CS Stock May Fumble to Changing Fed Rates; New Hints Across the Globe 

• The US central bank will be holding its first meeting to discuss the Fed-rate this year.
• Former Credit Suisse bankers launch legal action over a payback clause. 
• The company recently announced 9,000 layoffs from its global workforce.

Credit Suisse Group (NYSE: CS) recently revealed 9,000 layoffs from its total global workforce of 52,000. The company opted for a job cut-off while its rival, USB group, plans to employ talent from the investment banking sector. Amid these layoffs, several former Credit Suisse bankers in Europe and Asia might take legal action over a payback clause for cash bonuses they received in the previous year. 

The bank was obliged to pay nearly $870 million in cash bonuses, with the condition that the employees would be required to stay with the company for three years, or they would have to pay back a portion of the amount.

The bankers testified that they had little time to agree to the proposed conditions and that a reward for past performance should not be tied to further continuation.

Fed is preparing for another rate hike

Federal Reserve officials are preparing to slow down the interest-rate increases for the meeting scheduled on Jan 31-Feb 1. The officials  are expected to discuss a rate-hike with an aim to strike a balance between inflation and a slowing economy.

Fed officials have hinted toward increasing the rate by a quarter percentage point. Most Fed officials projected in December that the rate may be increased to a range of 5%-5.25%. This would imply two more quarter-point increases. 

The apex bank’s rate increases are aimed at slowing inflation by reducing demand. The rate hikes have dramatically impacted the financial sector as extending loans has become tougher, and investments are yielding fewer returns. Overall, the banking and financial sector has been hit hard by these massive rate hikes.

Nevertheless, the latest Consumer Price Index (CPI) data (inflation stood at 6.5%) suggests the Fed’s diabolical plan to tame inflation might be working.

CS stock price analysis

CS stock price is at its 52-week low range. The current price action hints at a future rally with target range near $4.50. The trading volume shows a mix of both sellers and buyers, being active in the market. The 20-day EMA is claimed by the present price of $3.46 (at press time). 

The MACD recorded a group of buyers dominating the market as the lines undergo a bullish divergence. The RSI reaches the region above the half line to reflect buyer-influence in the market. The present price movement is predicted to face resistance near $4.60, where sellers may turn active to book profits.

Conclusion

The CS stock may wobble due to uncertain market conditions and inflationary pressures. Inflation is hurting all sectors and Credit Suisse is not immune. The holders of CS stock must watch out for the resistance near $4.60.

Technical levels

Support levels: $3.00 and $2.50

Resistance levels: $4.60 and $5.16

Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational purposes only, and they do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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