Comparisons to the 2008 banking crisis have become a little harder to ignore in recent days. Steve Chiavarone doesn’t want to scare anyone, but what he remembers most from the last banking crisis was how sure most people were that it wouldn’t happen. At his New York office in early 2008, Wall Street’s best and brightest — “strategist after strategist after strategist after strategist,” recalls Chiavarone, now senior portfolio manager at Federated Hermes — paraded through to say that even if a recession hit, it’d be shallow and short. That’s not, of course, how things played out. A few months later, “you’d go to your office every day and something that you never thought would happen would happen,” he said. [time-brightcove not-tgx=”true”] All sorts of crises have been predicted by financial Cassandras in the aftermath of 2008. In reality, they’re exceedingly rare in markets. And yet, with three US banks down, a fourth teetering and the government-brokered acquisition of a fifth — and much larger — institution in Europe, the comparisons to that episode have become a little harder to ignore. Not that this episode will match the magnitude of that one. While odds of a recession are way up, authorities are better equipped today to deal with stress in the financial system, and the largest banks are stronger than they were then. Reasons for Wariness But for the current class of investing professionals who seem largely unperturbed by recent events — desensitized perhaps by the years of false warnings — there are important messages to be gleaned from the first-hand accounts of veterans, like Chiavarone, of that crisis. His biggest: Things can unfold in ways that seemed inconceivable just weeks earlier. “It’s one of the reasons I’ve been as cautious as I have,” he said. And given the pace at which events are unfolding, and how there are new potential problem areas that didn’t exist back then — high inflation, for instance, and the boom in the opaque world of private credit — telling the difference between investor courage and complacency has become a more urgent matter. “The equity market has largely treated the recent events as a surgical strike on a specific cohort of stocks,” Goldman Sachs Group Inc.’s head of hedge fund coverage Tony Pasquariello wrote in a trading note Thursday. “I find that a bit remarkable.” On Sunday, UBS Group AG agreed to buy Credit Suisse Group AG for $3.2 billion in a government-brokered deal aimed at containing a crisis of confidence. The Swiss National Bank has agreed to offer a liquidity line of 100 billion francs ($108 billion) to UBS as part of the deal, while the government is granting a 9 billion-franc guarantee for potential losses from assets UBS is taking over. In markets, bets on crisis that have been busting bears for years are in scant evidence today. The Nasdaq 100 just had its best week since November, credit spreads are about a third of their level in 2008 and the dollar is falling. And while Treasury volatility is the highest since 2008, crushing quants and other big managers, it wasn’t enough to keep hedge funds from snapping up single stocks last week at the fastest pace since January 2021, according to a trading note from Morgan Stanley. That’s all consistent with a belief stress in finance will be contained. Unnervingly, it’s not totally inconsistent with the outlook that prevailed before 2008’s storm, which ended up knocking American stocks down by more than half. One of the signature properties of bank stress is the speed with which dominoes fall when faith breaks, said Adam Crisafulli, the founder of Vital Knowledge in New York. Built on Confidence “You want banks to be as boring, as stodgy as possible,” said Crisafulli, who was working at Bear Stearns when it had to be bailed out by JPMorgan Chase & Co. in 2008. “The entire business model is predicated on confidence. So even if you are very, very comfortable with the financials, if the market has lost confidence in a financial institution, it’s very difficult for a financial institution to rebut or refute that loss of confidence.” Francesco Filia, chief investment officer at Fasanara Capital in London, was working in cross-asset derivatives at Merrill Lynch when it was sold in a bailout months after the Bear Stearns collapse. When the 2008 catastrophe broke out, he says, its full dimension was hard to see. “From the inside, you don’t capture the full scale of the crisis,” Filia said. “You’re always too far from the decision power. We were looking at our own CDS widening and wondering what might have happened, but not knowing what was being discussed in terms of rescue packages.” A difference between 2008 and now is inflation, which threatens to complicate the Federal Reserve’s response should things mushroom. While bond traders wasted little time pricing out future interest rate hikes in the aftermath of Silicon Valley Bank’s collapse, consumer costs continue to rise at more than twice the pace central banks have targeted. For investors, there’s a no-win aspect to it all — either inflation remains high or is finally arrested by a recession spurred by stressed-out banks reining in credit. “There’s never just one issue,” said Steve Sosnick, chief strategist at Interactive Brokers, who was helping co-manage Timber Hill’s $3 billion to $4 billion market-making book in 2008. Back then, “every time you thought it was going to get better, it didn’t. Every time you think it’s all done, something else is hiding out. It was inevitable that hiking rates now would break something, just as it was inevitable then that hiking rates and cracking down on crappy mortgages would break something.” Kris Sidial is a professional short, running tail-risk strategies for hedge fund Ambrus Group, so it’s no surprise he’s pessimistic. He plans to hold on to bearish bank options that he has already ridden to a 40-fold profit over the last month. “When the Credit Suisse thing popped up, it was a sign that there’s another body,” he said in a telephone interview Saturday. “It’s very binary. There’s really no in-between situation here where this drags out,” he said. “This is either going to get fixed — there’s going to be government intervention and this gets fixed — or it’s going to be a nightmare.” Sidial said he’s already worrying about finding prime brokers who won’t collapse in unison should contagion spread. “Forget US equity markets, the whole world is connected to the banking system. If that hits, everything’s going with it. You can destroy tech, you can destroy everything else, but banking is the one thing where if that goes down, there’s massive repercussions.” At the same time, upheaval often leads to opportunity in the market, says Paul Nolte, a senior wealth manager at Murphy & Sylvest Wealth Management, who was an adviser at a boutique investment firm in 2008. “We’ve seen this play out more than a few times. When the Fed panics, that’s usually a pretty good time for investors to start nibbling in the financial markets. This past week was a perfect example,” he said. His firm has been adding to its position in Comerica Inc., a regional bank, and adding exposure to broad benchmarks like the S&P 500 and Nasdaq Composite. Rich Steinberg, chief market strategist at Colony Group, survived 2008 even after Lehman Brothers went bankrupt on his birthday, which left him “under my desk sucking my thumb.” His wife walked in with a job application for a bakery noting: “You’re up early, you could always go and like make bread before you come into the office.” The application is still on his desk. There’s a lesson in his survival. “Don’t confuse a great brand with not having risk. The second thing is don’t panic in great franchises.” Also: “Try not to outsmart the market when you really see names under a lot of pricing pressure. The psychodynamics in these really turbulent times can really bring valuations and or pricing swings way greater than you think.” These days, “I walk down the hall to the other portfolio managers and I’m just looking for validation,” Steinberg said. “I’m pretty panicked about having even a 5% exposure to the financials. What do you think? And everybody collectively said just hold tight. Like, don’t make the mistake of blowing out.” In 2008, banks were more leveraged while regulators had much less experience dealing with systemic stress, said Arthur Tetyevsky, a financials strategist at Seaport Global Holdings who worked in a similar role but at HSBC Holdings Plc during the financial crisis. At the same time, because the market is now dominated by passive funds, it’s not as easy to get out of big positions. “The most important lesson that was learned back then is that a problem requires a quick response. You know, backing of the regulators, backing up of supervisors,” he said. “I’m seeing a response rate that’s much, much quicker today compared to 2008.” How inflation affects that response remains a wild card. “You had a very benign inflationary environment back in 2008,” said Crisafulli of Vital Knowledge. “And that essentially meant that central banks were only limited by their imagination. That’s now obviously not the case.” — With assistance from Emily Graffeo, Lu Wang and Denitsa Tsekova......»»

Central banks, regulators and governments are rushing to save banks from collapsing. But the uncertainty is far from over. People walk by the New York headquarters of Credit Suisse on March 15, 2023 in New York City.Spencer Platt/Getty Images On Sunday, UBS acquired the embattled Credit Suisse for $3.25 billion. The Fed along with five other central banks announced coordinated action to reassure global banks. While immediate contagion risks seem to have been contained, concerns still linger over what the next blind spots are. You know something is wrong when six big central banks from around the world decide to join hands in order to reassure financial markets. That too on a Sunday night.Hours after UBS announced it will acquire Credit Suisse for $3.25 billion, the Federal Reserve, along with the European Central Bank, the Bank of England, the Swiss National Bank, the Bank of Canada and the Bank of Japan announced fresh measures to ensure there is enough funding for global financial institutions amid the current stressed market conditions.American economist Nouriel Roubini, or "Dr Doom" as he is often referred to, broke down this measure in a tweet."Use of Fed international swap lines spikes during severe risk off episodes when there is shortage of global dollar liquidity: GFC, EZ crisis, temper tantrum, Covid 3/20 shock. Expect another likely spike now. That is why the CBs coordinated action today," Roubini tweeted Sunday night.To make sense of those acronyms, GFC refers to the global financial crisis of 2007 to 2009, EZ crisis is the Eurozone crisis of 2009 onwards, temper tantrum likely refers to the taper tantrum of 2013, and the Covid 3/20 shock is when global markets went haywire in the early stages of the pandemic. It's wild to think that the current market situation is similar to the ones mentioned on Roubini's list. But the events of the past two weeks have investors - both institutional and retail - worried over financial stability and the fate of the economy.So, you might be wondering: Just how bad is the banking crisis?In less than two weeks, three US banks, Silvergate, SVB, and Signature Bank, and a big global lender like Credit Suisse have collapsed, bringing back fears of a full-blown financial crisis.So how big is this crisis then?"Despite the shockwaves, we expect that the banking crisis could ultimately prove to be beneficial for global markets for several reasons," deVere Group's Nigel Green said in a note on Monday morning.Green adds that the "emergency lifelines" that the regulators and governments have provided to the banks have curbed any risk of contagion within the sector and the chances of turmoil spreading across other firms and sectors has been contained.It all started with the collapse of Silvergate, SVB ,and Signature Bank in the US. Crypto-friendly bank Silvergate announced it would liquidate, before SVB was shut by the regulators on March 10 and put under the control of the Federal Deposit Insurance Corp (FDIC). The FDIC later seized Signature Bank.Things moved very quickly in the case of SVB - the country's 16th largest bank. As soon as SVB announced it needed to raise capital, customers panicked and rushed to withdraw their money. The speed at which clients withdrew their funds from SVB shows how quickly a bank run can take place in the digital age.The Treasury, the Fed and the U.S. President himself rushed to reassure the depositors that their money was safe. However, another crisis was brewing in Europe.Investors had been watching the slow decline of Credit Suisse over the years, mainly attributed to its accounting errors, its involvement in multiple scandals, billions in losses, several turnaround plans and more. But the SVB collapse exacerbated those concerns as investors started looking around at other banks that could be in a similar position."A harsh spotlight has been focused on banks in the last week and while it has been for many of the wrong reasons, it has also served to highlight to investors that the rules imposed in the wake of the 2008 financial crisis mean that most banks are in a strong position to withstand shocks," deVere's Green said.That said, banks across the world are still adjusting to the steep surge in interest rates. Lenders had gotten used to years of low-cost borrowing due to a regime of ultra-low interest rates maintained by central banks around the world. But the sudden increase in rates over the past year has borrowers struggling to manage their portfolios."The week ahead looks like a movable feast already, but it seems a safe bet that further central bank intervention is on the cards: and further changes in the global financial architecture, with a larger role for government/regulators," Rabobank said in a research note on Monday.What's next?Investors will be watching two big themes in the market over the next few days to understand how the banking crisis is going to play out.On Sunday, Credit Suisse said that as part of the rescue deal, the Swiss regulator requires almost $17 billion of the lender's so-called Additional Tier 1 (AT1) debt to be written down to zero."That appears to have spooked investors and has led to a sell-off in other bank debt and that's weighed on share prices," Russ Mould, Investment Director at AJ Mould said in a research note on Monday morning."It means the banking crisis we've seen over the past few weeks has started a new chapter rather than reaching its ending."AT1 or Contingent Convertible (CoCo) bonds are basically debt securities that convert into equity when the capital buffers of a bank fall below a certain level. After the 2008 financial crisis, the Bank of International Settlements (BIS) made it necessary for all European banks to issue CoCo bonds.The second big event this week is the Federal Reserve's interest-rate decision on Wednesday. Most economists and market watchers had been predicting a 25 basis point rate hike from the Fed, taking the US central bank's benchmark rate to 5%.However, the coordinated action from the Fed and five other central banks on Sunday night is seen by many as a step toward pausing rate hikes. The market has been choppy over the past few weeks and while the central banks, the regulators and governments have stepped in to contain contagion, there is still a lot of uncertainty over how the high inflation, high interest-rate environment will impact the global economy."Central banks know that besides having to try and tame stubbornly high inflation, they also need to ensure financial stability. The events of the last week which rocked confidence will certainly give them cause for pause," deVere's Green said."The growing case for interest-rate hikes to be paused will be cheered by global markets."Read the original article on Business Insider.....»»

From UBS itself to Credit Suisse's AT1 bondholders, here are the main winners and losers from the biggest story in markets right now. UBS agreed to buy its biggest rival Credit Suisse for just over $3 billion Sunday.NurPhoto/Getty Images UBS agreed to take over rival bank Credit Suisse for just over $3 billion Sunday. The Swiss government forced through the deal in a bid to quell fears of a global banking crisis. From UBS itself to Credit Suisse's AT1 bondholders, here are the main winners and losers from the biggest story in markets right now. UBS agreed to buy longtime rival Credit Suisse on Sunday in a historic deal that'll merge two of Europe's biggest banks.The Swiss government forced through the 3 billion franc ($3.25 billion) deal, which came after Credit Suisse's Zurich-listed shares plunged 70% in a single week as the collapse of SVB Financial sparked fears of a global banking crisis.Here are the main winners and losers from the biggest story in markets right now:Losers: Credit SuisseThe 167-year-old Swiss bank stands out as the biggest loser from Sunday's rescue deal.The global banking crisis that erupted last week weighed on Credit Suisse's already battered stock, which plunged 70% in the space of five days.Now, the onetime banking titan has been forced by its own government to accept a takeover bid from its biggest rival, which values it at less than half its market capitalization as of Friday's closing bell.It's hard to think of a more humiliating fall from grace since the 2008 financial crisis.Winners: UBSThe Zurich-based bank has snapped up its longtime rival at a fraction of its market value – and can draw on support from its government and the Swiss National Bank to absorb some of its losses from the takeover.UBS will see its assets under management swell to just under $2 trillion if it can complete the deal, according to data from S&P Global – which is more than the amounts managed by blue-chip US rivals like Goldman Sachs and Morgan Stanley.But these are still uncertain times for European bank stocks – and that could take some of the shine off any potential deal, according to one analyst."Under normal circumstances, I would say it is an absolutely fantastic deal for UBS," Morningstar equity analyst Johann Scholtz said, per Reuters. "In the current environment, it is a bit more complicated as there is a lot of uncertainty generally in the markets."Losers: Saudi Arabia, Qatar, and NorwaySome of the world's biggest investors are suffering this morning due to their exposure to Credit Suisse.Top shareholder the Saudi National Bank – whose chairman helped to crater the Swiss bank's stock price by ruling out upping his stake on Wednesday – has lost 1.1 billion francs in just 15 weeks, according to data from Bloomberg.The Riyadh-based bank loaded up on Credit Suisse shares for 3.82 francs ($4.12) apiece in November – way clear of the 0.76 francs that UBS will pay the Swiss lender's shareholders as part of its takeover deal.Qatari and Norwegian sovereign wealth funds were other big investors in Credit Suisse, although Norway's Norges Bank Investment Management said Monday that it had trimmed its stake earlier this year. Winners: Wall Street (for now)JPMorgan, Bank of America, and the rest of Wall Street now have one less rival, with UBS chairman Colm Kelleher indicating on Sunday that there'll be cutbacks at Credit Suisse's investment bank.The rescue deal could also help to contain some of the turmoil caused by the ongoing global banking crisis – although US investors are still fretting about regional bank First Republic, which saw its share price plunge 20% in Monday's premarket.Credit Suisse's key role in the global financial system also meant that many had deemed it "too big to fail" and so Wall Street's largest banks could feel the aftereffects of Sunday's takeover."It's a bigger deal than the collapse of SVB because Credit Suisse has an investment bank," Morningstar Investment Management's CIO Dan Kemp told Insider last week. "It's more part of the banking plumbing – and so worries about its health have always been more of a concern."Losers: AT1 bondholdersThe Swiss regulator said Sunday that it would write down the value of Credit Suisse's 16 billion franc Additional Tier 1 bonds to zero.The little known assets are special bonds that can be converted into shares if a bank's overall financial health falls below a certain level. They emerged after the 2008 financial crisis.Analysts have warned that the regulator's move to write off the bonds could weigh on other European banks looking to sell such debt, meaning the UBS-Credit Suisse deal could extend rather than end the banking crisis."The Swiss financial regulator has ordered that Credit Suisse's AT1 bonds be written down to zero. That appears to have spooked investors and has led to a selloff in other bank debt and that's weighed on share prices," AJ Bell investment director Russ Mould said Monday."It means the banking crisis we've seen over the past few weeks has started a new chapter rather than reaching its ending," he added.Read the original article on Business Insider.....»»

The UBS-Credit Suisse megadeal could make it tougher for the Fed to fight inflation without causing a recession. UBS acquiring Credit Suisse has major implications for markets and the US economy.Mike Segar/Reuters UBS has agreed to acquire Credit Suisse for $3.2 billion, as the banking crisis rages on. The Swiss megadeal has implications for US banks, markets, the economy, and interest rates. Here's a closer look at what the UBS-Credit Suisse could mean for American investors. UBS has agreed to acquire Credit Suisse for 3 billion Swiss francs ($3.2 billion). The government-brokered deal aims to calm jittery investors and depositors, and halt the burgeoning banking crisis before it spirals out of control.The planned mega-merger is just the latest development in a dramatic couple of weeks. Three US banks have folded, regulators have rushed to contain the fallout with emergency measures, and Warren Buffett has reportedly spoken to senior White House officials about potentially stepping in to save the day.The Swiss agreement has major implications for US investors. They range from its impact on financial markets and the banking sector, to its potential effect on the American economy and interest rates.Here's a closer look at what the deal could mean.What pressures led to the deal?Credit Suisse has faced a series of scandals in recent years, ranging from bad bets to corporate espionage. Recently, the Swiss banking giant revealed there were "material weaknesses" in its financial reporting.Investors got worried it could be caught up in the turmoil driven by the US bank failures. Their reaction tanked its stock and bonds, and drove up the cost of insuring against the bank defaulting on its debt.Swiss authorities determined the lender was at risk, and pushed UBS to acquire it. The Swiss National Bank has agreed to lend UBS the equivalent of $108 billion to help it see through the merger.Meanwhile, Switzerland's financial regulator has wiped out $17 billion worth of Credit Suisse bonds and removed the need for UBS shareholders to approve the transaction.What does it say about the threat to banks right now?Swiss officials' involvement in the deal, and the substantial sweeteners they've provided to make it happen, suggest they're deeply concerned about the ongoing banking crisis.Those growing worries are reflected in the concerted effort taken by the US Federal Reserve and other central banks at the weekend.  They've come together to help foreign banks get access to US dollars by offering swap operations every day through April, rather than once a week. The mega-takeover also has clear parallels with the banking deals sealed during and after the 2008 financial crisis. That's when JP Morgan scooped up Bear Stearns and Washington Mutual, Bank of America acquired Merrill Lynch, and Wells Fargo bought Wachovia.If more deals lead to more consolidation in the banking industry, that could reflect pressures on smaller lenders are growing, forcing them to seek safety in the arms of larger, wealthier peers.What sparked the concerns about banks?The current turmoil was touched off by Silicon Valley Bank, Signature Bank, and Silvergate all shutting down in the past couple of weeks.In SVB's case, it ran into trouble because it had a high percentage of uninsured deposits. It also invested in long-dated bonds that have plunged in price over the past year, as the Fed hiked interest rates.The bank's cash-hungry, venture-capital-backed customers rushed to pull their money out after SVB sold bonds at a loss and tried to raise fresh capital. They were worried the bank could fail, and they would lose most of their cash.The wave of withdrawals overwhelmed the bank, spurring the Federal Deposit Insurance Corp. (FDIC) to take control and later guarantee all of its deposits. The FDIC also took the same action at Signature, while Silvergate voluntarily closed down.Meanwhile, the Fed established an emergency lending program to help banks easily access capital to weather any further pressures. The banks' challenges, and authorities' efforts so far in response to them, made investors sour on global banks, paving the way for UBS to acquire Credit Suisse.How could the Swiss deal affect markets?Governments worldwide will be hoping the UBS takeover of Credit Suisse will calm fears about the chance of more bank failures. The Swiss government's "whatever it takes" approach could also help restore faith in the financial system.But investors could interpret the rushed deal — seen as a bailout by some — as a sign of desperation in the face of a real threat to vulnerable banks. On Monday morning, UBS shares slumped 7% and the Euro Stoxx Bank Index slid 1%. That suggest the Swiss bank's shareholders aren't impressed by the deal terms, and that the market isn't reassured about the prospects for other lenders.What does the transaction mean for the US economy and interest rates?The UBS-Credit Suisse deal may be a mixed blessing for Americans. It could help to cool inflation, but might also raise the odds of a recession.US inflation spiked to a 40-year high last year, spurring the Fed to lift interest rates from nearly zero to upwards of 4.5% over the past 12 months — and it could raise them again at its meeting this week.Rate hikes help curb price increases as they make borrowing more costly and encourage people to save instead of spend. But at the same time, they can dampen consumer demand and weigh on the prices of stocks and other assets. They can also lift the risk of a recession by pushing unemployment higher.Americans could see the UBS-Credit Suisse deal as evidence of serious underlying problems in banks and the wider financial system.As a result, they might become more conservative in their spending, investing, and hiring — and that might not change until they're certain more banks aren't going to fail. They need to be reassured they aren't going to lose their jobs or suffer a big blow to their retirement savings.That could help the Fed in its inflation fight, but might pose to a risk to financial stability and employment — two other priorities for the central bank.Fed officials could face a situation where they want to hike rates further to crush inflation, but doing so could heap further pressure on lenders and exacerbate the banking crisis, increasing the risk of a broader economic downturn.What does this all mean for the current banking crisis?American investors may well see the UBS-Credit Suisse deal as evidence of a mad scramble to shore up liquidity among lenders and combine different banks.Also, they may view it as a harbinger of more bad news to come — the first in a wave of tie-ups. That's especially a risk given how things played out during the financial crisis.That means US stockpickers and bondholders will be watching for more red flags at domestic banks. They're also likely to keep a close eye on what the authorities do next, to gauge just how serious the current challenges are.Without an unlimited blanket guarantee on bank deposits, it's easy to imagine customers will be wary that more banks could fail. They could seek to park their funds in safer places.The turmoil could weaken inflationary pressures by leading banks to tighten their lending, and by confidence among consumers and businesses.But it could also mean the Fed faces a double whammy: stubborn inflation against a backdrop of fragile growth and employment.That would give it an impossible choice: halt its interest rate hikes and let prices keep rising, or march foward with rate increases that threaten to ramp up pressure on banks and drag the economy into a recession.In short, there are several reasons to think the UBS-Credit Suisse merger could spook investors and exacerbate the banking crisis.Read the original article on Business Insider.....»»

Regional bank shares remained under pressure as investors eye further contagion risk. First Republic stock fell after its credit rating was slashed again. Photo by TIMOTHY A. CLARY/AFP via Getty Images) US stocks were mixed as traders assess the impact of UBS' takeover of Credit Suisse. First Republic Bank fell 16% as S&P Global cut its credit rating yet again. Morgan Stanley's Mike Wilson said bank turmoil marks the start of a "vicious" end to the bear market. US stocks were mostly higher on Monday following a takeover deal of Credit Suisse by UBS over the weekend in an effort to calm concerns of a global banking crisis. On Sunday, UBS bought its smaller rival for $3.25 billion at the urging of regulators eager to shore up confidence in the country's banking system. "With the takeover of Credit Suisse by UBS, a solution has been found to secure financial stability and protect the Swiss economy in this exceptional situation," the Swiss National Bank said in a statement published Sunday afternoon.UBS stock was up 8% in the US, while Credit Suisse's US-listed shares dropped by 50% in morning trades.  In the US, shares of regional banks parred some losses as traders assessed contagion concerns after the collapse of Silicon Valley Bank earlier this month. First Republic Bank plunged 16% after the opening bell as S&P Global cut its credit rating yet again.Mike Wilson, a top strategist at Morgan Stanley, said the failure in the banking sector markets the start of a "vicious" end to the bear market for stocks. "This is exactly how bear markets end — an unforeseen catalyst that is obvious in hindsight forces market participants to acknowledge what has been right in front of them the entire time," Wilson wrote in a note to clients.Here's where US indexes stood shortly after 9:30 a.m. on Monday:S&P 500: 3,926.14, up 0.24%Dow Jones Industrial Average: 32,053.26, up 0.6% (191.28 points)Nasdaq Composite: 11,589.39, down 0.34%Here's what else is happening today:UBS is set to acquire Credit Suisse for $3.2 billion, but deal could make the banking crisis worse.Here are the biggest winners and losers of the historic Credit Suisse and UBS takeover deal. Wall Street's most famous trader told Insider what it was like at the New York Stock Exchange the day Silicon Valley Bank collapsed,In commodities, bonds and crypto:West Texas Intermediate crude oil fell 0.12% to $66.66 per barrel. Brent crude, oil's international benchmark, dropped 0.3% to $72.80.Gold rose 0.6% to $1,985.60 per ounce.The yield on the 10-year Treasury ticked up three basis points to 3.43%.Bitcoin rose 3.16% to $26,651, while ether jumped 1.86% to $1,744. Read the original article on Business Insider.....»»

Goldman Sachs has ruled out an interest-rate hike by the Federal Reserve at its Wednesday meeting, citing "banking stress." The logo of Swiss banking giant Credit Suisse is seen on October 17, 2017 in Zurich.Fabrice Coffrini/AFP/Getty Images) UBS announced a $3.25 billion takeover deal of the beleaguered Credit Suisse on Sunday.  The move builds on a spreading banking crisis, which has already seen the implosions of Silicon Valley Bank and Signature Bank.  Investors are now keeping their eyes peeled as to what this means for the Federal Reserve's next interest-rate decision.  March has been a tumultuous month for financial markets, and it's not over yet. The most anticipated event of the month is almost here – the Federal Reserve's monetary policy decision. On Wednesday, Chair Jerome Powell is expected to announce the central bank's next interest-rate move, following a 25-basis-point increase in February and 50-basis-points hike before that to cool inflation. At a March 7 meeting, Powell delivered a hawkish testimony where he indicated the Fed was prepared to keep tightening policy as inflation remained stubbornly high and a string of economic data suggested the US economy was too hot. It spurred investors to boost bets for a 50-basis point rate hike this month. Banking turmoilHowever, such expectations have since been swept aside by spreading turmoil across the global banking sector. On Sunday, UBS announced a $3.25 billion takeover deal of Credit Suisse as part of efforts to contain the crisis. That was followed by joint action from six major central banks to bolster market confidence via fresh measures to ensure easy funding conditions. The deal to rescue Credit Suisse follows the implosion of several US lenders, including Silicon Valley Bank, Signature Bank and Silvergate Capital, in recent weeks.Markets have now scaled back their rate-hike bets in light of the continuing banking jitters, now mostly anticipating a 25-basis-point increase or even a pause versus a 50-basis-point move expected earlier, according to the FedWatch Tool. Top voices like Elon Musk have also suggested the Fed could start cutting benchmark rates.The yield on the 2-year Treasury note has plunged almost 130 basis points since its March 8 highs, suggesting a U-turn in Fed rate expectations.Why would European bank woes affect Fed monetary policy? For the past many quarters, global central banks have been pursuing joint efforts to curb inflation by tightening monetary policy. While the aggressive rate increases have helped cool price pressures, they've also had some unwelcome side effects. They've dealt a blow to the stock market, the housing sector and now banking. A rapid rise in rates tends to hurt demand for loans, threatening banks' profitability. It can also reduce the value of investment assets held, as in the case of Silicon Valley Bank's bond portfolio. To raise rates or not to raise rates? "The Fed faces an intensified trilemma: how to simultaneously reduce inflation, maintain financial stability, and minimise the damage to growth and jobs. With financial stability concerns seemingly running counter to the need to tighten monetary policy to reduce high inflation, it is a situation that complicates this week's policy decision-making," said top economist Mohamed El-Erian in an Financial Times op-ed, adding that the central bank should avoid keeping rates unchanged and instead, hike them by 25 basis points. Meanwhile, Goldman Sachs has ruled out a Fed rate hike at this week's meeting, citing banking-system stress. JPMorgan's chief investment officer of fixed income, Bob Michele, echoed those views. He said the Sunday deal between UBS and Credit Suisse makes it less necessary for the Fed to tighten rates."I think the regulators in Europe, and Switzerland, and I think those in the US, when you circle back a week ago, responded with a speed we've never seen before and cut a lot of red tape and stopped this in its tracks… The Fed doesn't have to raise rates on Wednesday. The market's going to do the credit tightening for them," he told Bloomberg.Nobel Prize-winning economist Paul Krugman holds a similar view."The banking mess is, as far as I can tell, sufficient reason for the Fed to pause until we know more," he said in a tweet Monday.Read the original article on Business Insider.....»»

The S&P 500 and Dow opened higher on Monday after UBS Group agreed to buy its beleaguered Swiss peer, Credit Suisse, in a deal that was aided by Swiss authorities. The S&P 500 SPX gained 5 points, or 0.1%, to 3,921. The Dow Jones Industrial Average DJIA advanced 90 points, or 0.3%, to 31,952. The Nasdaq Composite COMP shed 16 points, or 0.1%, to 11,618. On Sunday night in New York, the Federal Reserve in coordination with a host of other central banks announced plans to introduce daily U.S. dollar swap-line operations to help bolster liquidity in the global financial system. U.S. banking stocks including holdings of the SPDR S&P Regional Bank ETF KRE traded broadly higher after the open, although weakness persisted in shares of First Republic Bank FRC, which opened sharply lower. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news......»»

Fed-funds futures traders are pricing in a scenario in which Federal Reserve policy makers look past banking-sector developments to some extent, and keep hiking interest rates through May. A 73% chance of a quarter-of-a-percentage-point rate hike for Wednesday was seen, up from 62% on Friday — which would take the fed funds rate target to a range of 4.75% to 5%. Meanwhile, traders boosted the chances of another quarter-point hike in May, to 36% versus 20.7% previously. Treasury yields also bounced back across the board on Monday, led by advances in the 1- and 3-month rates. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news......»»

Futures Reverse Overnight Plunge As European Banks Stabilize From Historic Rout US equity futures, global markets and European bank stocks have stabilized, rebounding off worst levels which saw Europe's brand new banking megagiant UBS plunge as much as 16% before recouping most of the losses... ... as investors digested UBS’s agreement to buy Credit Suisse as well as central bank moves to boost dollar liquidity in an effort to restore confidence in the global financial system. Futures contracts on the S&P 500 were little changed at 7:30 a.m. ET after tumbling 1% earlier. The Stoxx Europe 600 index was modestly higher, with banks and financial services still the sharpest fallers. UBS shares sank as much as 16%, while Credit Suisse sank 60%. European bank stocks pared losses with the Stoxx Europe 600 Banks Index down less than 1%, after after dropping as much as 6%. A gauge of Asian shares fell by more than 1%. In premarket trading, First Republic Bank was poised to extend last week’s record loss as the US lender’s shares plunged 19% after S&P cut its credit rating again. Wells Fargo and Citigroup trimmed US premarket declines. Gold-mining stocks rallied in premarket trading on Monday, after a $3.2 billion deal between UBS and troubled lender Credit Suisse failed to calm nerves in the banking industry, knocking risk appetite. Newmont, the biggest US-listed gold miner, gains as much as 2.6%; Harmony Gold Mining +5.6%, Gold Fields +2.2%, New Gold +3.4%, Wheaton Precious Metals +1.5%, First Majestic Silver +2%, Pan American Silver +0.7%. The price of gold rose above $2,000 an ounce for the first time in a year amid safe-haven appeal. Here are some other notable premarket movers: Cryptocurrency-exposed stocks rise after Bitcoin extended its gains for a fifth consecutive session, with the digital asset reaching levels not seen in about nine months. Marathon Digital (MARA US) +5.6%, Riot Platforms (RIOT US) +8% and Coinbase (COIN US) +4.2% Energy stocks decline as investors’ concern about the banking system spur broad risk aversion and drag crude prices lower. Exxon Mobil (XOM US) slid 1.3%, Chevron (CVX US) -1.1%, Occidental Petroleum (OXY US) -1.1%. For those who were lucky enough to be away from their computers this weekend, this is what you missed: Credit Suisse shareholders will receive 1 share in UBS (UBSN SW) for 22.48 shares in Credit Suisse which reflects a merger consideration of CHF 3bln and that FINMA determined that Credit Suisse’s additional tier 1 capital in the aggregate nominal amount of around CHF 16bln will be written off. Credit Suisse also told staff in a memo that the details of the transaction are being worked through and no disruption to client services is expected, while it told staff there will be no changes to payroll arrangements and bonuses will still be paid on March 24th. UBS said the company will suspend share buybacks and that they did not initiate the discussions but believe the transaction is financially attractive to UBS shareholders and are planning to de-risk and downsize Credit Suisse’s investment banking operations. UBS also noted its strategy is unchanged in US and APAC and said that Credit Suisse is quite complementary to the wealth business in Southeast Asia. Furthermore, Colm Kelleher will be Chairman and Ralph Hamers will be Group CEO of the combined entity, while the transaction is not subject to shareholder approval and there is a material adverse change clause on the Credit Suisse deal. SNB said it is providing substantial liquidity assistance to support the UBS takeover of Credit Suisse and the takeover was made possible with the support of the Swiss federal government, FINMA and SNB, while it added that both banks have unrestricted access to the SNB’s existing facilities. There were also comments from the Swiss Finance Minister that this is a commercial solution and not a bailout, while she noted the cost of bankruptcy to the Swiss economy would have been huge. ECB said it welcomes the swift actions and decisions taken by Swiss authorities and noted that the Euro area banking sector is resilient with strong capital and liquidity positions. ECB’s Lagarde also stated that the ECB’s policy toolkit is fully equipped to provide liquidity support to the euro area financial system if needed. BoE said it welcomes the comprehensive actions by the Swiss authorities to merge UBS and Credit Suisse, while it has been engaging with international counterparts throughout preparations for the announcement. Furthermore, it stated that the UK banking system remains safe and sound and is well-capitalised and funded. Fed Chairman Powell and US Treasury Secretary Yellen said they welcome the announcements by Swiss authorities to support financial stability and noted the capital and liquidity positions of the US banking system are strong and US financial system resilience is strong. Furthermore, they have been in close contact with international counterparts to support their implementation. At least two major banks in Europe are examining scenarios of contagion potentially spreading across Europe’s banking sector and looking to the Fed and ECB to step in with stronger signals of support, according to Reuters citing executives with knowledge of the deliberations. Banking stocks and bonds plummeted after UBS Group sealed a state-backed takeover of troubled peer Credit Suisse, a deal that was shoved down Credit Suisse investors' throats - literally - in an attempt to restore confidence in a battered sector. The Federal Reserve and five other central banks announced coordinated action on Sunday to boost liquidity in US dollar swap arrangements. The Fed’s next policy decision is due later this week, with market attention on whether it may slow or pause interest-rate hikes. UBS emerged as Switzerland’s one and only global bank, a risky bet that makes the Swiss economy more dependent on a single lender. Credit Suisse told staff its wealth assets are operationally separate from UBS for now, but once they merged clients might want to consider moving some assets to another bank if concentration was a concern. The rudest shock in the rushed deal was reserved for the holders of Credit Suisse's riskiest tranche of bonds. UBS is salvaging the most value from the wreckage, says Breakingviews columnist Liam Proud. Hedge fund managers and other large investors believe it is far too soon to call an all-clear on turmoil in the global financial sector. Amid the endless turmoil, the KBW Bank Index plunged 28% over the past two weeks, with financials rattled by concerns over Credit Suisse as well the recent failures of Silicon Valley Bank and two other US lenders. Gains in tech stocks have helped support the overall market, however, as investors look for a safe haven. "The turmoil still has at least a couple of days to play out, and only the Fed can come in and calm that,” Chris Beauchamp, chief market analyst at IG Group Holdings Plc, said on Bloomberg Television. He expects the US central bank to hike rates by 25 basis points as a pause would be interpreted by markets as a sign that the stress in banks is bigger than initially thought. “Assuming these banking stresses do not evolve into something more serious, the European Central Bank and the Fed may perceive that they are at or near their objectives with current policy,” said Brad Tank, chief investment officer for fixed income at Neuberger Berman. “The Fed, in particular, is further along in its tightening cycle and should have more flexibility to pause — and markets are indeed pricing for 2023 fed funds rate cuts once again.” Meanwhile, one day after he revealed his shock that stocks remain resilient and just under 4,000 despite calling for a crah for the past 3 months, Morgan Stanley’s Michael Wilson said the stress in the banking system marks what’s likely to be the beginning of a painful and “vicious” end to the bear market in US stocks, adding that the risk of a credit crunch has increased materially. The S&P 500 will remain unattractive until equity risk premium climbs to as high as 400 basis points from the current 230 level, according to the bearish strategist who two weeks ago flip-flopped briefly to bullish before getting rugpulled by the banking crisis. European stocks are higher after reversing the negative knee-jerk reaction to the terms of the UBS takeover of Credit Suisse. The Stoxx 600 is up 0.6% as gains in utilities, miners and consumer products outweigh declines in bank stocks.  European oil stocks declined as investors’ concern about the potential for a global banking crisis spur broad risk aversion and drag crude prices lower. The Stoxx Europe 600 Energy index slid 1%; among oil majors, Shell declined 1.5%, TotalEnergies -1.3%, and BP -0.6%. Smaller producers also dropped with Harbour Energy falling 5.7% and Tullow Oil -7.7%. Here are the biggest European movers: UBS shares drop as much as 16%, the most in eight years, after a government-brokered deal for it to buy rival Credit Suisse prompted a slew of downgrades Deutsche Bank declines 11%, ING -9.6%, Commerzbank -9.6%, Standard Chartered -8.7%, BNP Paribas -9% following UBS’s agreement to buy Credit Suisse El.En shares slide as much as 9.6% after Berenberg downgrades the laser- equipment maker to hold from buy, saying the company has a “tough year ahead” JM AB falls as much as 7.7% after DNB Markets gave the Swedish construction and building management company its sole sell rating in reinstated coverage Centamin shares rise as much as 6.6%, Endeavour Mining up as much as 7.2% and Fresnillo rises as much as 4.1% as gold gains owing to haven demand amid banking concerns Earlier in the session, Asian stocks declined as the UBS takeunder failed to quell investor concerns about the health of the global financial system.  The MSCI Asia Pacific Index fell as much as 1.4%, reversing most of its gain from Friday, with tech and financial names among the biggest drags. Hong Kong gauges led losses in the region as financial stocks including HSBC and AIA Group fell due to worries over risky bond exposures.  While the takeover of Credit Suisse is seen to reduce the immediate systemic risk for the banking sector, investors are worried over further repercussions from its bonds. Traders are also focused on the Federal Reserve’s rate decision later this week. “Even with the rescue plans over the weekend, it is hard to predict what will happen in the near future,” said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank Ltd. “The measures to restore confidence in banks and to tame inflation go in opposite directions, and the dilemma is reducing risk appetite in the stock market.” China’s onshore equity benchmark erased earlier gains even after its central bank unexpectedly cut the reserve requirement ratio late Friday.  The PBOC’s announcement timing “seems to fall in line with recent global banking jitters, which suggests that the PBOC is on high alert to provide any cushion against any knock-on impact from recent turmoil,” said Jun Rong Yeap, market strategist at IG Asia In FX, the Bloomberg Dollar Spot Index steadied, erasing a decline of as much as 0.2% earlier while the Japanese yen is the best performer among the G-10’s. The New Zealand dollar is the weakest. Australia and New Zealand’s currencies flipped to losses amid souring risk sentiment. “Traders are looking for haven assets again with bank stocks falling, and worries about CoCo bonds gaining momentum,” Mingze Wu, a foreign exchange trader at StoneX Group, said of contingent convertible bonds. “The insistence of the Swiss National Bank to make the UBS-Credit Suisse deal happen suggests the rot was deeper and greater than they might have thought, and the dollar is an obvious beneficiary of this rush to safety” In rates, the nervous start to the trading week prompted a flight to safety, with German and UK government bonds rallying. 2-year TSY yield fell as much as 21bps to 3.63%, while its 10- year peer slid to as low as 3.29%, the lowest since September; traders bet on 15bps of Fed hikes this week but eased tightening beyond by as much as 12bps, pricing 105bps of cuts from the peak in May through to year-end. Bund futures are off their best levels but still in the green with 10-year yields down 4bps while two-year yields fall 8bps. In commodities, oil prices fell again with West Texas Intermediate briefly plunging below $65 a barrel, as escalating investor concerns about a global banking crisis eroded appetite for risk assets including commodities. Gold steadied, after rising above $2,000 an ounce for the first time in a year. Bitcoin remains bid and has extended comfortably above the USD 28k handle for the first time since June, though is yet to convincingly breach USD 28.5k to the upside. There is nothing scheduled on the macro calendar today but there will be plenty of bank related newsflow. Market Snapshot S&P 500 futures down 0.1% to 3,943.50 MXAP down 1.1% to 155.86 MXAPJ down 1.4% to 498.89 Nikkei down 1.4% to 26,945.67 Topix down 1.5% to 1,929.30 Hang Seng Index down 2.7% to 19,000.71 Shanghai Composite down 0.5% to 3,234.91 Sensex down 1.3% to 57,214.31 Australia S&P/ASX 200 down 1.4% to 6,898.51 Kospi down 0.7% to 2,379.20 STOXX Europe 600 up 0.6% to 438 German 10Y yield little changed at 1.95% Euro down 0.3% to $1.0641 Brent Futures down 3.8% to $70.18/bbl Gold spot up 0.8% to $2,005.59 U.S. Dollar Index up 0.17% to 103.88 Top Overnight News from Bloomberg The Federal Reserve and five other central banks announced coordinated action Sunday to boost liquidity in US dollar swap arrangements, the latest effort by policymakers to ease growing strains in the global financial system. UBS Group AG shares slumped Monday as investors digested the news of its historic acquisition of rival Credit Suisse Group AG and began to assess the job of integrating the troubled Swiss lender. The riskiest bonds of European lenders are plunging after holders of Credit Suisse Group AG’s contingent convertible securities suffered a historic loss as part of its takeover by UBS Group AG. A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks were on the back foot amid ongoing banking sector jitters despite the announcement that UBS will take over Credit Suisse in an emergency rescue valued at CHF 3bln which would wipe out CHF 16bln of additional tier 1 bonds. ASX 200 extended its retreat from a recent break beneath 7,000 with declines led by weakness in the energy, real estate,  consumer and financial sectors, although gold miners were boosted after last week’s climb in the precious metal. Nikkei 225 was pressured amid the banking sector woes and after the BoJ’s Summary of Opinions provided little in the way of new information whereby it reiterated that the BoJ must patiently maintain monetary easing. Hang Seng and Shanghai Comp. were varied with Hong Kong underperforming on broad weakness across sectors, while the mainland was kept afloat for most of the session after Friday’s surprise RRR cut by the PBoC in an effort to boost liquidity and support the economy, but opted to maintain its benchmark lending rates. Top Asian News PBoC 1-Year Loan Prime Rate (Mar) 3.65% vs. Exp. 3.65% (Prev. 3.65%); 5-Year Loan Prime Rate (Mar) 4.30% vs. Exp. 4.30% (Prev. 4.30%) PBoC warned the collapse of Silicon Valley Bank shows rapid monetary policy shifts in developed economies are having a hazardous impact on financial stability, according to Bloomberg citing comments from Deputy Governor Xuan. PBoC adviser Cai said China needs household stimulus to boost the recovery and noted that residents' incomes have not grown well in the past few years, so the recovery in consumption is not enough to support economic growth, according to Caijing. Russian President Putin said he expects total trade volume with China to exceed USD 200bln this year and it is important to increase the share of trade with China conducted in national currencies, according to Reuters. WHO advisers urged China to release all information related to the origin of the COVID-19 pandemic after new findings were briefly shared on an international database to track pathogens, while they recommended researchers in China investigate upstream sources of animals and animal products present in the Huanan Market before January 1st 2020, according to Reuters. BoJ Summary of Opinions from the March meeting stated that the BoJ must patiently maintain monetary easing until the price target is achieved and the BoJ must scrutinise without any preset idea the state of market function but must maintain easy policy at present. Furthermore, it stated the BoJ must focus on the risk of losing the chance to meet the price target with a premature policy shift, rather than the risk of being too late in shifting policy and must be mindful of the risk inflation may overshoot expectations. European bourses are mixed/flat, as marked banking-led pressure has eased throughout the morning following the initial reaction to the UBS-Credit Suisse merger. On this, Credit Suisse and UBS opened lower by over 60% and 8% respectively, but have since eased off lows with the broader SX7P index now ~2% lower vs downside of over 5% at worst. On the merger, attention is on Credit Suisse's AT1 bonds being written off; a detail which pressured such bonds in APAC trade, with HSBC for instance a notable initial laggard on this. Since, we have seen European regulators reiterate  that CET instruments are the first to absorb losses, with AT1 only required after their full use. Stateside, futures are in similar proximity to the unchanged mark given the above as participants await updates around  First Republic and look ahead to the FOMC. Top European News BoE's plans to revamp bank capital rules risk a 25% reduction in lending to small businesses which threatens jobs and economic growth, according to a study by consultants Oxera cited by FT. PoliticsHomes' Payne reminds that DUP MPs meet today to discuss their stance on Wednesday's Windsor Framework vote, expected to announce their stance on Tuesday. Moody’s affirmed Greece at Ba3; Outlook revised to Positive from Stable and affirmed Luxembourg at AAA; Outlook Stable, while S&P affirmed Belgium at AA; Outlook Stable. FX The DXY has struggled to benefit from the subdued start to the session, with the index near the mid-point of 103.68-103.96 parameters for much of the morning. Given the tone, the JPY is the standout outperformer with USD/JPY down to 130.55 vs 132.64 peak; though, given the relative pickup in equity performance USD/JPY is now holding above 131.00. Despite the subdued risk tone, CHF is the underperformer as the market's focus remains on Credit Suisse/UBS; USD/CHF above 0.93 and EUR/CHF above 0.99. Given their high-beta status, the Antipodeans are also faring poorly with RBA minutes and Kiwi trade data scheduled ahead. Elsewhere, peers are comparably more contained with EUR/USD holding above 1.0650 and Cable near 1.22. PBoC set USD/CNY mid-point at 6.8694 vs exp. 6.8701 (prev. 6.9052) Fixed Income EGBs and USTs are benefitting from marked haven demand, with Bunds over 140.00 and USTs nearing 117.00 at best, though the benchmarks have eased from highs as equity sentiment improves. Specifically, Bunds soared to a 140.30 peak vs 137.10 low, but have since pulled back to just below 140.00 as the associated 10yr yield slipped to a 1.92% intraday low. Stateside, USTs are similar in both direction and magnitude with yields lower across the curve and action more pronounced in the short-end currently; as it stands, market pricing via Reuters is leaning towards the Fed leaving rates unchanged on Wednesday, with around a 40% chance of a 25bp hike implied. Commodities WTI and Brent are lower intraday given the broader risk tone and while they are off lows, are yet to stage a 'recovery' akin to that seen in equities; currently, the benchmarks are lower by circa. USD 2/bbl just above USD 64.12/bbl and USD 70.12/bbl respective lows. Spot gold surpassed USD 2000/oz, but failed to hang onto the level as the DXY makes its way back into positive territory and broader sentiment improves slightly while base metals are moving with equity sentiment and as such are turning incrementally firmer on the session. Iraq’s Oil Minister said his country is committed to OPEC’s agreed production rates and obliged some oil companies' operations in the south to cut production to come in line with OPEC’s agreed rates, while it was also reported that Iraq and OPEC stressed the importance to coordinate to stabilise prices, according to Reuters. Iran set April Iranian light crude oil price to Asia at Oman/Dubai plus USD 2.50/bbl, according to Reuters. India plans to extend export restrictions on diesel and gasoline beyond March 31st, according to Reuters sources. TotalEnergies (TTE FP) said 34% of operational staff at its refineries and depots conducted a strike on Sunday morning in protest against the government’s move to raise the retirement age by two years, according to Reuters. Kuwait Oil Company declares a state of emergency re. an oil spill located in west Kuwait; production unaffected. Geopolitics Russian President Putin visited Crimea on the 9th anniversary of its annexation from Ukraine and also visited Mariupol in the occupied Donetsk region of Ukraine, while he also met with the top command of Russia’s military operation in Ukraine at the Rostov-on-Don command post in southern Russia, according to Reuters. Russian President Putin said the visit by Chinese President Xi confirms the special character of the Russian-Chinese partnership and Russia is pinning big hopes on the visit, while he added Russia is expecting a powerful impulse to relations and that relations are at their highest ever point. Putin also said there are no limits or forbidden subjects in relations with China and he is grateful for China’s balanced line on events in Ukraine, as well as welcomes China’s willingness to play a constructive role in solving the Ukrainian crisis. Furthermore, Putin said that they are worried about dangerous actions that could undermine global nuclear security and Russia is open to a diplomatic settlement of the Ukraine crisis but rejects ultimatums, according to Reuters. Chinese President Xi said China has always taken an objective and impartial position on the situation in Ukraine and has made efforts to promote reconciliation and peace negotiations, according to Rossiiskaya Gazeta. ICC judge issued an arrest warrant for Russian President Putin over alleged war crimes related to ‘unlawful deportation’ of Ukrainian children, according to The Guardian. It was also reported that German Chancellor Scholz said ICC is an important institution that has been given a mandate through international treaties and noted that nobody is above the law which is becoming clear now, according to Reuters. Ukrainian President Zelensky’s Chief of Staff and several top security officials including the Defence Minister held a call with US counterparts to discuss military aid for Ukraine, according to Reuters. Ukrainian Infrastructure Minister said the Black Sea grain deal has been extended for 120 days which is longer than the 60-day touted by Russia, while a UN spokesman confirmed the extension of the export deal but didn’t specify the length of the renewal, according to Reuters. EU foreign policy chief Borrell said an agreement was reached on ways to implement an EU-backed deal on normalising ties between Serbia and Kosovo, while he added that the sides agreed to implement their respective obligations in good faith. Saudi Arabia’s King Salman invited Iranian President Raisi to visit Riyadh, while it was also reported that Iran’s Foreign Minister agreed to hold a meeting at the foreign minister level with Saudi Arabia and said that Iran has declared a readiness to reopen embassies. In other news, Iraq and Iran signed a deal to tighten their border security. South Korea said that North Korea fired a short-range ballistic missile off the east coast into the sea on Sunday which flew 800km before hitting a target and is a clear violation of the UN Security Council resolution. In relevant news, G7 foreign ministers said they regret inaction by the UN Security Council regarding North Korea’s missile tests and that the March 16th ICBM launch undermines international peace, according to Reuters. North Korea confirmed it conducted exercises aimed at improving tactical nuclear capability on March 18th-19th and said the US and South Korea are expanding joint military drills aimed at North Korea involving US nuclear assets and its exercises are meant to send strong warnings against US and South Korea. Furthermore, North Korean leader Kim said the country should be ready to conduct nuclear attacks at any time in a deterrence of war, according to KCNA. US Event Calendar Nothing major scheduled DB's Jim Reid concludes the overnight wrap This weekend felt like being transported back into 2007-2008 in many respects with a race-against-time deal between UBS and Credit Suisse being put together in full view of the market. The most remarkable thing about yesterday was the huge swings in Credit Suisse AT1s on a Sunday. Clips of the $17.3bn of outstanding CS AT1 bonds seemed to trade at both ends of a mid-20s to around 70c range as the outline of the UBS deal filtered through. It was eventually a shock that the AT1s were zeroed in the deal even as UBS eventually bought CS for $3.3bn, a firmly positive number. This was however less than half what they were worth at the close on Friday and down 99% from their peak pre-GFC. The decisions to wipe out AT1 bondholders is going to be the biggest issue medium and longer-term for the European banking sector, especially when the company was bought with a positive value yesterday. It's hard to argue with the morals of it but it will likely increase the cost of capital for banks which could lead to an additional tightening of lending conditions. So that c.$17bn of debt destruction could eventually be worth multiples of that to the wider European economy and in other regions too. Selected Asian AT1 securities are trading around 5-10% down as we type and HSBC equity is around -6% in Hong Kong so this serves as a benchmark for the European banking open. The good news at the macro level is that the CS situation has been dealt with and there are no obvious European next shoes to drop at this stage. CS had been decoupled from the rest of the continents' banking sector for months now and therefore was by far and away the weakest link when the US regional banking woes began less than 2 weeks ago. So the market has now got to balance the reduction of systemic risk with the likely higher cost of some forms of bank capital. There will also be nervousness as to how easy it was to change laws and market conventions in order to get this deal done. Some risk premium will surely be factored in to the cost of capital for the sector now. Meanwhile, in a coordinated global response, the Fed in a statement along with five other central banks - including the BOE, the BOJ, the ECB and the SNB - last night announced that they would enhance dollar swap lines i.e., to increase the frequency of swap line agreements from weekly to daily, beginning March 20 and will continue “at least” through the end of next month. In doing so, the central banks indicated that the move would serve as an “important backstop” amid financial market unease, thereby helping to keep credit flowing to households and businesses. Overall, Asian equity markets have started the week on a weaker footing with the Hang Seng (-2.56%) leading losses across the region, with the Nikkei (-1.01%) and the KOSPI (-0.46%) also dipping in early trade. Elsewhere, stocks in mainland China are bucking the regional negative trend with the CSI (+0.12%) and the Shanghai Composite (+0.12%) both trading slightly higher. Note their was a 25bps RRR cut on Friday. Outside of Asia, US stock futures tied to the S&P 500 (+0.12%) and NASDAQ 100 (+0.23%) are relatively flat which helps after the weekend news but then again as you'll see from the weekly review at the end the S&P 500 was higher last week in the face of incredible turmoil elsewhere. Meanwhile, yields on 10yr US Treasuries are stable while 2yr yields (+2.92bps) briefly touched 4% before sliding back to 3.87% as we go to press. Moving forward, it's hard not to have sympathy for the Fed this week. Any criticism of their policy should probably be more directed to the actions of 2020-2021 for keeping policy excessively too loose as government spending, money supply and inflation was surging. Today they are in a catch-22 position where the excesses of those days (and earlier) are now unravelling while inflation is still way above target. Their rate decision on Wednesday will be the undoubted non-banking related highlight of the week but we will also have the BoE meeting (Thursday), UK CPI (Wednesday), Japan CPI (Thursday), flash global PMIs (Friday) which might capture a small amount of the turmoil period, and importantly Chinese President Xi Jinping will be in Moscow from today to Wednesday. After the FOMC, it will be the BoE's turn on Thursday to decide on rates. Our UK economists preview the meeting here and expect a final +25bps hike as well as likely dovish forward guidance amid concerns over overtightening risks. The decision will follow a host of UK inflation data released on Wednesday. Also on Thursday markets may follow the SNB meeting more closely than usual following this week's turmoil around Credit Suisse. Aside from several monetary policy decisions, there will also be a plenty of central bank speakers, especially from the ECB, including President Lagarde (twice), following last week's +50bps hike. In the US, aside from the PMIs investors will also get durable goods orders (DB forecast -0.5% vs -4.5% in January) on Friday and a host of regional Fed indicators throughout the week to gauge economic sentiment. Housing market data including existing home sales (tomorrow) and new home sales (Thursday) are also due. Over in Europe, other key data will include the PPI (today) and the ZEW survey (tomorrow) for Germany, Eurozone consumer confidence on Thursday and UK consumer confidence and retail sales on Friday. Moving on to Japan, the key release will be the CPI report on Thursday. Our Chief Japan Economist (full preview of the week ahead here) expects government subsidies for electricity and gas to weigh on core CPI inflation (3.2% vs +4.2% in January) but core-core CPI ex. energy to pick up 3.4% (3.2%) but reach its peak for the cycle. Looking back on a tumultuous last week now. On Friday, with market volatility already elevated from the growing concerns around the global financial system the preliminary University of Michigan sentiment survey dropped -4.6pts to 63.4. That was just the second monthly drop since last June, and the lowest reading since December. The declines pre-dated the SVB collapse. If one wanted to find a positive in the report inflation expectations were lower with 5-10yr expectations down to 2.8% (2.9% expected), while the 1yr inflation expectation was 3.8% (4.1% expected). That’s the lowest 1yr expectations have been since April 2021. That was just the last link in a chain of market moving events last week that repriced Fed futures across the curve. Expectations for a 25bps hike at the March meeting is now at just 60% with a 15.0bp hike priced in. That is down -18.3bps on the week and -4.2bps on Friday, as well as -27.8bps since Powell’s testimony before the Senate Banking Committee the week before last. At the same time, the expected terminal rate ended the week at 4.794% by the May meeting after starting the week at 5.285% at the June meeting and being as high as 5.691% at the September meeting on the prior Wednesday before the SVB news broke. Futures are also now pricing in nearly -96bps of rate cuts by year-end after starting the week with -40bps of cuts priced. 10yr Treasury yields fell back another -14.8bps on Friday and -27.0bps over the course of the week to their lowest level since early-February at 3.429%. The 2yr yield saw a much bigger move, coming down -74.9bps last week (-32.0bps on Friday) to their lowest level since September 2022. On this side of the pond, 10yr bund yields fell back -40.0bps (-18.2bps on Friday) last week to 2.108%, its lowest point since the first week of February. The 2yr bund yield fell by -71bps last week (-22.0bps Friday) in its most significant weekly down move since September 1992. While sovereign bonds outperformed last week, US equities whipsawed with a large amount of dispersion. Even though the S&P 500 closed the five days higher, US banks continued to selloff with the KBW bank index down -14.55% last week (-5.25% Friday), with major banks like JPM (-5.87%), BofA (-8.09%), Citi (-8.46%), and GS (-7.26%) outperforming while the regional bank ETF KRE was down -14.30% last week. With CS seeing pressure from a lack of depositor and investor confidence, the SNB offered the Swiss bank a 50bn franc credit line. However this was not enough to stop the stock from ending the week -25.48% lower (-8.01% Friday), while European Banks at large were down -13.40% (-2.72% Friday) leaving the index up just +1.2% YTD. The STOXX 600 was down -3.85% week-on-week (-1.21% on Friday), whilst the CAC and DAX fell -4.09% (-1.43% on Friday) and -4.28% (-1.33% on Friday) respectively. With risk markets selling off, credit spreads widened significantly on the week once again. The Euro Crossover HY CDS index was +66.7bps wider (+18.8bps wider Friday) and EUR IG CDS +18.1bps wider on the week (+3.8bps Friday). EUR HY CDS is now +18.9bps wider YTD, with EUR IG +9.9bps wider since the start of the year. US credit also significantly widened again as the US HY CDS index was +31.6bps wider (+26.8bps Friday) with IG +4.8bps wider following a +5.1bps move on Friday. The weekly widening has left USD HY CDS +45.7bps wider YTD, while US IG CDS was +5.8bps wider YTD. Finally in commodities, industrial inputs sold off as recession fears rose. Brent crude fell back -11.85% (-2.32% on Friday) and WTI was down -12.96% (-2.36% on Friday), meanwhile European natural gas futures reversed the prior week’s significant rally with energy prices falling -18.92% week-on-week (-3.35%). Copper was down -3.26% (+0.72% Friday) while the overall Bloomberg Commodity index was down -1.87% (-0.16% Friday). With the risk-off tone throughout markets, Gold was a notable outperformer with the precious metal up +6.48% on the week (+3.63% Friday) in its best weekly performance since Covid to close at its highest level in a year at $1989/oz. Tyler Durden Mon, 03/20/2023 - 08:03.....»»

The 'Bad News' Is More European Than US... For Now Authored by Peter Tchir via Academy Securities, Quick Rundown With markets moving quickly, we will do a quick recap of where we are at and what we think will be most important for markets this week. It is a follow up from Saturday’s, Gasp, Gulp, Glug and Sunday’s 8 Cup of Coffee Day. Academy was able to participate in Bloomberg’s Banking Special yesterday, with this portion of our interview, focused on AT1, being made into its own clip (the rest of the interview was also interesting, I think, but will find that clip later). And, finally, we got to wake up to Academy making it into the NY Times coverage of Investors Greet CS Deal Warily. Biggest Concerns The one thing we did not get this weekend was an explicit guarantee of bank deposits in the U.S. IT is “implicit” because depositors were saved at Signature Banks and Silicon Valley Bank using emergency measures, but it has not been made explicit. As every equity and credit analyst, as every private equity firm, questions companies on their “cash and cash equivalents” line and demands to know where they are banking, more pressure will mount to continue move out of deposits (I don’t think it is a matter of safety, but one of expedience). What I’ve missed until this weekend is how problematic that is, not just for mid-size banks, but for the 100s or even 1000s of smaller banks, that are highly regionalized or even localized. Many of whom are the lifeblood of daily business in those areas. This could/should come, but until it does, there will be pressure on these banks (I like buying dips and growing an outsized position in this space) despite the lack of clarity. The decision to wipe out CS AT1 bonds. Bonds that had been trading in the mid to high 80’s and even 90’s as of March 10th traded at like 2 today. I’ve read many arguments that “support” that decision, as these were meant to be provide a capital “buffer” at times of stress, but the equity is getting paid and no official capital ratios were signaling this treatment. There are two problems with this from a European financial standpoint: Asset managers who own any AT1 paper will have to question that decision, and it will focus their attention on the weakest bank(s) in every country. The ability to raise this important level of capital is gone, at least for some time, for many, if not all banks in Europe. The decision spreads “realized losses” outside of the banking system. My understanding is banks don’t own much of each other’s AT1 paper as the treatment is onerous. So this means it is spread out throughout the financial system. Who knows what new trouble that might cause? Back of Mind Concerns No meaningful equity infusions into banks that have been trading poorly of late. This is only back of mind, rather than front and center, because we I think explicit guarantees are an almost necessary condition for this to occur. It seems odd to me that UBS stock is doing poorly, even relative to other European bank stocks, as on the surface it seems that either they got a good deal (not only was the cost low, the AT1 debt wiped out, funding (albeit senior in bankruptcy funding) is available from the SNB, but there is some additional loss backstop being provided), or the price of other banks seems expensive. It did not appear, from the series of press releases on Sunday that UBS was an “enthusiastic” buyer which is also a concern, given they had more time than anyone else to examine the books (though even that time was short relative to the complexity of a major international finance company). Central Banks are “selling” their cooperation (dollar funding lines, etc.) a little too hard. More concrete and unexpected action would be more helpful than just following what has become a standard “crisis” playbook. Good(ish) News No bank default in Europe. I don’t think anyone really thought this would happen so its only mildly positive and more than offset by the AT1 treatment. Oil is below $65 for the first time since 2021!  It is good from an inflation front, but not sure what it means from an economic standpoint. Fed balance sheet is growing! I think markets are getting a little too excited about balance sheet growth, but the 2020/2021 playbook of lower interest rates and balance sheet growth driving stock prices higher (especially the riskiest sectors) is fresh in everyone’s mind. I do think Powell might have to discuss the possibility of suspending QT at this meeting. Few if any more Fed hikes. I don’t see how in this backdrop, where financial conditions are almost certain to tighten (funding pressure on banks, does that), the Fed can ignore the lag effects. Yes inflation has ticked up, but nothing right now is indicating we are on a strong economic path until the banking concerns get resolved. Oil seems to support a pause too. Bottom Line The “bad news” is more European than U.S. so be cautious with Europe on the stock and bond front. There is a very real possibility that we see some action on bank deposit guarantees so expect a bounce in U.S. stocks (especially the banks). The easy money Fed trade is probably already overdone, but could easily continue, so fade that cautiously, especially with the possibility of some good news on the bank deposit front. It is difficult to like interest rates at these levels, so reduce rate risk, at least for a trade, in the U.S. Weirdly, the rally in gold (balance sheet growth) and bitcoin (a massive anti-bank, anti-establishment sentiment) make sense. Good luck out there and be nimble, it seems like it could be another long week! (hopefully this note is still remotely relevant by the time you get it, which is anyone’s guess in this crazy, headline driven market). Tyler Durden Mon, 03/20/2023 - 08:15.....»»

Wall Street Reacts To Credit Suisse Bailout: UBS Default Risk Hits 11-Year High Unsurprisingly, CS shares collapsed to their UBS bid price... UBS share price is bouncing back from its ugly 16% opening plunge, but remains in the red... But UBS CDS has jumped to its highest since July 2012... ...after a government-brokered deal for it to buy rival Credit Suisse prompted a slew of downgrades from analysts, who warned of risks to the lender’s future earnings. KBW analyst Thomas Hallet cuts UBS to underperform from market perform, saying there is “considerable uncertainty around the earnings trajectory, while buybacks have been put on hold.” Buybacks were a key part of the investment thesis for UBS, he adds. Hallett also notes “unknowns and uncertainties” around key areas such as capital requirements and litigation risks, while the decision to write-down AT1 bonds will unsettle some. Says once the accounting noise has died down and there is more certainty on what value the transaction has generated, it could be a compelling deal. Another KBW analyst Andrew Stimpson expects that the move to wipe out AT1 bond holders to weigh on banks’ shares. Though the deal reduces contagion risk, he is “more fearful” of a rise in funding costs going up due to the decision on AT1s, or because of additional regulation on liquidity. Oddo analyst Roland Pfaender also cuts UBS to underperform from neutral, citing high execution risk on the deal, which saw “very limited due diligence”. Notes that UBS management expects deal to be EPS accretive only by 2027, and has suspended share buybacks. Says significant integration effort might dilute UBS’s technology and growth initiatives. Vontobel’s Andreas Venditti (buy) cuts price target to CHF19.5 from CHF22.5 citing higher cost of equity due to higher risk. Says UBS’s investment case changes “substantially”. Adds there are many significant risks, while issues currently impacting the global banking sector are not over. Manulife Investment Management (Marc Franklin, a portfolio manager of multi asset solutions). “Putting up a firewall to ensure that a bank run doesn’t result in further bank runs and loss of confidence elsewhere in the system,” the policymakers have acted quickly over the weekend. They don’t want financial markets to take the pressure as “we are in the process of significant liquidity tightening cycle as a result of central banks trying to tackle the inflation problem”. But after all that negativity, there were some upgrades on UBS, praising the logic behind the deal. BofA’s Alastair Ryan upgrades UBS to buy, praising the “impeccable” logic of the deal, due to cost synergies and enhanced scale. Notes it gives UBS a 30% share in Swiss deposits; writes that “UBS is acquiring for US$3bn a – troubled – company with US$54bn equity.” Raises price target to CHF23 from CHF21 ZKB analyst Michael Klien, however, raises UBS to outperform from market perform, saying that while the transaction increases the risk profile for UBS, the potential benefits are likely to outweigh the risks. Adds the transaction should be completed within a few weeks and should positively impact earnings per share. Morningstar analyst Johann Scholtz says “I think what will give investors confidence is the level of government support involved both in the form of liquidity and in the form of guarantees for future losses on the Credit Suisse portfolio and also restructuring costs”. This a very unique banking crisis in the making, where there hasn’t really  been a credit event yet, Scholtz says in a Bloomberg TV interview. However, most were more pessimistic than optimistic in the longer-term... IG Markets’ Hebe Chen says the deal is a “strong wake-up call” to those who still believe that financial markets are not yet in a crisis. “If the collapse of SVB is more attributed to the external monetary policies, the fall of Credit Suisse exposed the rotten roots in the banking system — the poor risk controls and mismanagement. As such, the fall of Credit Suisse may have just been the tip of the iceberg”. Jefferies analyst Flora Bocahut says the deal removes immediate tail risks, but it raises more questions; UBS’ capital requirement will likely be revised up, and management focus will be captured by this deal for many quarters, maybe years, she adds. The earnings impact is difficult to assess, but that should indeed initially be dilutive for UBS, with the issuance of new shares and consolidation of a largely loss-making Credit Suisse. Citigroup analyst Andrew Coombs says UBS’ deal potentially has large cost synergies, but also carries the risk of sizable revenue attrition. For Swiss consumers, more than 25% mortgage market share is now with a single bank; there’s also increased concentration risk for private banking clients, a number of whom will have relationships with both banks. For the overall European banking sector, additional tier-1 costs may rise and deposit guarantee scheme limits may be reviewed. Charles-Henry Monchau, CIO at Banque Syz says “I really don’t like what happened on AT1. The risk is that all AT1 bonds collapse - so beyond Credit Suisse. This will put major pressure on banks’ financial ratios”. BetaShares Holdings’ Chamath De Silva, a portfolio manager says that apart from specific bank credit spreads and CDS premiums, the wider corporate bond market is not displaying signs of severe stress, despite some softening. Still, “the news of around $17 billion worth Credit Suisse’s AT1 securities being wiped out during the UBS takeover could spur additional credit selling”. And, as we noted earlier, that decision to wipe out CS' AT1 bonds spreads “realized losses” outside of the banking system. Our understanding is banks don’t own much of each other’s AT1 paper as the treatment is onerous. So this means it is spread out throughout the financial system. Who knows what new trouble that might cause? Tyler Durden Mon, 03/20/2023 - 08:36.....»»

Treasury yields reverse an earlier run of risk aversion that had sent investors into perceived havens......»»

The latest price moves in bitcoin (BTC) and crypto markets in context for March 20, 2023. First Mover is CoinDesk’s daily newsletter that contextualizes the latest actions in the crypto markets......»»

Norwegian Cruise Line Holdings Ltd. NCLH said Monday Chief Executive Frank J. Del Rio has decided to retire and step down from this position as president and from the board of directors effective June 30. The company named Harry J. Sommer, who has been chief executive of Norwegian Cruise Line since 2020, as its new CEO effective July 1. Del Rio will remain in a consultant capacity as senior adviser to the board through 2025. Sommer will be replaced by David J. Herrera at NCL. Herrera has served as chief consumer sales and marketing officer of NCL since 2021. Del Rio spent three decades in the cruise business and has led the company since 2015. Sommer, 55, has more than 30 years of cruise experience. The stock was slightly higher premarket, but has fallen 37% in the last 12 months, while the S&P 500 SPX has fallen 12%. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news......»»

Oatly Group AB OTLY said Monday it inked a partnership deal with McDonald’s Austria, a unit of McDonald’s Corp. MCD , to offer Oatly Barista Edition dinks to McDonald’s McCafé locations in Austria. Oatly Barista is the first oat drink product ever to be made available to McCafé locations across Austria, the company said. Financial terms of the deal were not disclosed. Oatly stock is down 2.6% in premarket trade. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news......»»

SVB Financial SIVB , the former parent of Silicon Valley Bank, on Monday said it’s received “significant interest” from prospective buyers in a reorganization effort underway with financial adviser Centerview Partners LLC. The company also said it filed “first-day motions” in U.S. Bankruptcy Court to support operations of SVB Capital and SVB Securities. On March 14, SVB Financial Group filed a voluntary petition for a court-supervised reorganization under Chapter 11 of the U.S. bankruptcy code, after a run on deposits caused Silicon Valley Bank to fail. Silicon Valley Bank now operates as Silicon Valley Bridge Bank, N.A. under the jurisdiction of the Federal Deposit Insurance Corp., and is no longer affiliated with SVB Financial. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news......»»

BioNTech SE BNTX will pay $200 million to the privately held OncoC4 Inc. as part of a deal to develop and commercialize OncoC4’s monoclonal antibody treatment that is being tested in several cancers. OncoC4 is also eligible for milestone payments and royalties, though the terms were not disclosed in the news release. BioNTech’s stock is down 13.7% so far this year, while the S&P 500 SPX is up 2.4%.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news......»»

Shares of FleetCor Technologies Inc. FLT were headed more than 1% higher in premarket trading Monday after the business-payments company said it would conduct a strategic review. Fleetcor will engage in “a review of its portfolio and business configuration, with the goal of driving enhanced shareholder value,” according to a Monday morning press release. “The portfolio review will assist the board as it considers various strategic alternatives, including but not limited to the possible separation of one or more of the company’s businesses.” The review is expected to wrap up by the end of 2023. Additionally, Fleetcor announced Monday that it has “entered into a cooperation agreement” with shareholder D.E. Shaw. As part of their agreement, the company has appointed former RevSpring CEO Rahul Gupta to its board and will add one more mutually agreed-upon board director down the line.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news......»»

The Federal Deposit Insurance Corp. said Monday it’s extending the bidding for former units and assets of Silicon Valley Bank, which has been renamed Silicon Valley Bridge Bank since the government took it over on March 10. “There has been substantial interest from multiple parties, and the FDIC and the bidders need more time to explore all options in order to maximize value and achieve an optimal outcome,” the FDIC said. The FDIC said it will allow parties to submit separate bids for Silicon Valley Bridge Bank and its Silicon Valley Private Bank units. Qualified, insured banks, and qualified, insured banks in alliance with nonbank partners will be able to submit whole-bank bids or bids on the deposits or assets of the institutions, the FDIC said. Bank and non-bank financial firms will be permitted to bid on the asset portfolios. Bids for Silicon Valley Private Bank are due by 8 pm Eastern time on March 22, and on March 24 for Silicon Valley Bridge Bank.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news......»»

Shares of Nurix Therapeutics Inc. NRIX gained about 6% in premarket trading on Monday after Gilead Sciences Inc. GILD said it exercised the option to exclusively license Nurix’s targeted protein degrader molecule, which is being considered as a tool to treat inflammatory conditions like rheumatoid arthritis. Per the terms, Gilead will pay $20 million upfront, with an additional $425 million in potential milestone payments. The companies first partnered in 2019, with Gilead making a $45 million upfront payment and giving Nurix the potential of $2.3 billion in additional milestones. Nurix’s stock is down 17.9% this year, while the S&P 500 SPX is up 2.4%.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news......»»