With all eyes on the banking sector, Jim Cramer on Wednesday said the Federal Reserve may need to take "more drastic measures" at its meeting next week - which could is “great” for your portfolio.
"This will be the most important Fed meeting in recent times because the next move is very important and we don't know how it will play out," he said.
However, it is too early to say whether the Fed's moves will offset the negative effects of the growing banking crisis.
"We're getting close to the point where the Fed may feel the need to take drastic measures that can deliver great benefits to the stocks in your portfolio," Cramer said. We just don't know if it's going to be enough to get through the bad stuff from the banking crisis like a snowball."
Over the past few days, a financial sector crisis has erupted following the collapse of Silicon Valley Bank (SVB) and Signature Bank in New York, both unable to cope with a series of rate hikes. from the Federal Reserve in the past year.
Stock markets fell on Wednesday on fears of a banking crisis spreading to Europe, with investors weighing in on the future of global bank Credit Suisse.
The major averages recovered somewhat in the afternoon after a Swiss regulator announced that the country's central bank would provide liquidity to Credit Suisse if needed.
US stocks fell as Credit Suisse raised new concerns about the banking system.
At 9:48 ET (13:48 GMT), the Dow Jones Industrial Average was down 428 points, or 1.3%, while the S&P 500 was down 1.3% and the NASDAQ Composite was down 0.9%.
Shares of Credit Suisse Group (NYSE:CS) fell 23% after the National Bank of Saudi Arabia, a top investor, said regulations prevented it from providing any further support. financial services to a Swiss financial company.
At the same time, new economic data is raising hopes of a less aggressive Federal Reserve. Retail sales fell 0.4% in February, a larger-than-expected decline after rising 3.2% in January.
Producer prices rose 4.6% in the year to February, compared with expectations for a 5.4% increase.
Bank stocks recovered somewhat on Tuesday after falling sharply on Monday due to the sudden collapse of SVB Financial and Signature Bank (NASDAQ:SBNY) over the weekend. Regional banks came under pressure again on Wednesday.
Shares of First Republic Bank (NYSE:FRC) fell 7.4%, while shares of Western Alliance Bancorporation (NYSE:WAL) fell 6.3% and PacWest Bancorp (NASDAQ:PACW) fell 17.8%.
Big banks also fell, such as JPMorgan Chase & Co (NYSE:JPM), down 3.8% and Bank of America Corp (NYSE:BAC) down 3.4%.
Oil fell. WTI crude oil futures fell 3.6% to $68.77 a barrel, while Brent crude fell 3.4% to $74.80 a barrel. Gold futures rose 0.8% to $1927.