Credit Suisse faces market chaos and investor uncertainty
Credit Suisse bank’s stock witnessed a decline of more than half of its value during this year only,
which came before the massive selling operations that the stock witnessed at the beginning of last Monday’s trading,
which amounted to 12%. dollars and it did not end there,
but also because of the significant increase in the bank’s debt insurance against any defaults,
which recorded its highest level
topics
Credit Suisse stocks
The Federation completes the march when the federal goals are achieved
Cryptocurrencies record gains
Credit Suisse stocks
The CEO of the bank had sought to try to reassure the employees and investors,
and this is the second time for him, and he was based in the letter of calm on the bank’s strength in terms of liquidity,
but this was counterproductive and many investors withdrew from dealings on the bank’s shares.
critical moment
Before the bank announced its plan, which is a strategy that will be presented on October 27,
the bank decided before that to send new updates regularly to employees,
and the issue of credit default was discussed, and although this matter is still far from stumbling,
that This is an indication of the bank’s future conceptual situation and its creditworthiness,
especially after scandalous consequences in light of the current situation,
and indicates a 23% probability of default against its bonds within 5 years.
Correction of the trajectory in light of the succession of strikes
The CEO of the Bank “Korner” is still facing the issue of dealing with the critical market situation
and also the exit of the bankers and the doubt related to the capital.
It includes island and global changes, including reducing the number of employees over the next few years
The market value of the bank declined to 9.5 billion Swiss francs,
and any potential sales may lead to a decline in the value of the share to its old holders,
while the market value in March of 2021 reached 30 billion francs.
The Federation completes the march when the federal goals are achieved
If we want to talk about the Fed’s goals at the moment,
we have to address them from two sides.
The first aspect at the general level is the extent to which the strength of the dollar after raising
interest rates affect the global market.
The second aspect is how it affects the internal market of stocks,
bonds, and Wall Street more precisely.
Morgan Stanley said the Fed’s approach to resolving the crisis would not yet end earnings problems.
Despite the strength of the dollar after successive Fed decisions to raise interest rates,
it was a source of inconvenience to the US stock market,
as stocks and bonds fell violently amid the camping of investors’ fears of recession
and despite the gains made by the dollar against the rest of the currencies,
which made financial markets witness violent fluctuations thanks to those decisions.
Curiously, the Fed did not pay attention to these things in seeing officials remain the same
and the Fed chairman avoided mentioning these developments in his speech despite acknowledging
their impact on domestic consumption.
John Williams remarks
Federal Reserve Chairman John Williams said that things will not be resolved overnight in controlling inflation
will require a lot of work and must take its time, warning against rushing towards this.
He also stated in his speech to Vinsky on Monday that tighter monetary policy began
to bear fruit as it reduced inflationary pressures and significantly calmed demand,
noting that the task is not over yet, we still
To reduce inflation to 2%, Al Wasl was tasked with accelerating the pace of tightening
that the United States has not seen since the 1980s.
The Central Bank raised interest rates by three-quarters of Moi points for the third time on September 21.
Coinciding with events and expectations from Bloomberg poll participants,
the unemployment rate will remain steady at 3.7% for September despite the rapid tightening of monetary policy.
Those predictions remain valid until the Labor Department publishes the monthly report next Friday.
John Williams pointed out that the unemployment rate is expected to rise from the current
level of 3.7% to nearly 4.5 percent until the end of 2023, affected by weak growth.
Quarterly forecasts published along with the decision came
that monetary policymakers are likely to raise the benchmark by another
1.25 percentage points during this year’s last two policy meetings,
meaning a fourth consecutive rate hike by 75 basis points at the Nov. 1-2 meeting.
And about the decline in the housing market, Williams said.
The main reasons for the significant decline in the housing market relate
to the broad measures of financial conditions,
including borrowing rates, mortgages, and stock prices,
which have also led to weak investment and commercial consumption spending.
With this pace, I expect GDP to be close to stability this year and growth may increase modestly next year.
Cryptocurrencies record gains
“Bitcoin” rises 4% and “Dogecoin” reaches 10%, due to the impact of the stock market recovery.
In light of the recovery of the US stock markets, cryptocurrencies recorded a rise for the second day in a row,
the first time that occurred in two months after prices stabilized at their lowest levels. Face the accelerating inflation too
Bitcoin heights
At the beginning of trading on Tuesday, the “Bitcoin” currency,
which represents the largest market value among the rest of the digital currencies,
rose by 4%, to reach $ 20,372, which is the highest level for the cryptocurrency since last September 15,
and this came with the gains made by the US stock market,
where The Standard & Poor’s 500 Index recorded its highest rise over two days,
which is also the first time since the year before 2022 in April.
But despite this rise and the preservation of the cryptocurrency at levels of 19 thousand dollars,
it is still recording weekly losses of about 1.3%, and over this year, losses have reached 58% so far.
Fear reigns supreme
The rise of digital currencies does not erase the impact of the severe fears
that control investors in the crypto market,
at a time when the Fed is seeking more tightening policies related to interest rates,
and the strong rise of the US dollar to record its highest level in 20 years,
always with the rise of the dollar, investors avoid entering In risky assets
and trying to acquire the dollar as safety and better hedge for them,
the demand for gold also decreased due to the rise in the cost of owning the bullion in dollars,
and we are still at 24 points for the fear and greed index due to the fear of any sudden reversals
that may occur in the markets.
Correlation of Bitcoin’s performance to stocks
During the current year, we noticed the strength of the correlation between the “Standard & Poor’s” index
and “Bitcoin” as the founder of “Tollbakken Capital” also stated that “we cannot see days
when the markets record a rise without Bitcoin and vice versa also, with any declines in prices.
” Bitcoin “and the decline of cryptocurrencies, we see the decline in the stock market,
and he also indicated that the markets are currently interconnected as follows,
while we see the Nasdaq index rise, we see the stocks follow it to the top,
and the dollar then weakens, and in the end, we find a stronger Bitcoin”.
article name Credit Suisse faces market chaos and investor uncertainty