The Silicon Valley bank has been the champion in financial markets for several dozen hours, and its shares fell more than 60 percent on Thursday. After the bank announced that it needed to raise capital by more than two billion dollars to save itself from collapse.
The bank, which bears the name Silicon Valley in its name, mainly deals with financing technology companies and start-ups from California. The problems began when interest rate hikes hurt the stock market, and these companies began to lose value dramatically last year. As a result, the bank associated with this sector began to lose deposits. For most of last year, nearly $34 billion of it flowed in this way. The bank, wanting to improve its liquidity, has begun selling bonds of technology companies in which it had previously invested. Since the prices of these bonds also fell sharply last year, $1.8 billion has been lost in these transactions. At this point, the danger of losing liquidity looked in his eyes, so he decided to raise capital, which was seen as a desperate move.
Even worse, the Silicon Valley bank panic spread to the entire stock market. In reality Shares of Bank of America and Wells Fargo fell by 6.2 percent, JP Morgan 5.4 percent, Citigroup and Morgan Stanley by about 4 percent, and Charles Schwab 12.8 percent. The Dow Jones Banking Index fell 6.5 percent. to its lowest level since October.
The decline in the United States triggered a wave of selling, which is now spreading across Asia, as the Hong Kong stock market, like the Australian one, fell more than 2 percent. It is also clear that Germany’s index futures are in a downtrend, so most likely the wave of declines will soon reach Europe as well.
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2. The government is still thinking about how to reduce wholesale housing purchases
The government is taking a further step in easing the so-called draft flapper bill, that is, the one that was originally supposed to prohibit the purchase of more apartments at one time. Initially, according to the project, people who had at least five apartments could only buy more apartments at the rate of one per year. Then it was decided that this restriction applies only to investment funds and not to natural persons. Then there was the idea that instead of a ban, there would be a higher tax only on civil law transactions when buying more apartments. Development and Technology Minister Waldemar Buda, who prepared these regulations, said at RMF FM that banning simple purchases for people who already own at least five flats would harm developers.
I think that buying more apartments, if someone has the means, at a time when apartments can stand empty and developers may have a problem because apartments are not bought, this is not the best solution.
The minister’s last thought is Limiting the number of apartments purchased, but only in one investment. That is, if the developer releases apartments in a certain building for sale, then it will not be possible to buy more than five apartments in this particular complex in order to avoid a situation where a few wealthy people buy all the apartments in a short time. However, the Minister mentions this idea in the form of “maybe”. So the brainstorming continues and nothing is known for sure.
3. Again, a slightly worse batch of data from the US labor market
Data from the US labor market hasn’t looked bad lately, but it’s starting to look less good than before. This is important because, according to the words of the Federal Reserve Chairman, Jerome Powell, the US Central Bank will make its next decisions on raising interest rates depending on the data received on an ongoing basis. Of course, the correlation is that the worse the data, the lower the chances of accelerating rate hikes.
A few days ago it turned out that the number of vacancies in US companies decreased slightly, while on Thursday there was data on an increase in the number of applications for unemployment benefits and an increase in the number of layoffs from companies. Last week, there were 211,000 applications for unemployment benefits, an increase of 21,000 from the previous week. more than last week. This is the largest increase in five months, and the same number is 211,000. It is the highest in two months.
In contrast, the Challenger, Gray and Christmas layoffs report showed just that In February there were nearly 78,000, which is 5 times more than last year. In January, there were more than 100,000 people, so in the first two months of this year, more than 180,000 people lost their jobs in this way in the United States. People, the highest rate since 2009. About half of these layoffs have occurred in the tech sector. In recent weeks, Amazon, Facebook, Google and Microsoft, among others, have reported mass layoffs amounting to several thousand or even several thousand people.
Today, the most important data from the US labor market, those of new jobs and the unemployment rate, will be released at 14:30.
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4. The number of job advertisements increased by 16.5%. within a month
In the US, the job market has broken down a bit, and in Poland it’s starting to pick up again. in feb according to the data Grant Thornton and Element, more than 297,000 jobs have appeared on recruitment portals. job offers. That’s about 42,000. More than in January, so it’s a 16.5 percent increase. in one month. It is also 0.6 percent. more than a year ago. In January, there were 17 percent of such offers. Less than a year ago, that was the worst result in two years.
The January data published a month ago, which showed a drop in the number of job offers by up to 17 percent, was very disturbing and suggested that perhaps something had happened in Polish employers and they were starting to suspend hiring. Fortunately, the latest data for February showed that these fears are exaggerated. The job market in Poland remains strong.
– said Monica Smolich, partner at Grant Thornton, citing the report.
The reading of job vacancies for February is the highest for that month in at least four years since comparable data has been available. The largest increase in job offers, up to 64 percent, can be seen in finance departments, including 75 percent in finance. The number of offers in the case of accountants is increasing year by year. On the other hand, the number of job offers, which is still the largest, is decreasing, that is, job offers for cashiers and sellers (11% less than last year) and drivers (30% less than last year).
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5. The new NBP inflation forecast shows higher inflation at the end of 2025 than previous forecasts
The Polish National Bank’s new inflation forecast assumes that the inflation rate in the fourth quarter of this year will be 7.6 per cent. A year later, it will be 4.8 percent, and at the end of 2025, 3.1 percent. – Data results presented by the President of the National Bank of Poland, Adam Glabinski, during his press conference.
The interesting thing is that In the previous projection, published in November, inflation at the end of 2025 would have fallen to 3%. So far it is the lowest, only by 0.1 percentage point, but still higher. Thus, the new projection assumes a slight increase in inflation at its horizon, rather than a decrease. However, this does not affect the thinking process of the Monetary Policy Board, which currently does not want to raise interest rates.
As for the end of the current year, inflation was in the previous projection at the level of 8%. So now it’s 0.4 percentage point higher. minimum. At the end of 2024, it was 4.9 percent previously. – so the forecasts are down here by just 0.1 percentage point.
President Glabinski said during the conference that he hopes inflation will fall below 7 percent at the end of the year. And that it would then be possible to lower interest rates. In his opinion, there will be no problem with core inflation, since it will align with the core inflation index. On the other hand, the Monetary Policy Committee still does not officially announce the end of the rising cycle and leaves itself the possibility of moving prices up, if inflation starts to rise again. Its peak, according to Glapiński, will appear in the February data at the level of 18.5 percent.
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