Weekly News 2023/03/06-2023/03/12

 U.S. stocks closed down on Friday. The Dow fell 345.22 points, or 1.07%, to 31909.64; the Nasdaq fell 199.47 points, or 1.76%, to 11138.89; the S&P 500 fell 56.73 points, or 1.45%, to 3861.59 points. The three major U.S. stock indexes all recorded losses this week. The Dow fell 4.44% in total, and the Dow recorded its largest weekly decline since June. The S&P 500 fell 4.55%, and the Nasdaq fell 4.71%.

The CBOE Volatility Index (VIX), which measures the panic among investors in U.S. stocks, climbed to 27.60, the highest level since October 25 last year, after the news of the collapse and takeover of Silicon Valley Bank. Silicon Valley Financial Group announced on Thursday that it plans to raise more than $2 billion to offset lost bond sales, sending its shares down more than 60% on the day. Silicon Valley Bank, which has about $209 billion in assets and is the first insured institution to fail this year, has been shut down by California regulators, the Federal Deposit Insurance Corporation.

News of the bankruptcy and receivership of Silicon Valley Financial Group sent a broad sell-off in the financial sector as investors grew concerned that higher interest rates would cause banks to face loan losses as borrowers defaulted.

In terms of economic data on Friday, the U.S. Labor Department reported that U.S. non-farm payrolls increased by 311,000 in February, higher than market expectations of 225,000. Average hourly earnings rose 0.2% in February, below expectations for a 0.4% gain. The average hourly earnings data pointed to a slowdown in wage growth. The unemployment rate rose to 3.6% in February from 3.4%.

Analysts said that although the increase in non-farm payrolls was higher than expected, the rise in the unemployment rate and the slowdown in wage growth was encouraging for the Fed. The United States will enter daylight saving time this Sunday.

 The U.S. Federal Aviation Administration (FAA) on Friday approved Boeing Co to resume deliveries of its wide-body 787 Dreamliner next week, saying the planemaker addressed concerns it had recently raised. The FAA previously said Boeing (NYSE: BA) had suspended deliveries of the 787 jets after the company's review of certification records uncovered data analysis errors related to the jet's forward pressure bulkhead. Boeing has addressed the issues, the FAA said.

Silicon Valley Bank Financial Group (NASDAQ: SIVB) suspended trading before the market. Before the suspension, it rose from a drop of 60% to a rise of 50%, waiting for the news to be published. White House economic adviser RAMAMURTI said the Treasury Department is closely monitoring the possible impact of the SVB. Yesterday, Silicon Valley Bank Silicon Valley Bank of the United States exposed a liquidity crisis, and many institutions suggested withdrawing funds, which ignited market concerns about US bank stocks.

Andreas Braun, chief technology officer of Microsoft (NASDAQ: MSFT) Germany, revealed, “We will launch GPT-4 next week, which will be a multimodal model that will provide completely different possibilities such as video.” The technology has been developed to basically “work in all languages”, which means “you can ask a question in German and get an answer in Italian”.

TSMC (TPE: 2330) may reconsider setting up a 12-inch factory in Singapore because the local area is willing to provide land, water and electricity, tax reduction and other related subsidies, as well as sufficient manpower assistance, and the demand from automotive customers such as Infineon is quite strong.

 Crypto markets fell like dominoes on Friday after the United States proposed a 30 percent tax on cryptocurrencies. Bitcoin faced frenzied selling pressure, plunging more than 9%. Additionally, Ethereum and other cryptocurrencies plummeted. They have now extended their weekly losses. Investors are in panic because of the significant impact tax rates have on mining and trading digital assets.

These effects have had far-reaching ripples in the uncertain waters of the cryptocurrency industry. The two largest cryptocurrencies, Bitcoin and Ethereum, have both experienced the aftermath of the Silvergate crisis. Bitcoin (BTC) fell 4.5 percent, from $23,500 to $22,259, wiping $20 billion off its market value. It was followed by ethereum, the second-largest token in the cryptocurrency market, down 4.6 percent, with a market cap of just over $193 billion.

With both tokens showing bearish characteristics in early March, no doubt caused by the Silvergate incident, there are also concerns about how the increasingly tough regulatory outlook in the U.S. will affect the cryptocurrency market and could lead to further declines for Bitcoin.

On CoinMarketCap, the global cryptocurrency market traded at $931.21 billion, down 6.82% from the previous session. Bitcoin was performing at $19,828.06 a plunge of 8.84%. Meanwhile, Ethereum fell at least 9.5 percent to the $1,396 level. Other cryptocurrencies such as Binance's token BNB fell more than 6%, while XRP fell 7.3%, Cardano fell 3.4%, Polygon fell 7.8%, and Dogecoin fell more than 10.4%.

Bitcoins weekly performance is currently down nearly 12%, while Ethereum is down more than 11%. Polygon and Dogecoin are down more than 14% and 15%, respectively, while BNB and Cardano are down 6% and nearly 9%, respectively, in seven days. Shiba Inu was the most popular cryptocurrency on Friday, but fell nearly 8% in 1 day.

 Gold prices jumped nearly 2% on Friday, boosted by a fall in U.S. Treasury yields and broader financial markets, with fears of a bank failure overshadowing a strong U.S. jobs report, driving safe-haven flows into the metal.

The woes at the technology-focused Silicon Valley Bank financial group rippled through global markets, hitting bank stocks and boosting interest in gold. Gold is often seen as a safe-haven asset in times of uncertainty. David Meger, director of metals trading at High Ridge Futures, said: “I think the main focus is on yields, and yields are down today, which is a boost for the gold market.”

U.S. Treasury yields fell amid turmoil in financial markets, boosting gold, which doesn't pay any interest. Previously, although the US non-farm payrolls data increased more than expected in February, the rising unemployment rate and slowing wage growth were still good news for the Fed. If the Fed insists on raising interest rates again this month to 50 basis points, unless the CPI report released next week shows that inflation is still very strong.

The well-known financial blog “Zero Hedging” commented on the February non-farm payrolls: Some traders believe that it is obvious that the federal funds rate does not have a huge impact on the real economy. It will affect housing, banks and start-ups, but beyond that, the impact is limited. Traders see real economic growth now as a result of massive government spending

Spot silver rose 1.9% to $20.445 an ounce, but was still on track for a weekly loss of 3.7%. Platinum rose 1.3% to $956.95, while palladium fell 1% to $1,375.12. Both weekly balances are set to fall.

 Oil prices climbed more than 1 percent on Friday after U.S. jobs data showed a slowdown in wage growth. However, Oil prices have tumbled more than 3 percent this week amid concerns over U.S. interest rate hikes. Expectations of further interest rate hikes in the world's largest economy and in Europe have clouded the outlook for global growth and sent both crude benchmarks sharply lower this week.

However, a government report on Friday revived hopes of moderating inflation, amid signs that the labor market ravaged by the coronavirus is returning to normal, and the Fed may have less reason to be as aggressive or aggressive in raising interest rates as some believe.

Fed Chairman Jerome Powell warned of higher and possibly faster rate hikes, saying the central bank was wrong to initially view inflation as “transitory.” The Fed's next monetary policy meeting is scheduled for March 21-22. “Oil prices have been volatile on renewed fears of Fed rate hikes,” said Price Group analyst Phil Flynn.

The U.S. economy added a large number of jobs in February, but wage growth slowed month-on-month and the unemployment rate rose, pointing to some loosening in the labour market and prompting financial markets to dial back expectations for a 50 basis point rate hike by the Federal Reserve this month.

On the supply side, Iran and Saudi Arabia agreed on Friday to rebuild relations, ending seven years of hostility. The hostility poses a threat to stability and security in the Gulf region and fuels conflict in the Middle East from Yemen to Syria. Investors are closely watching export cuts from Russia, which decided in March to cut oil production by 500,000 bpd.

 The dollar weakened on Friday after U.S. non-farm payrolls data for February showed slower wage growth, suggesting that easing inflationary pressures could keep the Federal Reserve's pace of rate hikes dovish, reducing the greenback's appeal.

The U.S. economy added jobs at a blistering pace in February, but slowing wage growth and rising unemployment prompted financial markets to trim expectations for a 50 basis point rate hike when Federal Reserve policymakers meet in two weeks.

The plunge in U.S. bond yields was exacerbated by the collapse of Silicon Valley Bank Financial Group, the biggest bank failure since the financial crisis, as California regulators moved swiftly to protect depositors at the lender, whose clients were mostly startups.

“People are concerned about potential stress in the banking sector,” said Kevin Flanagan, head of fixed income strategy at WisdomTree.

The yield on the benchmark 10 year U.S. Treasury note fell more than 22 basis points to below 3.70%, its biggest one day drop in four months. Bond yields move inversely to their prices.

EUR/USD was up 0.57% at $1.064 and GBP/USD was at $1.2024, up 0.83% on the day. Andrzej Skiba, head of the BlueBay U.S. fixed income team at RBC Global Asset Management in New York, said the “pretty important” consumer price index (CPI), due to be released on March 14, is now in focus. “Given what happened in the U.S. banking sector, the focus is now shifting to CPI data and overall financial conditions.” The dollar jumped against the yen briefly after the Bank of Japan left policy unchanged.

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