Goldman Sachs calling a pause in the Fed’s hiking cycle, 2Y yields have plummeted a staggering 50bps, suffering the biggest 2-day drop since Black Monday in October 1987.
Most US banking stocks cede early gains to trade around flat or in the red, as initial optimism fueled by US authorities’ decisive action on SVB fades and fears mount for the health of the broader financial system. JPMorgan (JPM US) -2%; Bank of America (BAC US) -6.3%, Wells Fargo (WFC US) -3.5%, Citigroup (C US) -2.7%, Charles Schwab (SCHW US) -18%, Western Alliance Bancorp (WAL US) -25%, PacWest Bancorp (PACW US) -36%. And the First Republic trembles in fear.
What did the previous FED stress test say? All banks will overcome even a severe crisis. So we’ll see.