Reads
- Web of Secret Chip Deals Allegedly Help US Tech Flow to Russia
- China’s Economy Rebounds, Spurred by Consumption
- China Will Reduce Number of High-Risk Institutions, Defuse ‘Bombs’ – Central Bank
- The British Government Is Issuing a Call to Work
- U.S. Inflation Cooled in February as Fed Confronts Bank Failures
- Bank Runs, Crypto Concerns and Takeovers: A Timeline of the Panic
- BlackRock’s Fink Says SVB Failure Shows Cracks in Finance System
- Short Sellers Scored $2 Billion Profit as Regional Banks Plunged
- Soaring Bond-Market Volatility After SVB Collapse Is Making It Impossible to Say What Stocks Are Really Worth
- Powell’s Legacy Risks Being Tarnished Further by SVB Collapse
- Meet the Man in Charge of What Remains of Silicon Valley Bank
- SVB Is a ‘Nail in the Coffin’ for Bay Area Housing Market’s Gold Rush
- US 30-Year Mortgage Rates Retreat for First Time in Five Weeks
- Credit Suisse Top Holder Rules Out Investing More After Drop
- European Banks Battered as Credit Suisse Drops Over 20%
- 10 Ways GPT-4 Is Impressive but Still Flawed
- Facebook Parent Meta Plans 10,000 Job Cuts in New Round of Layoffs
- Novo Nordisk to Slash Insulin Prices by Up to 75%
Todays Open Interest Change
PREMIUM
PREPPER
A group of Democrats led by Sen. Elizabeth Warren (D-MA) and Rep. Katie Porter (D-CA) proposed a bill to restore bank regulations that were undone by former President Donald Trump. The proposed bill seeks to repeal a law passed on a bipartisan basis in 2018 that eased Dodd-Frank regulations on midsized banks by increasing the "too big to fail" threshold to $250B in assets from $50B. The Warren-Porter bill would roll back the threshold pertaining to enhanced capital requirements.
Scrutiny heats up: The Federal Reserve is evaluating tougher rules for midsized banks after the failures of Silicon Valley Bank (SIVB) and Signature Bank (SBNY). It is looking at tougher capital and liquidity requirements, and could beef up annual "stress tests" that assess banks' ability to weather a potential recession. Meanwhile, U.S. regulators are investigating the failure of SVB, including potential misconduct by officers over insider stock sales. No one at the bank has been accused of wrongdoing and it's possible that no one will be charged. In addition, DOJ investigators had been investigating Signature Bank's work with cryptocurrency-related clients before the bank was shuttered.
SA commentary: Courage & Conviction Investing said the SVB blow-up is a good prompt for retirees, who are invested in high dividend-yielding stocks, to re-examine the amount of risk they are taking. Contributor Ian Bezek said the collapse shows the issue of putting too many eggs in one basket, with respect to fixed income securities. Read his advice on what depositors can do to safeguard funds and potentially earn more interest. (104 comments)
SVB Financial (SIVB) confirmed that Silicon Valley Bank sold a portfolio of securities with a book value of $23.97B to Goldman Sachs (GS) last week before the bank was shut down by the FDIC. The sale of the portfolio resulted in a net loss for Silicon Valley Bank of about $1.8B. The portfolio was sold to Goldman at a negotiated price. Meanwhile, Apollo Global (APO), Blackstone (BX) and KKR (KKR) are looking at purchasing loans held by Silicon Valley Bank. The defunct bank had $73.6B of loans as of the end of last year. In other news, KPMG is standing by its audits of SVB and Signature, even as questions are being raised on why the auditor missed signs of impending financial issues. SA contributor believes most big banks aren’t at risk of contagion. (19 comments)
Credit Suisse (CS) shares plunged 18% premarket to a record low today after the bank's top shareholder ruled out offering further financial assistance to the lender. Saudi National Bank Chairman Ammar Al Khudairy cited regulatory concerns as the reason behind not being open to injecting more capital into the bank. Credit Suisse disclosed a material weakness in its reporting procedures yesterday, which led to concerns over the bank's internal controls. Read why SA Quant believes Credit Suisse is at high risk of cutting its dividend. (4 comments)
TikTok management is considering splitting itself from parent company ByteDance (BDNCE) if it can't reach an agreement with the U.S. to address national security concerns. A TikTok divestiture may include a sale or an initial public offer, but these options would be the last resort if national security fears aren't allayed. The Chinese government would still need to bless such a plan. Last week, Senate Intelligence Committee Chairman Mark Warner introduced bipartisan legislation aimed at policing the threat of technology from "adversarial" nations, a move lately pointed at a potential ban of TikTok. (9 comments)
Today's Markets
In Asia, Japan flat. Hong Kong +1.5%. China +0.6%. India -0.6%.
In Europe, at midday, London -2.3%. Paris -3.1%. Frankfurt -2.7%.
Futures at 6:30, Dow -1.7%. S&P -1.7%. Nasdaq -1.5%. Crude -1.6% to $70.20. Gold flat at $1911.40. Bitcoin -1.3% to $24,557.
Ten-year Treasury Yield -9 bps to 3.55%
Today's Economic Calendar
7:00 MBA Mortgage Applications
8:30 Producer Price Index
8:30 Retail Sales
8:30 Empire State Mfg Survey
10:00 Business Inventories
10:00 NAHB Housing Market Index
10:00 Atlanta Fed's Business Inflation Expectations
10:30 EIA Petroleum Inventories
4:00 PM Treasury International Capital
Companies reporting earnings today »
What else is happening...
Wells Fargo (WFC) filed for a $9.5B mixed shelf offering.
Moody’s revised U.S. banking sector outlook to negative on SVB fallout.
Apple (AAPL) is delaying some bonuses and may freeze hiring to streamline costs.
Samsung (OTCPK:SSNLF) to invest $230B to build five chip plants in South Korea.
OpenAI said new GPT-4 AI language model can beat most people's SAT scores.
Rite Aid's (RAD) debt burden could hinder its ability to settle a DOJ opioid lawsuit.
Senators urge pharmacy chains to ensure access to abortion pill amid legal threats.
Boxed (BOXD) is evaluating a potential bankruptcy filing, among other options.
Morgan Stanley highlights margin concerns for Rivian (RIVN) owing to inefficiencies.
AMC (AMC) investors approved 1