Shares of banks and other financial institutions rose as traders rotated into the sector in light of newfound stability in global markets.
“It looks as if the components that pushed us into a correction have dissipated,” said Quincy Krosby, chief global strategist at brokerage LPL Financial. A major impetus for global volatility was the unwinding of the yen carry trade, as hedge funds rushed to get out of bets on the yen’s movement against the dollar, said Krosby.
The Bank of Japan’s decision to raise rates and its vow to hike rates further on the same week that the Federal Reserve was talking about cutting rates “levitated” the yen, and sparked a desperate rush to back out of bets, said Krosby. Since then, Japanese central-bank officials have indicated they will not raise rates while market volatility persists.
H&R Block stock jumped after the tax-prep company reported strong financial results, increased its dividend, and provided an outlook that exceeded analyst expectations.
B. Riley Financial shares surged after Bryant R. Riley, the founder, chairman, co-chief executive and largest shareholder of the troubled investment bank, made an offer to buy the stock he doesn’t already own for $7 a share.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
08-16-24 1744ET
