European stocks were higher when trading opened on Monday. Traders balanced concerns about a potential recession and its impact on interest rates with better-than-expected results from some of the largest US banks.
The European regional Stoxx 600 was up 0.4%, Germany’s Dax was also up 0.4% and London’s FTSE 100 was up 0.5% in early trading.
Across the Atlantic, deals tracking the Wall Street benchmark S&P 500 and tech-heavy Nasdaq 100 were both up 0.3% from the New York open.
The stock market move follows strong first-quarter results from JPMorgan, Citigroup and Wells Fargo on Friday, while the failures of multiple regional banks in March slammed the biggest lenders. It highlights that it has delivered benefits and eased investor concerns about the broader banking crisis. The Eurostox Bank Index rose 0.5% and Dutch group ABN Amro gained 1%.
Late Monday, Charles Schwab — Shares haven’t recovered since selling after the crash. Silicon Valley Bank — is set to release results, and traders are wary of signs of weakness in bond portfolios.
One of Schwab’s largest shareholders sold its entire $1.4 billion stake in the bank in March. This was due to our concern that, like SVB, we were unable to hedge our portfolio of mortgage-backed, government and debt securities against rising interest rates.
Investors generally expect another quarter of a percentage point to rise. federal reserve Inflation is 5%, well above the central bank’s target of 2%. Hawkish Fed President Christopher Waller said on Friday that monetary policy needed to be “tightened further” to cool the economy.
The US dollar index rose 0.1% against a basket of six other currencies, but fell 1.8% year-to-date as traders increased expectations that May’s rate hike would be the Fed’s last.
A small sale of US government debt pushed the two-year Treasury yield up 0.02 points to 4.12%. The 10-year bond yield was unchanged at 3.52%.
Asian shares rallied ahead of the country’s first-quarter gross domestic product release on Tuesday after China’s new home prices rose 0.5% in March, the fastest pace in 21 months Did.
Hong Kong’s Hang Seng Index rose 1.7%, while the CSI 300, the leading benchmark for China’s onshore listed companies, rose 1.4%.
https://www.ft.com/content/1ac90358-3d54-4962-be76-6afc650bf2cf European stocks rise as banking contagion threatens to ease