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After the collapse of Silicon Valley Bank, Many bank stocks had a terrible Monday. First Republic Bank, for instance, lost 62% of its value. First Republic is an extreme example, but Charles Schwab, PacWest Bancorp, and Zions Bank Corporation also saw their stock fall Monday. I remember looking at Schwab specifically and thinking that it was crazy how much it fell. In my last post, I mentioned that I thought that bank stocks as a whole would fall short-term after Silicon Valley Bank’s collapse, but I mentioned that long-term I don’t think most of the banks will really be that affected. I simply didn’t see much danger in a bank run happening for most of these banks.
Tuesday, however, bank stocks saw massive recovery. Charles Schwab stock rose by 9%, and PacWest Bancorp, First Republic, and Zions Bank Corporation rose by 34%, 27%, and 4% respectively. Investors seemed to be buying as much of these companies as they possibly could. I admit that while I did think that these stocks were decreasing to an insane extent Monday, I did not think that they would start to recover so soon. I did think that the market was overreacting though. Obviously, Silicon Valley Bank’s collapse is a really big deal, but the fact that it was affecting these other companies to the extent that it did was just crazy. I thought the market would correct its mistake, but I thought it would take longer for that to happen.
It’ll be interesting to see how these stocks perform over the next few days. Many bank stocks are increasing further during after hours trading. First Republic Bank has risen by another 8% since the market closed. Schwab is up another 3%, and Zion is up almost another 4%. I would like to see if these stocks can hold this momentum when the market opens up tomorrow.
The market itself was up as well which is hopefully a good sign that the market is moving past Silicon Valley Bank’s collapse.
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