market news summary
European stocks rose at the end of the trading session on Tuesday, March 14th, after falling on Monday due to the crisis of the collapse of Silicon Valley Bank.
At the end of the session, the STOXX600 index rose by 1.53% to 449 points, while the German DAX rose by 1.83% to 15232 points, and the French CAC closed up by 1.86% to record 7141 points. The British FTSE rose by 1.17% to 7637 points. Meanwhile, the banking sector rose by 2.4% after suffering its worst daily performance in more than a year.
Economist and academic Jeremy Siegel have stated that the Fed is the reason for the collapse of the Silicon Valley Bank, and in an opinion piece shared with two Yale professors published by Fortune, Siegel said that the Fed “killed” the bank and may cause a recession in the economy.
The professor at Wharton University added: This crisis is evidence that the Fed has gone too far in its policy, and he also warned that if the Fed raises interest by 50 basis points at this month’s meeting, it will increase the risks of similar to the collapse of the SVB.
Dollar index (USDX)
The dollar found support in Asian markets on Wednesday, March 15th, as investors cut their expectations about cutting interest rates in the United States after easing fears of a banking crisis and the release of data showing that inflation remains high.
In early trading, the wave of selling the dollar, which lasted for two sessions, subsided, and the US currency rose about 0.2% against both the euro and the yen, recording 132.52 yen and 1.0729 dollars against the euro.
Pivot Point: 103.30
Spot Gold (XAUUSD)
Gold prices fell on Wednesday, March 15th, as a result of the rise in the dollar and US bond yields, while investors evaluated the path of US interest rates after the consumer price report showed that inflation remains high.
Spot gold fell 0.1% to $1901.24 an ounce after falling briefly below the important $1900 level earlier in the session. US gold futures lost 0.3%, recording $1,905.30.
Pivot Point: 1,904
Dow Jones Index (DJ30ft – US30)
US indices rebounded in Tuesday’s session, supported by inflation data, which led to lower expectations about the size of the rate hike at the next Federal Reserve meeting, in addition to a decrease in fears about more collapses in the banking sector.
The Consumer Price Index report showed that the inflation rate slowed to 6% in February for the eighth consecutive month to its lowest level since September 2021. Moreover, signs of the economy getting weak, along with a regional banking panic, raised the odds that the Fed would implement a modest 25-point increase in the interest rate on March 22nd.
The Dow Jones index rose by 1%, or the equivalent of 336 points, to rebound from its lowest closing in more than 4 months and after 5 consecutive sessions of decline. Most of the main sectors in the Dow Jones rose, led by the financial sector, which jumped by 2.6%, in an indication of investor sentiment regarding containing the American crisis in the bank sector.
Pivot Point: 32315
US Crude Oil (USOUSD)
Saudi Energy Minister Abdulaziz bin Salman stated that if a price cap is imposed on Saudi oil exports, the Kingdom will not sell oil to any country that imposes a price cap on its supplies.
He added: We will reduce oil production, and I would not be surprised if other countries take the same measure. There is a big difference between the NOPEC draft law and the expansion of imposing a price ceiling, but their potential impact on the oil market is similar, as such policies add new risks and greater ambiguity at a time when for clarity and stability are intensifying.
Bin Salman believes that these policies will exacerbate market instability and fluctuations, which will negatively affect the oil industry.
Regarding the OPEC + decision on production levels, the Saudi Energy Minister stressed that the only reasonable measure under the current circumstances is to maintain the agreement that the group concluded last October and said, “There are those who continue to believe that we will amend the agreement… I say they need to wait until Friday, December 29, 2023, to prove to them our commitment to the current agreement.”
Pivot Point: 72.35