FDIC CONSIDERS INCREASED FEES FOR BIG BANKS
The Federal Deposit Insurance Corp. (FDIC) may require larger banks to pay more to manage the $23 billion in costs from recent bank failures. The FDIC plans to propose a special assessment in May to help refill a deposit insurance fund that has dropped to $128 billion after the failures of Silicon Valley Bank and Signature Bank. In response to political pressure to exempt small banks, the regulator has acknowledged its ability to determine fee amounts. As a result, the KBW Regional Banking Index, which includes 50 lenders, recovered from losses and increased by 0.6% during Wednesday’s trading session.
STOCK MARKET BOOST
The stock market recovered on Wednesday as all three major stock market indices – NASDAQ, S&P 500, and Dow Jones Industrial Average – showed a positive performance. This was mainly attributed to the improved performance of tech companies such as Amazon and Meta. The NASDAQ index, which is mainly focused on tech-related companies, is expected to have its best financial quarter since the last quarter of 2020.
FUTURE MARKETS
The futures markets remain uncertain whether the Federal Reserve will carry out another rate hike later in May. Still, they are optimistic that interest rates will be reduced later in 2023. Meanwhile, two-year Treasury yields have slightly risen.
INTERNATIONAL FINANCIAL NEWS
European stock markets continued to rise on Thursday as banking stocks increased by 2%, and many banks had lower credit default swaps. Despite being affected by banking uncertainty, commercial real estate stocks have shown signs of improvement.
CHANGE IN OIL PRICE
After several years of disputes, there will be a significant transformation in the world’s most critical oil price that will change how crude oil is priced. It has been stated that the price of millions of daily petroleum transactions will be based on oil supplies from west Texas. This change is because the current benchmark, Dated Brent, is running out of oil that can be traded to maintain its reliability. Dated Brent helps set the price of around 2/3 of the world’s oil.
