In the early morning of the 16th Beijing time, the US stock market closed up and down at different levels on Wednesday. Credit Suisse The self disclosure of "major defects" in internal control and the refusal of its major shareholders to further inject capital have intensified the pressure faced by the financial industry recently. The PPI and retail sales data of the United States in February showed that the inflation pressure eased, strengthening the expectation that the Federal Reserve would no longer raise interest rates aggressively.
The Dow fell 280.83 points, or 0.87%, to 31874.57; The Nasdaq Composite Index rose 5.90 points, or 0.05%, to 11434.05; The S&P 500 index fell 27.36 points, or 0.70%, to 3891.93.
On Wednesday morning, regional banks in the US stock market generally fell. After Swiss regulators announced that the central bank would provide liquidity support to Credit Suisse when necessary, the sector regained its footing in afternoon trading.
In recent days, with the collapse of Silicon Valley banks and signature banks, the crisis of the financial industry concentrated on regional banks. In the face of the Federal Reserve's eight interest rate hikes in the past 12 months, both Silicon Valley banks and signature banks have become victims of poor management.
With the deepening crisis of Credit Suisse, the pressure on the financial industry that has suddenly increased in recent days has been further amplified. On Wednesday, the attention of US equity investors turned to large banks.
Credit Suisse disclosed in its latest financial report that its internal control had found "major defects", while the bank's largest shareholder, Saudi National Bank, ruled out the possibility of continuing to invest in Credit Suisse on Wednesday.
It is reported that when asked whether he is willing to further invest in Credit Suisse, Ammar Al Khudairy, Chairman of the Saudi National Bank, said: "The answer is absolutely not, there are many reasons besides the simplest reason of regulation and regulation." Al Khudairy said that more than 10% of shares will bring additional regulatory barriers.
Saudi National Bank bought 9.9% of Credit Suisse at the end of last year, becoming the largest shareholder of Credit Suisse.
According to media reports, Credit Suisse on Wednesday called on the Swiss Central Bank to publicly support it, and the Swiss regulator promised that the central bank would provide liquidity support to Credit Suisse when necessary.
Credit Suisse released its 2022 annual report after the US stock market closed on Tuesday. The annual report shows that the company lost 3258 million Swiss francs before tax, and the net loss attributable to shareholders was 7293 million Swiss francs.
What worries investors most is that Credit Suisse claims to have found "major defects" in its reporting procedures for fiscal years 2022 and 2021 and is taking remedial measures.
The Group said that "PwC has expressed a negative opinion on the effectiveness of the Group's internal control over the financial reporting process as of December 31, 2022". These problems are related to the Group's failure to design and maintain effective risk assessment in the financial statements and various defects in internal control and communication.
It is reported that Credit Suisse did not specify whether the above problems have been solved, but said that the discussion with the Securities Regulatory Commission (SEC) has been completed.
Before this exposure of "major defects", Credit Suisse had already faced liquidity risk, which may be the most concerned by the outside world.
As early as the end of 2022, the company reported that "cash deposit withdrawals, maturity time deposits no longer renewed and net asset outflow levels were significantly higher than the level in the third quarter of the same year." In addition, in the fourth quarter, Credit Suisse customers withdrew more than 110 billion Swiss francs (about 830.3 billion yuan).
The Federal Reserve will hold an interest rate meeting next week. Several banks, including Credit Suisse, have thundered one after another, making the expectation of the Federal Reserve's interest rate increase uncertain. At present, the "Federal Reserve Observation" tool of Zhishang Stock Exchange shows that the Federal Reserve is most likely to set the terminal interest rate at 5% (currently 4.50% - 4.75%), and the policy interest rate in December this year is most likely to fall to 3.75% - 4%.
Credit Suisse has dragged down the European banking sector and led Citigroup Wells Fargo Bank 、 Goldman Sachs and Bank of America The shares of large banks in the US fell.
Moody's downgraded the outlook rating of the U.S. banking system from stable to negative, because the collapse of Silicon Valley Bank, Silvergate and Signature Bank reflected the "rapid deterioration" of the operating environment of the U.S. banking system.
Peter Bookvar, an analyst at Bleakley Financial Group, said that the pressure faced by the financial sector has generally increased due to the collapse of several banks that have changed the industry mentality.
Boockvar said: "What this tells us is that banks will embark on a large-scale credit extension and contraction, and they will focus more on consolidating their balance sheets than on lending."
He added that this was a reflection on the market balance sheet. He also pointed out that many banks may have purchased some long-term bonds, and since the Federal Reserve began to raise interest rates, the value of these long-term bonds has continued to decline.
Boockvar said, "Similarly, you have to wonder whether many of these banks will be forced to start financing by issuing shares."
On the economic data side on Wednesday, the US Labor Department reported that the US producer price index (PPI) fell 0.1% in February. The market expects the index to grow by 0.3%.
Another data shows that retail sales in the United States fell 0.4% month on month in February, which is expected to decline by 0.4%, compared with the previous growth of 3.0%.
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Credit Suisse shares tumbled. The one-year credit default swap of Credit Suisse was close to 1000 basis points, and the chairman of Saudi National Bank, the largest shareholder, said that he would never provide more assistance to it.
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In other markets, the US WTI crude oil futures closed down 5.2% on Wednesday, closing at US $67.61 per barrel, the lowest closing price since December 3, 2021. WTI futures closed 5.2% lower on Wednesday, creating the largest one-day percentage decline in more than two months. Brent crude oil, the benchmark of global crude oil prices, also closed at about US $74 per barrel, the lowest closing price in 15 months.
The gold futures price of April, the most actively traded month in the gold futures market of the New York Mercantile Exchange, rose by 20.4 dollars on the 15th compared with the previous trading day, closing at 1931.3 dollars per ounce, or 1.07%.
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