Futures for European and U.S. equity futures advanced, Asian stocks pared losses and Treasuries fell Thursday as news that Credit Suisse Group AG would borrow money from Switzerland’s central bank provided a measure of calm for investors.
Contracts for Euro Stoxx 50 climbed more than 2% after Credit Suisse said it would borrow as much as 50 billion francs ($54 billion) from a Swiss National Bank liquidity facility as it seeks to raise debt.
The Swiss franc rose after its sharp selloff Wednesday while Treasury yields nudged higher following steep falls in the previous session.
Asian shares recouped some losses from earlier in the session while a gauge for the region remained down by 1%. Equity benchmarks in Japan, Australia and Kong Kong also fell at least 1%, with financial companies among the hardest hit in the three markets.
Contracts for the S&P 500 rose after the index fell 0.7% Wednesday. Tech stocks offered a bright spot as traders began to forecast interest rates climbing less than previously anticipated. Nasdaq 100 futures advanced Thursday after the benchmark posted its third day of gains on Wednesday as Netflix Inc., Meta Platforms Inc., Microsoft Corp. and Amazon.com Inc. rallied.
Selling in bank stocks dragged the KBW Bank Index, one of the broadest measures of the U.S. banking system, to a 3.6% fall Wednesday. First Republic Bank shares fell more than a fifth after being cut to junk by two credit firms, dragging its decline over the past week to more than 70%.
Australian and New Zealand 10-year yields fell. U.S. Treasury yields rose after sharp declines Wednesday as investors adjusted U.S. interest rates expectations.
Traders were almost evenly split on whether the Federal Reserve will increase interest rates when it meets next week. Market pricing now suggests the Fed will soon pivot and will cut rates by as much as 1% by the end of the year.
“This episode is not the same as 2008. It is not a credit crisis, but an asset crisis,” said Nicholas Ferres, chief investment officer of Vantage Point Asset Management. “The challenge now that has been uncovered is the mark-to-market fantasy of venture capital, private equity and commercial real estate assets.”
The yen inched higher against the greenback while an index of the dollar steadied after a Wednesday rally.
Lisa Shalett, chief investment officer for Morgan Stanley Wealth Management, said the threat to the broader financial industry and economy was largely contained, in contrast to the 2008 financial crisis.
“Remember, in the great financial crisis, there was a lot of this that was about cross-counterparty credit risk,” she told Bloomberg Television. “This is less about immediate contagion.”
