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- In Africa, Kamala Harris Looks to Deepen Relations
- As Banking Worries Swir
- Saudi National Bank Chair Resigns After Credit Suisse Remark
- First Citizens Buys Silicon Valley Bank After Run on Lender
- Banking Crisis Raises Concerns About Hidden Leverage in the System
- Morgan Stanley Strategist Says Earnings Are Next Risk to Equities
- Dear Volcker Happy Talkers, How’s the ‘Inflation’ Fight Going?
- Volkswagen Says EU Accord on E-Fuels a Boon for Porsche’s 911
- The Paper-Thin Steel Needed to Power Electric Cars Is in Short Supply
- Pentagon Woos Silicon Valley to Join Ranks of Arms Makers
- U.S. ‘Industrial Policy’ Returns
- The Lure of the ‘Made in America’ Sales Pitch
- Why Chinese Apps Are the Favorites of Young Americans
- Tech’s AI Armies Are Huge, Yet Struggling to Innovate
- Uber Eats to Take Down Thousands of Virtual Brands
- People Bought Crocs During the Pandemic. They Haven’t Stopped
Todays Open Interest Change
PREMIUM
Prepper
First Citizens Bank (NASDAQ:FCNCA) has agreed to buy Silicon Valley Bank's (NASDAQ:SIVB) deposits and loans, confirming an earlier report that surfaced on Sunday night. The purchase of $72B in assets will come with a 23% discount of $16.5B, while approximately $90B in securities and other assets will remain in receivership for disposition by the FDIC. Equity appreciation rights in First Citizens BancShares common stock - with a potential value of up to $500M - will also be received by the FDIC, which entered into a "loss-share transaction" with the lender to absorb commercial loan losses and minimize disruptions to the sector. In premarket trade, FCNCA is up 22% to $714/share.
Press release: "The 17 former branches of Silicon Valley Bridge Bank, National Association, will open as First–Citizens Bank & Trust Company on Monday, March 27, 2023. Customers of Silicon Valley Bridge Bank, National Association, should continue to use their current branch until they receive notice from First–Citizens Bank & Trust Company that systems conversions have been completed to allow full-service banking at all of its other branch locations. The FDIC estimates the cost of the failure of Silicon Valley Bank to its Deposit Insurance Fund to be approximately $20B... The exact cost will be determined when the FDIC terminates the receivership."
The deal marks the latest chapter of the current global banking crisis, which began on March 10, when SVB became the biggest U.S. bank failure since the collapse of Lehman Brothers in 2008. Shortly thereafter, Signature Bank (SBNY) failed, Credit Suisse (CS) was rescued by UBS (UBS), and things are looking rocky for First Republic (FRC) and possibly Deutsche Bank (DB), as investors and analysts alike assess if something deeper is brewing. Bond traders have radically shifted expectations for monetary policy, deposits have been drained from smaller banks and transferred to big institutions, while policymakers from Treasury Secretary Janet Yellen to Fed Chair Jerome Powell have sought to assure the public about the resilience of the U.S. financial system.
SA commentary: "The actual market and/or counterparty risks are very limited and strictly managed... however, loss of confidence may trigger a self-fulfilling prophecy," wrote IP Banking Research with regards to Deutsche Bank, though the sentiment could apply to large swathes of the banking system. CashFlow Hunter is also back with his latest picks on where to pick up value amid the global banking crisis. The Seeking Alpha contributor correctly predicted big problems for Silicon Valley Bank parent SVB Financial Group (SIVB) three months before the firm collapsed in an article that stunned the financial world. (21 comments)
Will the recent spate of bank failures spiral into a financial crisis?
· Yes (just the tip of the iceberg)
· No (things are now under control)
Take the survey and see the results here
A weekend visit to China by Apple (NASDAQ:AAPL) CEO Tim Cook is sparking some investor discussion, especially following his comments at the high-profile China Development Forum. "Apple and China... grew together and so this has been a symbiotic kind of relationship that we have both enjoyed. I am thrilled to be back in China. It means the world to me and I feel really privileged to be here." Only several days ago, TikTok was grilled over its relationship with China, while Apple has been reportedly looking to diversify its assembly operations, with an estimated 95% of total iPhone supply still coming from the country. Hardware tech may also be a reason for Warren Buffett to love Apple, but one analyst dives deeper into another answer to why AAPL is Berkshire Hathaway's (BRK.B) largest position by far despite historically eschewing technology stocks. (10 comments)
Russian President Vladimir Putin has announced his intention to station tactical nuclear weapons in Belarus, comparing the plans to the storage of U.S. warheads in bases across Europe. Construction of a storage facility in Belarus will be completed by July, expanding Russia's strike ability along NATO's eastern border that includes Latvia, Lithuania and Poland. "U.S. officials are aware of the reported Russian announcement and will monitor the implications," said Adrienne Watson, spokesperson for the National Security Council. "We remain committed to the collective defense of the NATO alliance." On Friday, Chicago wheat futures surged on short covering as well as market talk that Russia could halt exports following a sharp drop in global prices in recent weeks.
How will advanced chatbots impact the U.S. workforce? Pretty significantly, according to researchers from the University of Pennsylvania and OpenAI, the group behind the creation of ChatGPT. "Our findings reveal that around 80% of the U.S. workforce could have at least 10% of their work tasks affected by the introduction of LLMs (large language models), while approximately 19% of workers may see at least 50% of their tasks impacted." The projections span all wage levels, with higher-income jobs potentially facing greater exposure to LLM capabilities and LLM-powered software (check out some of the most exposed professions here). Microsoft-backed (MSFT) OpenAI recently added support for ChatGPT plugins, including ones for Expedia (EXPE), Kayak.com (BKNG), Slack (CRM) and Shopify (SHOP).
Today's Markets
In Asia, Japan +0.3%. Hong Kong -1.8%. China -0.4%. India +0.2%.
In Europe, at midday, London +1%. Paris +1.2%. Frankfurt +1.5%.
Futures at 6:30, Dow +0.6%. S&P +0.6%. Nasdaq +0.3%. Crude +1.1% to $69.99. Gold -1.6% to $1951.20. Bitcoin +0.8% to $27,932.
Ten-year Treasury Yield +9 bps to 3.47%
Today's Economic Calendar
10:30 Dallas Fed Manufacturing Survey
1:00 PM Results of $42B, 2-Year Note Auction
5:00 PM Fed's Jefferson Speech
Companies reporting earnings today »
What else is happening...
Bank stresses bring economy closer to recession - Fed's Kashkari.
Aurora Cannabis (ACB) receives non-compliance notice from Nasdaq.
Twitter's valuation down to $20B, while source code is leaked online.
Do gasoline stock lows signal a return to high U.S. pump prices?
WWE (WWE) receives millions from McMahon for investigation costs.
Outer Banks, Murdaugh Murders lead Netflix (NFLX) to top streaming ratings.
Ethereum (ETH-USD) is at risk of losing its dominant status in DeFi.
Microsoft's (MSFT) chances of closing Activision (ATVI) deal raised at Citi.
EV buyers may be pulling back, but Tesla (TSLA) is still running hot.
Rocket Lab (RKLB) takes aim at SpaceX with Neutron launch plans.