Markets last week 20/03/2023

United States

During the week, the major indexes displayed a mixed performance due to various factors, including bank sector stress, concerns about a potential economic slowdown, and the possibility that the Federal Reserve may moderate or pause its rate-hiking cycle. Within the S&P 500 Index, the returns of different sectors varied greatly, with communication services and technology shares performing well, while financials and energy shares experienced significant losses. Mega-cap tech shares, which have minimal exposure to regional banks and generate substantial free cash flow, outperformed other sectors. According to Russell indexes, large-cap growth stocks surpassed their value counterparts by 5.80 percentage points.

Over the weekend, concerns regarding the failure of Silicon Valley Bank eased, despite the closure of another large regional bank, New York’s Signature Bank, which had significant exposure to cryptocurrency markets. On Sunday, March 12th, the Fed, the Federal Deposit Insurance Corporation (FDIC), and the Treasury Department assured all depositors of SVB full access to their funds on Monday morning. The Fed also made additional funding available to banks to safeguard deposits and prepared to address potential liquidity pressures. Furthermore, the Fed announced that it was conducting an internal review of its supervision and regulation of SVB, which was overseen by its San Francisco branch.

On Tuesday, the market rallied on the hope that the Federal Reserve would adjust its monetary policy in response to recent events. This led to the belief that the previously anticipated increase in rate hikes from 25 basis points to 50 basis points was unlikely. By the end of the week, CME Group data showed that futures markets no longer priced in the possibility of a 50-basis-point hike, compared to a 40% chance the previous week. Additionally, markets indicated a 39% chance of the Fed keeping rates steady at its upcoming meeting on March 21-22 and a nearly 99% probability of the federal funds target rate ending the year lower than its current range of 4.50% to 4.75%.

However, news on Wednesday regarding European banking giant Credit Suisse (CS) experiencing issues caused the market to decline again sharply. Despite this, many analysts noted that the Swiss bank’s problems were different in nature.

The banking stresses also impacted credit markets, causing investment-grade credit spreads to widen to a four-month high. Shorter-duration bonds and bonds issued by regional banks experienced significant fluctuations, while no new deals were made during the week due to volatility. The high-yield market was also relatively quiet.


Fears of strain in the financial system caused shares in Europe to plummet. In local currency terms, the pan-European STOXX Europe 600 Index ended the week 3.84% lower, with major stock indexes declining significantly:

  • France’s CAC 40 Index dropped 4.09%
  • Germany’s DAX Index decreased by 4.28%
  • Italy’s FTSE MIB Index lost 6.55%
  • UK’s FTSE 100 Index suffered its largest weekly drop since early June 2020, falling 5.33%

The banking sector within the STOXX Europe 600 Index declined the most, reflecting concerns over counterparty risk in the financial system due to challenges faced by Credit Suisse. Shares of the Switzerland-based financial giant, which had recently announced an ambitious restructuring plan, were sold off after the chair of Saudi National Bank announced that it would not invest further capital in the company. This news followed Credit Suisse’s delay in releasing its annual report due to “material weakness” in its financial reporting controls. However, on Thursday, news that the Swiss National Bank had offered to provide Credit Suisse with liquidity and the company’s attempt to strengthen itself “preemptively” by borrowing over USD 50 billion from the Swiss National Bank gave the stock a boost. Despite this, media speculation persisted that further action may eventually be necessary.

As part of its ongoing efforts to control high inflation, the European Central Bank (ECB) announced a 0.5 percentage point increase in its deposit rate to 3.0%. The ECB emphasised that future decisions would depend on data but did not provide guidance. The bank’s projections showed an average inflation rate of 5.3% in 2023 and a growth rate of 2.1% in 2025. The forecast for this year’s growth was revised upward to 1.0%, citing lower energy prices and the economy’s resilience in the face of recent challenges. The ECB staff estimated that economic growth would be 1.6% in 2024 and 2025. However, the ECB warned that the forecasts were more uncertain than usual because they were created before March 1st and did not include the latest developments.

According to the Office for National Statistics (ONS), the UK jobless rate remained steady at 3.7% during the three months leading up to January, which was close to a record low. However, the growth of total pay for the period decreased from 6.0% to 5.7%.

The ONS also reported that in January, the number of working days lost due to strikes decreased to 220,000. However, this past week, more than 400,000 workers, including junior doctors in the National Health Service, teachers, civil servants, rail workers, and BBC staff, went on strike.


The Nikkei 225 Index and the broader TOPIX Index both recorded moderate gains for the week in Japan, increasing by 0.78% and 0.60%, respectively. The stock markets were resilient despite a sell-off in Japanese bank stocks on Friday due to a decline in their U.S. counterparts and the Bank of Japan’s decision to keep its accommodative monetary policy unchanged in March. The BoJ’s commitment to its ultra-loose stance led to a significant drop in the yield of the 10-year Japanese government bond (JGB), ending the week at 0.42%, down from 0.50% the previous week. The yen weakened against the U.S. dollar, trading around JPY 136.7, compared to JPY 135.8 the prior week, due to the dovish BoJ, better-than-expected U.S. economic data, and hawkish messaging from the Fed, which raised concerns that central banks may prolong interest rate hikes.

The Bank of Japan (BoJ) kept its monetary policy unchanged at the final meeting chaired by outgoing Governor Haruhiko Kuroda, who will be stepping down in April. The central bank maintained its short-term interest rate at -0.1% and its 0% target for 10-year Japanese government bond (JGB) yields. The BoJ also reiterated its commitment to yield curve control (YCC), which allows 10-year JGB yields to fluctuate within a range of about plus and minus 0.5% from the target level through its large-scale bond buying.

Investors are now turning their attention to the BoJ’s April meeting, the first under incoming Governor Kazuo Ueda, who was confirmed by parliament on Friday. Ueda has suggested various possibilities for the future of the YCC framework while stressing that the outlook for underlying prices will determine whether it will be reviewed towards normalisation. Some speculate that the BoJ may further widen the range of JGB yield fluctuations or abandon the framework altogether.


Global banking concerns tempered optimism for an economic rebound and further monetary aid from Beijing, resulting in a mixed outcome for Chinese stocks at the end of a volatile week. The Shanghai Stock Exchange Index climbed 0.63%, while the blue-chip CSI 300 Index declined 0.21% in local currency. In contrast, the benchmark Hang Seng Index in Hong Kong rose by 1%.

To boost the economy and ensure liquidity, the People’s Bank of China (PBOC) announced it would reduce the reserve requirement ratio (RRR) for most banks by 25 basis points for the first time this year. This move follows the same magnitude of reduction made in December. Additionally, the PBOC provided a larger-than-anticipated RMB 481 billion through its one-year medium-term lending facility, as opposed to the RMB 200 billion in maturing loans. The central bank maintained the medium-term lending rate, as anticipated.

PBOC Governor Yi Gang’s unexpected reappointment for another term, despite expectations of his retirement, appeared to have a stabilising impact on the markets. The previous week had seen a reshuffle of central government institutions under the State Council, China’s cabinet. Some analysts interpreted Yi’s reappointment as the government’s desire to prioritise the economy’s support amid rising growth headwinds by maintaining financial stability.

Market Indices 


Weekly Index

Year to Date



Sterling Pound


Sterling Pound



FTSE 100 Index







S&P 500 Index







Euro Stoxx 50







Hang Seng Index





MSCI Emerging Markets Index





More news

  • Markets last week 26/09/2023

    United States In the United States, major equity benchmarks experienced a decline over the past week in response to the Federal Reserve’s hawkish outlook and increasing U.S. Treasury yields. The S&P 500 Index suffered its most significant single-day loss in six months on Thursday, marking its third consecutive week of losses. In addition to concerns

    September 26, 2023
  • Markets last week 18/09/2023

    United States The major stock market indices closed with a mixed performance, with value stocks taking the lead as U.S. benchmark West Texas Intermediate oil prices surged above $90 per barrel for the first time since November 2022. Notably, large-cap stocks outperformed their smaller counterparts. Conversely, the technology and growth stock sectors experienced a slowdown

    September 18, 2023
  • Markets last week 12/09/2023

    United States Stocks concluded the shortened holiday week on a downbeat note, with rising interest rates driven by positive economic indicators. Growth-oriented stocks outperformed their value counterparts, while large-cap stocks notably outshone small-caps. A significant drop in Apple’s stock price, which carries substantial weight in the S&P 500 Index, was triggered by news that Chinese

    September 12, 2023
  • Case Study – The expat journey

    The expat journey Client: Married couple from the UK with two children aged 10 and 13, living in UAE for the last seven years. Aged 55. Scenario High-income earners combined over 100K AED per month – Solution – General Investment account to allow regular contributions to investment/retirement savings. Plan to retire in the UK at

    September 12, 2023
About Author
Avatar photo
Thapelo Mphoreng

How can we help you?

If you would like to speak to one of our advisers, please get in touch today.

Existing Client

Contact Us