MARKETPSYCH

Schwab Bucks Trend in Latest Bankrun as Non-US Banks Take a Hit

Today's bankrun is targeting large non-US banks: Credit Suisse (a repeat target from back in October 2022) and BNP. Note that Schwab is in the green, probably due to being in the US (Fed backstop) and having a supportive CEO aggressively buying his own shares.

We plotted the overnight bullishness in the media about select major banks, below:

Media Mentions over SVB: Other Regional Banks and Tech Companies Take Center Stage

These are the companies most frequently mentioned in the media along with SVB in the last 5 days. Many are large financial institutions (LFIs, gray bars) that were mentioned due to stock prices falling across the board. However, the main concern surrounding SVB is other regional banks (blue bars), such as First Republic, Signature Bank, and Pac West Bancorp.

Several technology companies have also been frequently mentioned due to their possible exposure to SVB (red bars): Roku, Circle, Roblox, BlockFi, Coinbase, and Etsy

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Sometimes News Sentiment Drives the Market, Sometimes It is Only Reacting

According to a new paper, news sentiment sometimes drives the stock market, and sometimes reacts to it. Specifically, news drives market prices during periods of upheaval (debt crises, Brexit and Covid-19 to name a few). Sentiment reports on market action - after the fact - during less volatile times.

Spillover between investor sentiment and volatility: The role of social media by Ni Yang (Auckland University of Technology), Adrian Fernandez-Perez (Auckland University of Technology) and Ivan Indriawan (University of Adelaide)