Frankfurt After the leading German index Dax was able to compensate for some of the losses on Friday, prices fell again after the stock market in the USA opened. The Dax closed on Friday down 1.3 percent at 15,427 points. Above all, the poor specifications on the US stock exchanges caused selling pressure. Two bad news from the financial sector triggered a price slide on Wall Street on Thursday.
The collapse of crypto bank Silvergate Capital and the plunge in the share price of Silicon Valley Bank (SVB) made investors aware of the dangers such as loan defaults that can be associated with the recent rise in interest rates.
The Silicon Valley Bank had surprisingly announced that it had to strengthen its capital position. The financial house from Santa Clara, California had announced the sale of bonds worth 21 billion dollars. However, this resulted in a loss of 1.8 billion dollars. This gap is now to be compensated with the issue of new shares in the amount of 2.25 billion dollars.
The stock experienced its worst trading day yesterday. After the stock market closed on Thursday, the price continued to slide – within 24 hours the money house finally lost about 70 percent of its market value.
>> Read here: Silicon Valley Bank needs billions – Fear of US banking crisis scares investors worldwide
The sell-off in Frankfurt continued at SVB on Friday. The papers collapsed by 27.6 percent. Within the first hour of trading, 31 times as many SVB securities changed hands as on an average day as a whole.
Government bonds in demand – US labor market has cooled less than expected
Concerns about the banking sector encouraged investors to invest in government bonds. “It could be that many investors are now pulling the plug from the stock market and prefer the attractive interest rates on the bond market as an alternative,” said Jürgen Molnar, capital market strategist at broker RoboMarkets.
In return for rising prices, yields fell. The 10-year Bund yielded 2.548 percent from 2.641 percent on Thursday, while the yield on US bonds with the same maturity fell to 3.857 percent from 3.923 percent.
After a strong start to the year, the US labor market cooled less than expected in February. Nonfarm payrolls added 311,000 jobs in January, down from a revised 504,000 in January, the Washington government said on Friday. Economists polled by Reuters had forecast just 205,000 new jobs for February. The separately surveyed unemployment rate, on the other hand, rose from 3.4 to 3.6 percent.
The monthly jobs report is credited with having a major impact on US monetary policy because low unemployment can fuel high inflation. Robust numbers could force the Fed to raise interest rates even more, which would weigh on the US economy and oil demand.
After heading for their biggest weekly drop in more than a month ahead of the US jobs report, oil prices recovered slightly following the release. The North Sea variety Brent and the light US variety WTI each rose by around half a percent to $82 and $76.10 per barrel (159 liters).
Look at individual values
European Banks: The collapse of the Silicon Valley bank increased fears of a banking crisis among investors. As a result, the European banking index slipped by 3.9 percent. In Paris, Société Generalé fell 9.3 percent and BNP Paribas 3.1 percent. Barclays fell 3 percent in London, Santander 3 percent in Madrid. German institutes also lost significantly.
Deutsche Bank: The institute’s share is currently the biggest loser in the Dax. In the afternoon, the paper was down 6.5 percent at EUR 10.66.
Commerzbank: The shares of Commerzbank, which recently returned to the Dax, were down 2.6 percent in the afternoon at EUR 11.35.
Credit Suisse: A sell-off in the banking sector pushed Credit Suisse shares to record lows on Friday. The titles of the crisis-plagued industry number two in Switzerland fell shortly after the start of trading on Friday to CHF 2.463. After a slight recovery, Credit Suisse was still 3.1 percent down at 2.54 francs at midday.
Daimler trucks: After a significant revival last year, the commercial vehicle manufacturer Daimler Truck is preparing for continued good business. The company announced on Friday that sales should increase significantly to between 55 and 57 billion euros in 2023. An increase in operating profit is also expected. Cost reductions should play an important role in this. In 2022, the return at Daimler Truck improved by 1.6 percentage points to 7.7 percent.
The figures were nevertheless received with skepticism on the stock exchange. The papers closed 4.5 percent in the red and were among the weakest values in the leading index Dax. The Jefferies experts pointed out that the results in the fourth quarter were weaker than expected. The Mercedes-Benz brand in particular suffered from rising costs and payments to suppliers.
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