It’s looking gnarly out there for bankers in the United States and investors in their stocks.Here’s what’s on everyone’s mind:

US regulators could be facing a rerun of the winter 2022-2023 regional banking crisis. Prospects of more trouble have captured the imagination of the financial press on both sides of the Atlantic after earnings in the US banking industry fell 45% last year and dismal earnings from New York Community Bancorp sparked a two-day run on regional bank stocks.

THE BACKGROUND- Bank nerds among our readers will remember that three high-profile regional lenders (Silicon Valley Bank, Signature Bank, and First Republic Bank) went bust in a single week, forcing US regulators to step in amid a run on all three. The irony: New York Community scooped up Signature Bank after regulators shut it down.

What’s worrying folks now: Banks in the US hold USD 2.7 tn in commercial real estate loans by most estimates — and pundits think regional lenders account for about 80% of that figure. Tenants are now letting go of leases after nearly four years of low use after covid and the post-covid shift to work from home. That comes as developers are already struggling to make payments amid low occupancy and high interest rates.

Possibly making things worse: Loans to what some in the industry like to call “shadow banks.”US lenders have more thanUSD 1 tn in exposure to non-bank financial firms including hedge funds, private equity firms, and mortgage lenders, many of whom are now under stress amid high interest rates.

Go deeper: American Enterprise Institute | CNN | Wall Street Journal | Financial Times

MEANWHILE- The S&P 500 closed above the 5,000 mark for the first time on Friday. The milestone can partially be attributed to Nvidia and Meta, which rose over 30% since we rang in 2024. The move was also driven by investor confidence fuelled by promising US inflation data, a strong run of earnings reports, and widespread expectations of monetary easing. (Financial Times | CNN Business)

EGX30

28,411

+1.8% (YTD: +14.1%)

USD (CBE)

Buy 30.83

Sell 30.96

USD at CIB

Buy 30.85

Sell 30.95

Interest rates CBE

21.25% deposit

22.25% lending

Tadawul

12,203

+0.3% (YTD: +2.0%)

ADX

9,344

-0.2% (YTD: -2.4%)

DFM

4,184

+0.6% (YTD: +3.1%)

S&P 500

5,027

+0.6% (YTD: +5.4%)

FTSE 100

7,573

-0.3% (YTD: -2.1%)

Euro Stoxx 50

4,716

+0.1% (YTD: +4.3%)

Brent crude

USD 82.19

+0.7%

Natural gas (Nymex)

USD 1.85

-3.7%

Gold

USD 2,039

-0.5%

BTC

USD 47,685

+0.5% (YTD: +13.4%)

THE CLOSING BELL-

The EGX30 rose 1.8% at Thursday’s close on turnover of EGP 4.9 bn (34.2% above the 90-day average). Foreign investors were net buyers. The index is up 14.1% YTD.

In the green: Madinet Masr (+7.9%), Ibnsina Pharma (+5.5%) and Telecom Egypt (+4.7%).

In the red: TMG Holding (-6.5%), Sidi Kerir Petrochemicals (-1.9%) and E-Finance (-0.2%).

Tags: