First off, banking fears are definitely subsiding. How long this holds or whether this is justified is almost beside the point – after a few weeks of intense volatility and significant losses, financials have stopped bleeding.
The MSCI World financials index is now up three days in a row and the U.S. regional banking index has risen for four straight days, neither of which have been recorded since January.
Investors welcomed Fed Vice Chair for Supervision Michael Barr’s plain-speaking Congressional testimony which concluded on Wednesday. Barr admitted to lawmakers that officials and regulators had been caught off guard by the banking crisis and said no stone would be unturned for learning the lessons.
Meanwhile, tech is on a tear, partly thanks to Alibaba. The Chinese conglomerate’s restructuring plans announced this week have been taken as a signal that Beijing’s regulatory crackdown on corporate is ending, propelling its shares higher and boosting investor confidence in prospects for Chinese tech firms.
Alibaba’s U.S.-listed shares followed Tuesday’s 14% rally with a 2% rise on Wednesday, and the Hong Kong-listed shares jumped 12% on Wednesday, leading the Hang Seng Index and other markets in the region higher.
