The Paris Bourse is trying to salvage its support (7,230 on the CAC40), but the venture is proving complicated by fears of default by two US banks (one of which - SVB.Financial - is giving up on recapitalization, and the other - Silvergate - which specializes in cryptos - is reportedly throwing in the towel).
Investors' doubts about the health of the US financial system are resurfacing.
The CAC40 index, which had lost 2% in the morning (and tested 7,170) had recovered well before the US employment figures (-0.9% to 7,255), plummeted again by 1.9% to 7,175 points: the weekly loss was close to -2.5%.
Note that the Euo-Stoxx50 lost nearly -1.9% (-2% weekly) and London -2%.

Silicon Valley Bank (SVB) has just announced that it has failed to launch a capital increase to bail itself out, after suffering heavy losses on the sale of part of its bond portfolio ($1.8 billion).

The stock of this 40-year-old company, which helps finance Californian technology companies, plummeted by more than 60% last night at the close of Wall Street... and remains suspended this Friday (even though it can no longer cope with withdrawals and return customers' money, which is the very definition of bankruptcy).
It is dragging Signature Bank (-31%) in its wake, which could in turn face major withdrawals ('bankrun').
The US 'banking' sector ETF is experiencing its worst week since autumn 2008, with a weekly decline of almost -10%.

Also in the banking sector, Silvergate Capital, a cryptocurrency-focused institution, continued its slide (-42%) yesterday after announcing its intention to go into liquidation shortly.

These announcements sent US equity markets tumbling on Thursday, as investors feared a domino effect similar to that which precipitated the 2008 financial crisis.
The reopening of trading at equilibrium on Friday was seen as reassuring, but US indices are back on the decline after 1/2 trading, with -0.5% on the S&P500 and -1% on the Nasdaq.

On Thursday evening, the Dow Jones index ended down by almost 1.7%, the broader S&P 500 lost 1.8%, while the Nasdaq composite shed over 2%.

Financial stocks were the main targets, as investors sought to reduce their positions in sectors most sensitive to the current uncertainties.
Bank of America shares shed over 6%, Citigroup around 4% and Morgan Stanley close to 3%.

These fears have logically led to a flight to less risky assets, such as gold and government bonds.
Interest rates are also easing spectacularly, as experts anticipate action by the FED on the interbank market to avoid a freeze (in a climate of mutual suspicion), which would add liquidity.
Our OATs are down 18pts at 2.96%, Bunds are down 19pts at 2.451% and Italian BTPs are down 11pts at 4.28%.

On the other side of the Atlantic, the easing was similar to that in Europe, with yields down 18.5pts to 3.735%, while the 30-year yield also fell below 3.75%.
The long-awaited NFP published at 2.30 p.m. was more of a non-event.

The US economy created 311,000 jobs: this marks a clear slowdown after January's sharp rise (517.000 jobs created), but this is 45% more than the 215,000 new jobs expected.
Wall Street is trying to reassure itself with the unemployment rate at 3.6% and wage growth stabilizing.

Barclays economists were right to issue a serious warning yesterday.
'We believe that solid figures of around 200.000 job creations would be sufficient to trigger a rate hike of 50 basis points at the end of the next FOMC meeting', warned the British bank's teams.
But for the time being, the 'SVB' affair is attracting all the attention, and the big question is whether this is an isolated incident, or the tip of the iceberg of a more systemic problem, given the climate of general over-indebtedness and the bursting of the real estate bubble.
Note that the dollar is being badly shaken, with a brutal loss of -0.9% at around 1.0670/E, which would see it finish the week at its lowest.

Within the CAC40 and SBF-120, banks are suffering, with Sté Générale -5.8%, BNP-Paribas -4.5% and Crédit Agricole -3.5%, not forgetting Scor with -5.5%.

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