UBS rescue Credit Suisse! Apple, Tesla, and Amazon up over 5%^ in a week!

To the Moo joined discussion · Mar 21, 2023 04:45

After the Swiss National bank loaned Credit Suisse 50 billion Swiss francs to provide additional liquidity, it also facilitated UBS's acquisition of Credit Suisse for 3 billion Swiss francs, curbing a confidence crisis that could have spread to global financial markets.

The Credit Suisse crisis comes after a week of bankruptcies of Silvergate Bank, Silicon Valley Bank and Signature Bank that triggered a surge in pressure on the U.S. banking sector. The completion of the acquisition also means that the Credit Suisse crisis is temporarily over, which will boost global market appetite for equity markets.

In addition, successive banking crises will force central banks in the U.S. and Europe to further slow aggressive interest rate increases, boosting stock market liquidity and investor confidence.

Large-cap technology stocks are back in favor with investors as the U.S. equity banking crisis continues. Over the past week, several U.S. tech ETFs performed strongly, with $iShares US Technology ETF(IYW.US)$ up 7.0%, $Invesco QQQ Trust(QQQ.US)$ up 6.0%, $The Technology Select Sector SPDR® Fund(XLK.US)$ up 5.7%, and $ARK Innovation ETF(ARKK.US)$ up 6.1%.

Technology giants $Apple(AAPL.US)$ rose about 6% in a single week, $Tesla(TSLA.US)$ rose 5.7%, $Amazon(AMZN.US)$ rose 7.7%, $Microsoft(MSFT.US)$rose 9.5%, and $NVIDIA(NVDA.US)$ rose 12.8%. important components of SPY, $Alphabet-C(GOOG.US)$ and $Meta Platforms(META.US)$, rose 12% and 10.2% respectively in the past week.

source：wind，from 2023/03/13 to 2023/03/20.

Technology stocks become defensive assets as banking crisis rages on?

In the wake of the banking crisis, investors are keen to look for companies with a solid track record of performance. Unlike startups, large tech companies like $Apple(AAPL.US)$, $Alphabet-C(GOOG.US)$ and $Microsoft(MSFT.US)$ have huge cash reserves, which makes them less vulnerable to balance sheet declines. The former two also pay dividends, which is a big draw for defensive investors. In addition, large tech companies' main businesses are hardly threatened by banking problems.

Sam Stovall, chief investment strategist at CFRA, said, "The technology sector is more of a safe haven than traditional cyclical sectors, and the fact that it has already undergone a repricing means it looks attractive relative to other areas of the market."

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