- The regulator stated that Silicon Valley Bank’s risk management was “terrible” before it collapsed.
- US consumer confidence increased from 103.4 in February to 104.2 this month.
- The chief supervisor of the European Central Bank expressed concern about the recent drop in the price of shares of Deutsche Bank.
US equities finished slightly lower on Tuesday as traders considered remarks made by a top American regulator regarding failing banks. Michael Barr, head of the Federal Reserve’s banking division, stated that Silicon Valley Bank’s risk management was “terrible” before it collapsed.
One of the greatest drags on the S&P 500 was the decline in share prices of Apple, Microsoft, and other technology-related companies.
Shares of First Citizens BancShares were slightly higher the day after the stock rose by more than 50%. This followed the news that it would purchase the deposits and debts of Silicon Valley Bank.
The value of bank stocks has considerably decreased due to problems at Silicon Valley and other banks.
Early in the day, a survey revealed that although Americans are starting to feel a little uneasy about the job market, consumer confidence in the US unexpectedly rose in March.
The Conference Board’s consumer confidence indicator increased from 103.4 in February to 104.2 this month. The poll was closed on March 20, ten days after Silicon Valley Bank in California failed.
The percentage of consumers who said employment was “plentiful” decreased, while the percentage who said they were “not so plentiful” increased.
Although there hasn’t been much of a relationship between consumer confidence and spending, the poll found that consumption could expand moderately and support the overall economy.
Investors anticipate upcoming bank results as the quarter ends. These will give additional information about the sector’s health in the wake of Silicon Valley and Signature Bank’s failure.
European equities were flat on Tuesday as investors struggled to make a move due to ongoing banking. The chief supervisor of the European Central Bank expressed concern that the recent drop in the price of shares of Deutsche Bank indicated that investors were uneasy. This meant they could be alarmed by small credit default swaps market changes.
The German bank lost almost 2% on Tuesday, following a loss of almost 9% the previous week. This is due to a rise in the cost of insuring debt against default risk to a level not seen in more than four years.