7 things you may have missed during this week’s banking crisis

Today’s newsletter is over Brian Sozzi, editor-in-chief at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and further LinkedIn. Read this and more market news on the go with the Yahoo Finance app.

Treasury Secretary Janet Yellen, Federal Reserve Chairman Jerome Powell, and anyone remotely connected to the financial services industry can no doubt benefit from a drink (or five) after a crazy week in business.

The long-troubled Credit Suisse (CS) seized $54 billion from the Swiss government. The rapidly melting First Republic (FRC) scored a $30 billion uninsured deposit injection by 11 rival banks. The assets of the Silicon Valley Bank (SIVB) are still being bought by the FDIC after the collapse a week ago.

Banking sources have told the Yahoo Finance newsroom that more bank robbers may be on the horizon. The KBW Bank ETF is now down 29% for the month.

And yet analysts still love financial stocks!

Did we mention there’s a Federal Reserve meeting next week? One in which Nomura (NMR) thinks the Fed will LOWER interest rates.

Here are a few things that caught our attention during this wild week on Wall Street:

The logo of Swiss bank Credit Suisse can be seen the day after shares fell about 30%, on March 16, 2023, at the Oerlikon office building in Zurich, Switzerland. (Photo by Arnd Wiegmann/Getty Images)

1. A Credit Suisse buyer?

UBS (UBS) could step in to buy the ailing Credit Suisse, JPMorgan analyst Kian Abouhossein speculated in a client note.

“We see a resolution scenario as the most unlikely in our view and more likely an intervention with the third option of a takeover as the most likely scenario, especially by UBS,” the analyst said.

Exactly what UBS needs during a banking crisis: to take over the assets and culture of a very troubled rival.

2. Downgrade of the First Republic

Wedbush analyst David Chiaverini downgraded First Republic’s rating to Neutral from Outperform and sees the stock crash to $5. Shares of First Republic traded hands at $25 as of Friday afternoon.

“We believe that a distressed M&A sale could result in minimal or no resale value for common stockholders because of FRC’s significant negative tangible book value, taking into account the fair value marks on its loans and securities,” Chiaverini said. “We note that the assets of an M&A target in an acquisition should be measured at fair value.” cheeky.

3. Kellogg’s CEO sees no change in ending food stamp benefits

Steve Cahillane, CEO of Kellogg, told me (video above) that he doesn’t see people spending less because food stamp payouts stopped earlier this month. Those checks put an extra $95 per month into the hands of lower-income consumers.

4. FedEx layoffs

FedEx execs casually slipped into their earnings call, almost vertiginously, that they were cutting jobs to finally deliver better returns for investors. “By the end of this fiscal year, we expect the U.S. workforce to be down about 25,000 on an annualized basis,” execs said.

5. Fed Rate Cut

The future favors the bold. To that end, Nomura strategist Aichi Amemiya was the first on the street to drop a rate cut ahead of the Fed’s next policy meeting. His view: “In response to looming financial stability risks, we now expect the Fed to cut rates in 25 bps increments at the March FOMC meeting from where we previously expected a 50 bps rate hike since Feb. 24.”

6. Legislators eye banking rules

Rep. Maxine Waters (D-CA), the top Democrat on the House Financial Services Committee, came out against the banks in a conversation with Yahoo Finance’s Jennifer Schonberger. “This is all about regulation, and this is all about the fact that at one point there was a lot of advocacy for the regional banks and smaller banks not having to comply with some of the regulations that might not be in place. ” have allowed to enter [this situation]Waters said on Yahoo Finance Live. The reading: The return of tighter banking regulation is imminent.

7. Banks come to the rescue

Curious how the $30 billion deal for First Republic came about? The Yahoo Finance team of Dan Fitzpatrick and David Hollerith is here to help.

Brian Sozzi is the editor-in-chief of Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and further LinkedIn.

Click here for the latest stock market news and in-depth analysis, including stock-moving events

Read the latest financial and business news from Yahoo Finance






Leave a Reply

Your email address will not be published. Required fields are marked *