PacWEst led the losses and fell as much as 28%, Metropolitan Bank fell 20% and Western Alliance fell 15%. The KRE exchange-traded fund, which represents regional banks, fell 6.27% on its worst day since March.
American regional banks plunged sharply on Wall Street this Tuesday. Dragged down by the collapse of First Republic Bankwas intervened by authorities this Monday and was partially sold to JPMorgan Chase. The American stock market closed with losses and its main indicator, Dow Jones Industrials, fell 1.08%. PacWEst asset led losses and fell as much as 28%, Metropolitan Bank fell 20% and Western Alliance fell 15%. The KRE exchange-traded fund, which represents the regional banking sector, fell 6.27% on its worst day since the March turmoil.
“As banking woes don’t look like they’re going to go away anytime soon, Wall Street is hitting the sell button and it’s ready to focus on the next weak link, a lender, potentially with high risk in commercial real estate,” the analyst said. Moya from Oanda in the statements collected by the EFE news agency. The collapse of the First Republic is the third time a US regional bank has collapsed in just two months, following Silicon Valley Bank and Signature Bank last March. The asset sank in the market and lost almost all of its value last weeka, when it announced its quarterly results and announced that its clients had withdrawn more than $100 billion in deposits during the recent banking crisis.
On the other hand, The financial sector also suffered in Tuesday’s session, holding at 2.3%. JPMorgan Chase itself fell 1.60%. Although regional banks have had the worst share, they are seen by investors as potential victims of banking sector problems.
Drops in Dow Jones and Nasdaq
At the close of trading in New York, the Dow Jones finished 33,684.53 points, the selective S&P 500 fell 1.16% to 4,119.58 points, and the Nasdaq market composite index lost 1.08% to 12,080.51 units.
The energy sector was the second hardest hit: the price of Texas medium oil (WTI) fell 4.28% after falling 5.3% to $71.66 a barrel, and has already hit a chain level. four days lost. The benchmark crude oil price in the US is being affected by bad data from the Chinese manufacturing industry, which points to dwindling demand from the largest importer of crude oil, and the expectation that the Fed will decide on another hike this Wednesday. interest rates.
These declines come amid tensions before the Federal Reserve’s monetary policy meeting concludes tomorrow, when the Federal Reserve will predictably decide to raise interest rates again by 25 basis points. Oil company suffered the biggest loss among 30 Dow Jones shares strip (-4.28%), amexpress (-3.79%) and boots (-3.21%). Only three companies were positive: MSD (1.30%), Johnson & Johnson (0.89%) and McDonald’s (0.13%).
Acquisition of First Republic Bank
JPMorgan purchased First Republic at a government auction Monday, ending weeks of failed bailouts involving some of Wall Street’s most powerful executives and US officials. According to two sources close to the situation, the negotiations have ended. Four bidders, including JPMorgan, reached the final rounds of the auction Sunday night..
JPMorgan didn’t know until late in the morning in New York that it won despite the last bids being placed a few hours ago. At one point in the evening, while Dimon and other senior executives awaited the outcome of their bids, the silence of the Federal Deposit Insurance Corporation (FDIC) made them think they had lost.
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The final deal, announced around 3:30 a.m., cements its reputation. Dimon as one of the most powerful bankers on Wall Street. But the deal also raises new questions about the dangers of owning banks that are too big to fail, the quality of regulatory oversight of the banking industry, and the Biden administration’s determination to keep companies from shrinking. very strong through agreements.
Piper Sandler analysts explained that the deal is much more important to JPMorgan than finance. consolidates the bank as “industry leader in turbulence”. “The only concern we have is currently unknown. JPM was already a very important player and has now become even more important as it remains a ‘too big to fail’ political concern,” they wrote.
Source: Informacion
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