Credit Suisse, UBS – How to trade these stocks ahead of the Fed
While Credit Suisse and UBS shares look set for a rocky ride on Wall Street, European bank stocks are coming off lows. IG’s Angeline Ong says the near-term direction of trade will be driven by the Fed.
Rocky ride
Credit Suisse and UBS shares look set for pain.. Ahead of the Wall Street open, Credit Suisse Group AG - ADR listed shares look set to tumble some 57%. This after falling almost 7% in the previous session. UBS AG's US listed shares look set to tumble more than 3% at the opening bell on Monday after losing more than 5% in the previous sesion.
Stabilising
We're seeing a ripple effect, not just in equities but in bonds, commodities like oil and gold, as well. This, as UBS swallowing its rival Credit Suisse, failed to sooth investor concerns over the health of the banking sector. Market volatility gauges are moving higher, but it must be said that it feels like the market is stabilising. The VIX is coming off earlier highers. European banks, which saw big losses earlier, are now coming off lows too. Some traders citing short covering and buying on the dip.
Fed
So, what's going to propel this trade? Well, in the near-term, it's the Fed. Amid the now mixed rate hike bets, investors are waiting to see if and how the Fed will re-calibrate their thinking surrounding inflation, because if the now-banking crisis slows loan and credit growth, it will lead to deflationary results.
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only
