The Cambridge Weekly –12th February 2024

The Cambridge Weekly – 12th February 2024

Are US stocks bubbling up?

Last week the US large-cap equity market shook off the rest of the world and marched to yet another new milestone. The S&P 500 traded above 5,000 for the first time on Thursday night. It also shook off another rebound in bond yields, back to recent highs. China managed to generate a gain just ahead of the Chinese New Year with yet more policy action, while Xi Jinping publicly committed to supporting the Chinese economy. Europe and UK stocks and bonds generally marked time, although there were notable exceptions.

Banks & US commercial real estate

Following the collapse of several regional US banks last year, many investors started to think that after this clear-out, life would get easier for lenders. However, as we noted last week, recent events have delivered a reminder that, for some, trouble still lies ahead. New York Community Bancorp (NYCB) made international headlines after it announced a surprise Q4
2023 loss, cut its dividend and set aside $500 million to cover potential loan losses. Markets sent NYCB shares down 44% in two days and tried to guess who else might be in a similar position.