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Gold fell sharply on Monday while stocks and oil climbed after sale of Silicon Valley Bank to First Citizens Bank, IMF chief warns risks to financial stability have increased, Saudi Aramco to build $10B refinery in China, and more financial news.
Wall Street rallied on Monday, and oil rose amid optimism in the banking sector, Yahoo Finance reported.
Futures for the S&P 500 rose 29.27 points or +0.74%, while the Dow Jones soared 291.31 points or +0.90%, while the NASDAQ climbed 26.06 points or +0.23% as of 9:37 AM EDT.
US treasuries were up on Monday, with the benchmark 10-Year Treasury rising +0.114 to yield 3.492%, while the 2-Year Treasury climbed +0.184 for a yield of 3.966%, as of 9:41 AM EDT.
Oil prices rose on Monday after oil exports from Iraqi Kurdistan via Turkey were halted, signaling a potential hit in demand for crude.
In oil futures, WTI crude was up +1.95% and trading at $70.61 a barrel, while the benchmark Brent crude climbed +1.69% and traded at $76.26 a barrel, as of 8:39 AM CDT.
Gold prices fell sharply on Monday with heavy profit-taking pressure and long liquidation from futures traders. Silver was down mildly as well. As of 9:46 AM EDT Monday, gold was down -30.70 and trading at $1947.50, while silver dropped -0.35 and was trading at $22.85, Kitco reported.
The Federal Deposit Insurance Corporation (FDIC) announced on Sunday that First Citizens Bank & Trust has entered a purchase agreement to acquire all deposits and loans of Silicon Valley Bank, FOXBusiness reported.
“The 17 former branches of Silicon Valley Bridge Bank, National Association, will open as First–Citizens Bank & Trust Company on Monday, March 27, 2023,” the FDIC said in a statement. “Customers of Silicon Valley Bridge Bank, National Association, should continue to use their current branch until they receive notice from First–Citizens Bank & Trust Company that systems conversions have been completed to allow full–service banking at all of its other branch locations.”
Kristalina Georgieva, chief of the International Monetary Fund, warned on Sunday that due to a number of factors, including the war in Ukraine, monetary tightening, “scarring” from the pandemic, and global growth slowing below 3 percent, have added increased risks to financial stability, and stressed and “the need for vigilance” following the recent turmoil in the banking sector, the Jakarta Post reported.
“Uncertainties are exceptionally high,” Georgieva, adding that the outlook for the global economy is likely to remain weak over the medium term.
“At a time of higher debt levels, the rapid transition from a prolonged period of low interest rates to much higher rates–necessary to fight inflation–inevitably generates stresses and vulnerabilities, as evidenced by recent developments in the banking sector in some advanced economies,” Georgieva added. “It is also clear that risks to financial stability have increased.”
Saudi Aramco announced plans to build a $10-billion refining and petrochemical complex in China with a capacity of 300,000 barrels of crude per day in order to take advantage of the country’s growing fuel and chemical demand. Saudi Aramco will supply 201,000 barrels per day of the 300,000 barrels as part of a larger strategy to secure long-term demand for its oil, OilPrice.com reported. The complex is scheduled to be completed in 2026.
