Morning Reads


Todays Open Interest Change




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)

Strategic review

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)

New deadline

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)

Sinking ship?

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 (OXYstake 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.

Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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