It will take more than the Federal Reserve raising interest rates in the midst of the worst banking mess since the 2008 financial crisis for stock-market investors to lose their cool.
“Investors are broadly assuming that regulators are going to step in and ringfence the sector if need be, and that’s what keeps it from spilling over to the broader market,” said Anastasia Amoroso, chief investment strategist at iCapital, in a phone interview. Deposits are “the epicenter of the crisis of confidence” in U.S. banks, said Kristina Hooper, chief global market strategist at Invesco, in a phone interview. Anything that suggests there won’t be full protection for deposits is bound to worry investors in a charged environment.
Deposits across banks have been under pressure after the Federal Reserve began aggressively raising interest rates roughly a year ago. Since then, deposits at all domestic banks have fallen by $663 billion, or 3.9%, as money flowed into money-market funds and bonds, noted Paul Ashworth, chief North American economist at Capital Economics, in a Friday note.
It appears that despite the severity of the situation, investors remain confident in their decisions. It's an interesting situation to observe.
It's an interesting insight - it will be interesting to see how investors react if the situation worsens.
It's a fascinating look at how investors are responding to the current banking mess. Have you seen any other insights on the topic?
Interesting insight into why investors remain relatively calm despite the current banking crisis.
YET.
So they (elected officials) learned nothing from 2008? Or, did they take Yellen at her word stating “we will never face another crisis like that in our lifetime”? I’m beginning to think there are a lot of govt decision makers who’ve become way too comfortable with printing money…
Raising rates will do 0 to bring down inflation 💩
AMCbiggums
Too bad the depositors got 'not bailed out'. At least everyone got a snapshot
It's interesting to see how the stock market is responding to the current banking mess. It will be interesting to see how things unfold in the coming weeks.
It's a reminder of how far we have come in the last decade and a testament to the resilience of the stock market. StockMarket Banking
It's a sign of investor confidence that the worst banking mess since 2008 hasn't had a major impact on the stock market - yet. Investment Banking
It's an interesting paradox that investors aren't more concerned about the current banking mess. What do you think is the reason behind it? BankingMess StockMarket
It's clear that investors are taking a more measured approach to the current banking crisis than in 2008.
It's an interesting question - let's take a closer look at why the stock market isn't reacting to the banking mess. Investing
Please. People see a return to monetizing and qe and don’t want to look stupid this time by missing out on the fun.
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An end to Fed rate hikes is one reason why tech stocks are resilientAn end to Fed rate hikes is just one reason why technology stocks are holding up amid the broader market chaos The Fed is slowing down hikes because it’s afraid of the bank failing not because we’ve defeated inflation. The consensus is to raise rates and fight inflation. False hope.
Source: BusinessInsider - 🏆 729. / 51 Read more »