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Market Review March 20 2023
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STRATxAI

June 2024

Market Review - March 20, 2023

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In this week’s market review, we’ll look at the banking crisis which is currently unfolding in Europe and the USA. We’ll discuss Bitcoin’s outperformance and see how it's performed as a hedge against the bank stocks.

You can catch up on last week's review here.

The Credit Suisse Crumble

The potential for financial contagion remains prevalent. Credit Suisse, a significant international bank, has become the latest institution to face trouble, and was recently acquired by its domestic competitor, UBS Group, on March 20th. If Credit Suisse had collapsed, it could have caused significant strain on the global banking sector. To prevent such an outcome, the Swiss National Bank has agreed to provide $100 billion in liquidity to ensure the bank's survival.

It's important to note that Credit Suisse has been underperforming for a considerable amount of time. Its average quarterly net income over the last five years has been negative $100 million, and the company has incurred losses of nearly $10 billion in just the last two years. The company's stock price has reflected its poor performance and has dropped almost 99% since 2006, the beginning of our dataset. Credit Suisse's all-time high market capitalization was nearly $65 billion, but it was sold to UBS Group for just $3 billion. Furthermore, its assets reached a peak of $1.24 trillion in 2008, but by 2023, they had fallen by over 50% to $575 billion.

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