Germany's Deutsche Bank is thrust into the investor spotlight and slumps 8.5% on Friday, March 24, alongside a sharp jump in the cost of insuring its bonds against the risk of default.
The research firm Autonomous said it was “crystal clear” Deutsche is “NOT the next Credit Suisse,” while JPMorgan analysts wrote “we are not concerned” and that Deutsche’s fundamentals were “solid.”
Paul van der Westhuizen, senior strategist at Rabobank, cited Deutsche’s profitability as the “fundamental difference” between the two European banks, given Credit Suisse did not have a profitable outlook for 2023.Still, shares in Germany’s largest bank have lost a fifth of their value so far this month and the cost of its five-year credit default swaps – a form of insurance for bondholders – jumped to a four-year high on Friday, based on data from S&P Market Intelligence.
Short sellers have made a profit of over $100 million on paper betting against Deutsche Bank stock over the last two weeks, financial data company Ortex said on Friday.Worries in Europe spilled over to the United States before some bank stocks bounced back. JPMorgan Chase & Co. ended down 1.5%, while Bank of America climbed 0.6%.
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