The main indices on Wall Street rose during these moments of trading today, Thursday, in conjunction with the decline in fears of a banking crisis, as investors moved towards high-risk assets, which caused volatility in safe havens such as gold.
Investors’ attention turns to the Fed’s favorite data, which is consumer spending data, scheduled for release tomorrow, Friday, in search of indications on the path of the US Federal Reserve’s monetary policy, which would move gold and the dollar.
A second wave of deposit exodus
US Federal Reserve data just reported that the 25 largest US banks saw $120 billion in inflows in deposits in the days following the Silicon Valley crash. It was the biggest weekly drop in the dollar deposits of smaller banks ever. Meanwhile, more than $220 billion has flowed into money market funds over the past two weeks, according to data from Refinitiv.
Meanwhile, Barclays Bank (LON:BARC) reported that the launch of the Federal Reserve’s bank financing program, along with other funding sources, has helped US banks build up large reserves to meet the recent deposit outflows.
“While market sentiment remains fragile, our sense is that deposit outflows from small to large banks are fading as depositors realize they can access and transfer their balances without any hassle,” Joseph Abbate, interest rate strategist at Barclays, said in a note on Wednesday. Hurdles”.
However, “Abate” believes that a second wave of deposit exodus will begin, as money goes to cash funds, pointing out that depositors keep their money in banks thanks to the services provided by banks, but despite the meager returns.
stock alternative
Bank of America (NYSE:BAC) said holding onto cash could be a winning strategy for investors this year, as turmoil in the financial sector mounts and the economic outlook worsens. In a research note, he stated that in the near term, cash is a compelling alternative to the S&P 500 index of US stocks.
Bank of America sees a limited upward path for the US stock index compared to its year-end target of 4,000 points, roughly the same as the index’s current level, while the bank believes cash offers returns of around 5%.
Recently released data
The US quarterly GDP data was released, and it grew by 2.6%, while it was expected to grow by 2.7%, and it recorded a previous reading of 3.2%.
As for US domestic product prices, they increased by 3.9%, according to experts’ expectations, while they recorded 4.4% in the previous reading.
Unemployment claims came in at 198,000, higher than the consensus forecast of 196,000. Especially since it had recorded 191 thousand the week before last.
Thus, the average number of jobless claims rose in 4 weeks to 198.25 thousand, after it recorded 196.25 thousand the week before last.
US stock indices at the time of writing
The Dow Jones Industrial Average rose 0.3% to 32,804 points.
The Standard & Poor’s 500 Index rose by 0.5%, to 4,048 points.
While the Nasdaq index jumped 95 points, or 0.8%, to record 12,019 points.
Markets at the time of writing
Spot gold rose 0.3% at $1,970 an ounce.
While US gold futures rose 0.18% to 1988 dollars.
The dollar index rose 0.5%, to record 101.8 points.
Brent crude futures rose by 0.5%, to $78 a barrel.
The US West Texas Intermediate crude price rose by 0.9%, at $73.6 a barrel.