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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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US Stocks Slump as European Banking System Shakes

US stocks fell on Wednesday due to extended pressure upon Credit Suisse in the financial sector.

US30 - Daily Chart

US30 - Daily Chart

The US30 dropped by 500 points in the first two hours of trading and was testing the lows of Monday as traders fretted about the banking system. This is a crucial level for the US Dow Jones index because the next level of support comes at 29,000. Traders need to be cautious with long positions in the current environment.

Swiss lender Credit Suisse continues to be a problem for the European banking system and could force the European Central Bank to hold off on this week’s previously expected 50bps hike. The cost to insure the debt of Credit Suisse continues to soar and is now “18 times UBS, 9 times Deutsche bank,” according to Bloomberg.

US Banking Turmoil Spreads Into European Region

“If regulators do not handle the Credit Suisse situation well, this will send shockwaves through the whole sector,” said Joost Beaumont, head of bank research at ABN Amro.

“To make matters worse, both sides of the Atlantic have banking issues,” he added.

The European Central Bank will meet tomorrow for an interest rate meeting, and previous guidance had investors expecting a 50bps hike. The bank may soon take extraordinary measures if the current banking turmoil escalates.

Credit Suisse Group’s shares reached another record low as its top shareholder refused to commit to buying more of the troubled company’s stock.

“The answer is absolutely not, for many reasons outside the simplest reason, which is regulatory and statutory,” Saudi National Bank Chairman Ammar Al Khudairy told Bloomberg TV on Wednesday. Saudi National Bank is 37% owned by the kingdom’s sovereign wealth fund and is Credit Suisse’s largest shareholder, with a 9.9% stake.

Last Updated: 16/03/2023

This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


 

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