{"id":2464339,"date":"2023-05-05T17:29:19","date_gmt":"2023-05-05T21:29:19","guid":{"rendered":"https:\/\/www.valuewalk.com\/?p=2464339"},"modified":"2023-05-05T17:29:21","modified_gmt":"2023-05-05T21:29:21","slug":"fear-is-in-the-air-again-get-ready-with-your-defensive-manoeuvres","status":"publish","type":"post","link":"https:\/\/www.valuewalk.com\/fear-is-in-the-air-again-get-ready-with-your-defensive-manoeuvres\/","title":{"rendered":"Fear Is in the Air Again – Get Ready With Your Defensive Manoeuvres!"},"content":{"rendered":"\n

It seems that we are not out of the woods just yet. With the Fed raising interest rates<\/a> by 25 basis points and a hint of a pause, it seemed that investors could rest easy for a bit. Still, fear is suddenly back in the air as investors are reminded of the impact of high-interest rates in our current environment.<\/p>\n\n\n\n

Yesterday banking shares were sold off again<\/a> just following the seizure and sale of First Republic Bank to JP Morgan. Shares of the smaller regional lender PacWest Bankcorp<\/a> just plunged 50.62% yesterday as PacWest Bank confirmed reports about considering “strategic options, ” including the company’s possible sale.<\/p>\n\n\n\n

Are We Going To Expect Another Bank Collapse?<\/h2>\n\n\n\n

According to Pacwest’s statement, it planned to sell some assets to free up cash on its balance sheet. Still, investors fear PacWest’s fate could be another victim of the market’s ongoing state: high-interest rates, slow growth, and high inflation.<\/p>\n\n\n\n

This may be due to regional banks<\/a> that have run into trouble, seen heavy outflows of deposits, and need to raise capital. Many have large amounts of low-interest bonds and commercial real estate assets on their books and would record losses if they sold them on the open market, affecting the confidence in the banking industry.<\/p>\n\n\n\n

<\/div>