US stocks are rallying after several banks raised their dividends and China moved away from its strict COVID policy. Wall Street appears to be on the verge of determining how much central banks can pick up on short-term rates, helping long-term investors take positions. We’ll see if the inflation spike is in place, but for now some traders are comfortable with the idea that the ECB will bring rates back into positive territory and the Fed easily has some massive rate hikes on the way. the table.
US banks pass stress tests
Many major US banks celebrated the results of the stress tests with a sharp increase in their respective dividends. Morgan Stanley, Goldman Sachs, Bank of America and Wells Fargo increased their dividends, while JPMorgan and Citigroup kept their dividends unchanged. Given the uncertain economic environment, you cannot fault the decision to refrain from increasing payments, as a severe downturn in economic activity could lead to the need for additional capital.
JPMorgan and Citigroup may need to free up cash later this year for the new required capital levels, which could make them the least attractive of the banking giants.
One of the crypto sagas of the past week occurred when physical crypto futures exchange CoinFLEX halted all withdrawals. This week, the crypto exchange announced that it would be launching a Recovery Value USD token. They are counting on private investors to cover half of the issues and that if this continues, they seem on the way to surviving this liquidity crisis. It will take some time for investors to feel that liquidity issues are in the rearview mirror.
Bitcoin remains anchored around the $20,000 level and will not break out until Wall Street is convinced that a broader downturn is not occurring.
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