Equity markets tumble despite US Government assurances on SVB deposits
US Equity markets opened lower by about 1% on Monday, following two consecutive daily declines late last in the wake of the unfolding collapse of tech-heavy Silicon Valley Bank and crypto-focused Signature Bank.
The broad S&P500 index was down by 1.2% in the first 10 minutes of trading, the NASDAQ by 1.2%, and the DJIA by 0.4%.
European exchanges are trading off by between 2-4% on Monday, playing some catch-up to the Friday declines in the US.
Shares of publicly traded Retail FX and CFD brokers are also taking it on the chin, with Swissquote down Monday by 7.5%, NAGA Group off 6.8%, XTB down 3.6%, and IG down 3.8%.
Interestingly, crypto prices were buoyed after Signature Bank deposits were included in the US Government’s announcement that all depositors at the failed banks would be made whole. USDBTC was trading up by more than 6% on Monday to $22,450, while Ethereum was at $1,590, up 3.4%.
US Treasury Secretary Janet Yellen made it clear over the weekend that that Government was not going to bail out SVB (and later Signature Bank), but instead was going to focus on the bank’s depositors – and that is exactly how things played out late Sunday and into Monday.
But the worry that this could all continue to ripple out continued in the markets on Monday, with some early increases in US Equity Futures turning to the aforementioned losses once markets opened for business in the morning US time.