With the fate of Credit Suisse Group AG finally decided, investors were prepared for another gut-wrenching week of trading.
None of the Midsize US banks ask FDIC to Insure Deposits for Two Years.
Money managers talked to nervous clients, planned out strategies and organized their next trades with just hours to go before Asian markets opened. Many of them rolled up their workstations from home, settling in for a long night, and made plans to be in the office before dawn.
Alberto Tocchio, a fund manager at Kairos Partners in Milan, said in the last hour I had already had few calls with fund managers and one big client. I will be attached to the news from now until late night, trying to understand what to do in the early morning. There is still plenty of anxiety on Wall Street as a result of the UBS Group AG takeover of Credit Suisse. The turmoil at Credit Suisse and the collapse of three regional lenders have sparked concern about the health of the banking industry and revived memories of the 2008 financial crisis.
Unknown Unknowns No Weekend for Traders as Bank Woes Persist
Credit Suisse shares have suffered from a series of negative news over the past few years, with the stock down 98% from its peak in 2007 and a drop in nearly 90 billion in market cap over that period. In the wake of the collapse of three US regional banks, a 12% plunge in the European banking sector index was caused by a renewed selloff in the Swiss lender's shares last week.
Mark Grant, chief global strategist at Colliers Securities, said retail clients and institutions are increasingly worried about where their money is being held. He urging clients to be conservative because of the instability he sees in the financial system that has been created by central banks that is rapidly hiking rates.
He said that he received a lot of calls over the weekend from clients and institutions. We will see how things are in the morning but I don't expect them to be too good. Anthony Cohen, a senior listed derivatives broker at Market Securities, takes calls from clients who want to trade at the market open. He said I never saw such volatility on bonds and stocks until now. I don't feel the panic yet in the way clients are trading. The turmoil means opportunity for other traders. Andrea Tueni, head of sales trading at Saxo Banque, said he relished the chance to start trading on Monday.
When there is action, I feel it's quite nice, he said. It's tough for some, and that is why no one is rejoicing. The market environment before that was flat with a central banks and inflation-recession combo, and it was quite repetitive.