as shares of regional banks First Republic and Western Alliance plunged 50% or more on Monday amid several halts on trading due to volatility.
In a Monday note to clients evaluating the market downside of the current crisis, Bank of America analyst Ibrahim Poonawalla raised his outlook for 24 regional banks, citing potentially higher compliance costs for companies amid more intense regulatory scrutiny. Price targets were reduced by an average of 24%.
24. How many financial stocks were among the S&P’s 25 worst performers on Monday, according to FactSet data?
Bank losses briefly turned the S&P 500 year-to-date negative, erasing what was once a nearly 10% rally. The index recovered on Monday with a gain of 0.2% despite the banking rout, while the Dow Jones Industrial Average and the tech-heavy Nasdaq jumped 0.1% and 0.8%.
“We believe some of the recent sell-off in banks has played out – particularly in select universal banks that are well positioned to continue serving customers,” wrote Solita Marcelli, chief US investment officer at UBS Global Wealth Management. capitalized and are adequately liquid. A Monday Note.
The California Department of Financial Protection and Innovation shut down Silicon Valley Bank on Friday after it was unable to fulfill withdrawal requests. The federal government swooped in Sunday to guarantee all individual and corporate depositors in California banks will get their money back, a step seems necessary to prevent a widespread collapse in the banking industry by some and Restricted by others as yet another government parachute for a failed corporation. President Joe Biden said Monday he would ask lawmakers to step up federal banking regulations in the wake of two high-profile failures.
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Credit: www.forbes.com /