Reads
- Credit Suisse to Borrow Up to $54 Billion From Central Bank
- Big ECB Hike Called Into Doubt by Credit Suisse
- Bank Fears Go Global, Sending a Shudder Through Markets
- Fears of Financial Meltdown Haunt Governments
- Silicon Valley’s Favorite Bank Was Its Single Point of Failure
- How Goldman’s Plan to Shore Up Silicon Valley Bank Crumbled
- Why Top Washington Officials Chose to Rescue SVB,
- First Republic Bank Is Exploring Options Including a Sale
- Yellen Says U.S. Banking System ‘Remains Sound’
- JPMorgan Joins Those Saying Cash in Bond Gains
- Glencore CEO Rides Coal Windfall on the Way to a Low-Carbon World
- U.S. Threatens Ban if TikTok’s Chinese Owners Don’t Sell Stakes
- How Siri, Alexa and Google Assistant Lost the A.I. Race
- T-Mobile to Buy Low-Cost Carrier Mint Mobile
- China Wine Tariff Pushes Australia’s Grape Growers Into Crisis
- How a Penny-Stock Company Sold the Pentagon on Small Drones for Ukraine
- Diamond Sports Files for Bankruptcy Ahead of Start of MLB Season
- 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
Credit Suisse (CS) will borrow as much as 50 billion francs ($54 billion) from the Swiss National Bank liquidity facility. The troubled Swiss bank also announced public tender offers by Credit Suisse International to repurchase certain OpCo senior debt securities for cash of up to ~3 billion francs. The news sent its Swiss shares over 32% higher today in morning trade, while its U.S.-listed shares gained 9% before the bell.
Backdrop: Credit Suisse shares plunged almost 25% in Switzerland yesterday after the bank's top shareholder - Saudi National Bank Chairman Ammar Al Khudairy - ruled out offering further financial assistance. And on Tuesday, Credit Suisse disclosed a "material weakness" in its reporting procedures and was developing a remediation plan to address the same. However, it said its 2022 results released last month were not impacted by the material weakness.
Market jitters: Yesterday's rout pushed Credit Suisse to request a public show of support from the Swiss National Bank and Swiss regulator FINMA. In an effort to calm markets, the Swiss central bank and FINMA said Credit Suisse meets capital requirements. The authorities also assured investors that problems of certain U.S. banks "do not pose a direct risk of contagion for the Swiss financial markets."
SA commentary: Contributor Dhierin Bechai said the bank is not blowing up, "but it's often not a scandal that directly causes a collapse, it's the reaction from clients and shareholders causing it." The stock may gain a bit in the coming days after the recent selloff, he said. "The reality, however, is that the company has built itself a bad financial reputation." (81 comments)
First Republic Bank (FRC) is evaluating strategic options, including a potential sale, which initially sent its stock 4% higher after the bell yesterday. However, the stock has since erased those gains, and sank more than 23% before the bell today. The bank, whose shares have plunged 80% in the past week in the wake of the failure of Silicon Valley Bank (SIVB), is also weighing options to improve its liquidity. The lender is likely to garner takeover interest from larger rivals. Earlier yesterday, S&P cut First Republic Bank's rating to Junk on high outflow risk. On the other hand, SA contributor The Asian Investor said the bank is well managed and has a significant deposit base. "Investors can earn significant returns here by leaning into the fear and buying the bloodbath." (127 comments)
The FDIC has set tomorrow as the deadline for banks interested in acquiring Silicon Valley Bank (SIVB) or Signature Bank (SBNY) to submit bids. Only bidders that have an existing bank charter will be permitted to take a look at a bank's books before submitting their offer. One condition that has been set is that an acquirer must surrender the bank's cryptocurrency business. Meanwhile, bigger banks appear hesitant to make an offer for SVB. JPMorgan Chase (JPM) and Bank of America (BAC) turned down opportunities to acquire the bank before it was seized last week. SVB is currently conducting a strategic review, and is exploring filing for bankruptcy protection. Take a look at SA contributor BeanKounter Capital's analysis of stocks on their watchlist after SVB's implosion. (10 comments)
Virgin Orbit (VORB) plummeted 40% in premarket trade today as the satellite launch company furloughed almost all of its employees and paused work for a week as it seeks funding to stay afloat. At an all-hands meeting, executives informed employees that they will get an unpaid furlough. The firm will provide “an update on go-forward operations in the coming weeks.” The latest news comes after a Virgin Orbit launch failure in January from the U.K., when a rocket suffered an anomaly that prevented the mission from reaching orbit. SA contributor Dhierin Bechai believes the bigger risk to Virgin Orbit remains its overall launch schedule requirements. (11 comments)
Today's Markets
In Asia, Japan -0.8%. Hong Kong -1.7%. China -1.1%. India +0.1%.
In Europe, at midday, London +1%. Paris +1.2%. Frankfurt +0.8%.
Futures at 6:30, Dow -0.4%. S&P -0.2%. Nasdaq +0.2%. Crude flat at $67.59. Gold flat at $1930.90. Bitcoin +0.9% to $24,869.
Ten-year Treasury Yield -5 bps to 3.45%
Today's Economic Calendar
8:30 Initial Jobless Claims
8:30 Philly Fed Business Outlook
8:30 Housing Starts and Permits
8:30 Import/Export Prices
10:30 EIA Natural Gas Inventory
4:30 PM Fed Balance Sheet
Companies reporting earnings today »
What else is happening...
UBS Wealth executive believes solvency fears on banks are overdone.
Bond market volatility now at 'dangerous' levels, says Societe Generale.
BofA (BAC) gets over $15B in new deposits as trust in small banks weakens.
Federal Reserve to launch its instant digital payment service FedNow in July.
Warren Buffett’s Berkshire Hathaway (BRK.A) boosts Occidental (OXY) stake to 23.1%.
Apple (AAPL) supplier Foxconn (OTCPK:HNHAF) to make AirPods in Indian plant.
Shares of Snap (SNAP) and Meta (META) climb as U.S. threatens TikTok ban.
FTX transferred over $3.2B to key employees, including Sam Bankman-Fried.
Dollar General (DG) posts mixed Q4 earnings report, reaffirms 2023 guidance.
Biogen (BIIB) gets EU court ruling in favor of blocking Tecfidera generic entry.