In another tough session for world markets, the Merval traded with a 4.7% drop and it was located at 225,227.52 points, as a result of the risk aversion unleashed by the events with Silicon Valley Bank (SVB), one of the 20 most important banks in the United States.
Yesterday the Federal Reserve, the Treasury Department and the FDIC (Federal Deposit Insurance Corporation) released a statement indicating that SVB depositors would have full access to their funds, seeking to eliminate any concern regarding the functioning of the banking system.
However, the contagion effect due to the fear that the US financial system would collapse, unleashed a wave of massive sales in all markets of the world. which hits emerging markets particularly hard, as they are more exposed to external shocks.
“Although the first measures point to a rescue of the entity and to encapsulate the crisis, this bankruptcy adds another seasoning to a market that has been hit by the resistance of inflation. It will be one more test for the Fed that now it will not only have the challenge of lowering inflation, but must also take care of the health of the financial system,” said Cohen.
In the external plaza, the ADRs of Argentine companies operating abroad they were negotiated in negative territory of up to 6.9%, where the poor performance of YPF stood out. In the fixed income segment, sovereign bonds in dollars under foreign legislation recorded falls along the entire curve of up to 7%, led by the Global 38, while bonds in pesos with CER adjustment marked ups and downs. In this way, the risk advances strongly by more than 5% to settle at 2,323 basis points.
What happens in the markets of the world
Wall Street closed with mixed results, with a market that continues to weigh the impact that the closure of SVB had for the entire market and that evaluates the possibility of the Fed “softening” the rate hike at its meeting on March 22. US President Joe Biden spoke today regarding the collapse of the bank, saying that “taxpayers will not take losses” and assured clients that they would be protected.
The fall of Silicon Valley Bank hits world markets and shakes all Argentine assets
Yesterday, Treasury Secretary Janet Yellen together with Fed Chairman Jerome Powell and FDIC Chairman Martin Gruenberg announced that depositors of the failed Silicon Valley Bank would be able to access all their money starting today.
The Silicon Valley Bank saga had an immediate contagion effect as Signature Bank (SBNY) was shuttered on Sunday, making it the second bank failure in three days.. Among the measures, the Fed said that depositors would take everything. Created a new “Bank Term Funding Program” (BTFP) facility that allows other banks to get quick cash in exchange for collateral.
In the United Kingdom, the British multinational financial services company HSBC bought the British subsidiary of the United States’ Silicon Valley Bank (SVB) after the bankruptcy, as part of a deal with the Bank of England (BoE), easing the UK tech companies that have warned they could fail without help, the UK Treasury announced.
The emergency solution to SVB’s bankruptcy in the UK brought relief to the technology sector, after fears that key companies would not be able to access their funds.
Wall Street
Wall Street’s main indices trade with mixed results. Thus, the S&P 500 fell 0.15%; the industrialist Dow Jones lost 0.28%; and the technological Nasdaq advanced 0.45%.
Merval
The Merval registered a decrease of 4.7%. Thus, the falls of the leading shares were registered by Transener (-7.78%); Central Port (-6.8%); and Aluar (-6.64%).
Infected by world events, the Merval suffered a hard fall.
ADRs
The papers of Argentine firms on the NYSE were traded with the majority of results in the red. Thus, the losses were marked by YPF (-6.9%); Take off (-5.4%); and BBVA Argentina (-5%).
bonds
Sovereign bonds in dollars under foreign legislation recorded falls along the entire curve of up to 7%, led by the Global 38, while bonds in pesos with CER adjustment marked ups and downs.
Risk country
The country risk is located around 2,323 basis points.
