Anxious traders strategize for Monday’s market turmoil

(Bloomberg) — With the fate of Credit Suisse Group AG finally decided, investors were bracing for another harrowing week of trading.

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With the Asian markets just hours away, fund managers were talking to nervous clients, planning strategies and arranging their next trades. Many turned on their workstations from home, settling in for a long night and planning to be in the office before dawn.

“In the last hour I’ve already had a few calls with fund managers and a big client,” said Alberto Tocchio, fund manager at Kairos Partners in Milan. “From now until late at night, I will be tied to the news trying to figure out what to do early in the morning.”

While the news of the takeover of Credit Suisse by UBS Group AG relieves some traders who feared entering Monday without a deal, there is still a lot of anxiety on Wall Street. The turmoil at Credit Suisse and the collapse of three regional lenders have stoked concerns about the health of the banking sector and revived memories of the 2008 financial crisis.

‘Unknown unknowns’: No weekend for traders as banking troubles linger

Credit Suisse shares have been hit by a spiral of negative news in recent years, with the stock falling 98% from its 2007 peak, a drop of nearly $90 billion in market capitalization during this period. Last week’s fresh sell-off in shares of the Swiss lender – following the collapse of three US regional banks – triggered a 12% plunge in the European banking sector index over the week.

Retail customers and institutions are increasingly concerned about where their money is being held, said Mark Grant, chief global strategist at Colliers Securities. He said he was urging clients to be cautious because of the instability he sees in the financial system that has been created by central banks rapidly raising rates.

“I received a lot of calls this weekend from clients and institutions,” he said. “We’ll see tomorrow morning how things go, but I don’t expect them to be too good.”

Anthony Cohen, senior listed derivatives broker at Market Securities, has received calls from clients wanting to trade when the market opens. “I have never witnessed such volatility on bonds and equities until now,” he said from Dubai. “However, I don’t yet sense the panic in the way customers trade.”

For other traders, turmoil equals opportunity. Andrea Tueni, head of sales trading at Saxo Bank, said he was relishing the chance to start trading on Monday.

“Personally, I think it’s pretty nice when there’s action,” he said. “Of course, no one is happy that it is difficult for some. But the market environment before that was flat with an inflation-recession-central bank combo and it was pretty repetitive.

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