Credit Suisse Crisis: CS stock plunges 29%, causing widespread equity market worries

• Credit Suisse has sold off by nearly 30% in Wednesday's premarket.
• Chairman of Saudi National Bank said his institution would not bailout Credit Suisse.
• Credit Suisse found issues with several annual financial statements of recent years.
• CS stock dropped below S3 support in premarket.

Credit Suisse (CS) stock has seen its share price dwindle just under 30% on Wednesday morning after the Swiss investment bank's largest shareholder said it was not open to providing further liquidity to the embattled bank. The European banking index fell over 6% on Wednesday due to the news, while US Treasuries and German Bunds saw their yields plummet as investors piled into safe havens. The flight to safety is on this Wednesday, and futures for the top three US stock indices are down between 1.3% and 1.7%.

Credit Suisse stock news: Saudis refuse to save the Suisse

Bloomberg interviewed Saudi National Bank Chairman Ammar Al Khudairy, believing that Credit Suisse's largest investor would move to boost sentiment in the struggling bank. Instead, Al Khudairy said his bank would "absolutely not" provide further funding or equity investment. He said there were a host of reasons for this, although " the simplest reason, which is regulatory and statutory."

This greatly troubled the markets, and NASDAQ futures are currently down 1.4% at the time of writing, while blue chip stocks in the Dow are faring even worse. The cost of insuring Credit Suisse bonds for one year has risen as high as 1,200 basis points, though most credit-default swaps have not reached that level.

The current crisis was made worse after the bank said in its annual report that it found "material weakness" in its fiscal 2021 and fiscal 2022 annual statements. These misstatements had already caused the bank to delay the publishing of its annual report, while it worked with the Securities & Exchange Commission (SEC) to remedy the situation.

"This could result in misstatements of account balances or disclosures that potentially would not be prevented or detected," Credit Suisse said in a statement. The bank added that these weaknesses in its prior reports did not affect the results from 2022 however.

CEO Ulrich Korner has been making the rounds all week presenting the case that Credit Suisse is simply dealing with the difficulties of its corporate transition. Korner was adament that the difficulties faced by Silicon Valley Bank,which collapsed last Friday in the US, were not at all similar to Credit Suisse's current situation.

Credit Suisse stock forecast

Monday had Credit Suisse stock bouncing off the S2 pivot, but now with Wednesday's plummet, CS stock has dropped below the S3 at $1.87. The S4 sits at $1.35, which is the best entry point for knife catchers. More bulls would likely join in if CS shares reversed back above $2.38.

CS daily chart