Welcome back,

The bank that started March’s madness in the banking sector is about to be bailed out.

Let’s keep it concise.

Market Headlines 👀

• First Citizens (FCNCA) to buy Silicon Valley Bank (SIVB) after biggest failure since 2008.

• Disney (DIS) begins 7,000 layoffs.

• Binance (BNB) and its CEO sued by CFTC over US regulatory violations.

• CVS (CVS) expects to close $8B Signify (SGFY) deal this week.

• Twitter (TWTR) source code leak turns into hunt for perpetrator.

• TikTok bill to move forward, according to the US House speaker.

• Elon Musk puts $20 billion value on Twitter (TWTR).

• Credit Suisse (CS) could face disciplinary action, Swiss regulator says.

• Money market funds swell by more than $286B as investors pull deposits from banks.

• Swiss finance minister defends rushed banking takeover.

• China’s economic rebound is weaker than expected, warns Maersk.

Earnings 💸

• Carnival (CCL)

  • EPS: -$0.55 beats (exp. -$0.60)

  • Revenue: $4.43B beats (exp. $4.33B)

• PVH (PVH)

  • EPS: $2.38 beats (exp. $1.67)

  • Revenue: $2.49B beats (exp. $2.37B)

Recap Around the Street 🧠

Investors are still processing the banking crisis. The collapse of Silicon Valley Bank earlier this month — and the turmoil that has hit the banking industry in its wake — is continuing to ripple through markets. This week, investors will be watching bank stocks closely for more signs of contagion and potential broader effects.

The banking shock and its hit to consumer confidence, credit availability and business investment brings about the possibility that a recession could start as soon as the end of this year.

But, there may be a silver lining: In a research note earlier this week, Morgan Stanley (MS) strategists believe the crisis and reaction from regulators to prevent more banks from collapsing "represents the beginning of the end of the bear market."

MS argues a ripple effect could force market participants to recognize that earnings estimates are too high. That could slash expectations and companies could lower guidance on their upcoming earnings reports. When earnings reports come in lower than expected, stocks tend to sink.

The combined weighting of Apple (AAPL) and Microsoft (MSFT) in the S&P 500 has risen to the highest level on record. The FAANG era may be coming to an end, with Apple and Microsoft’s combined weighting in the S&P 500 rising to 13.3%. This is the highest share of two stocks in the benchmark since 1978, when IBM (IBM) and AT&T (T) had a greater share.

In contrast, the influence of other big tech stocks has declined in recent years. Over the past decade, the FAANG stocks have seen robust gains year after year. Their concentration in the S&P 500 has surged, making up around one-quarter of the index in August 2020.

Although that share has since edged down to 21%, some investors worry that the index is still top-heavy. For example, a significant pullback in a few stocks could leave broader markets susceptible to a fall. Apple and Microsoft have emerged as havens in recent stock market turmoil, bringing their weightings in the S&P 500 to 7.11% and 6.14%, respectively.

Market Preview 🎞️

• Tuesday, March 28: US House price index; Richmond manufacturing index; Fed’s Barr testimony before the U.S. Senate Committee on Banking, Housing, and Urban Affairs; German consumer sentiment; BoE Treasury Select Committee hearing on Silicon Valley Bank

• Tuesday earnings: Lululemon (LULU), McCormick (MKC), Walgreens Boots Alliance (WBA), Micron (MU), and Dave & Buster's Entertainment (PLAY)

• Wednesday, March 29: US Mortgage applications, home sales; Crude oil inventories; Conference Board consumer confidence, Fed’s Barr testifies before the U.S. House Financial Services Committee; SNB quarterly bulletin; Australia Consumer Price Index

• Wednesday earnings: RH (RH), Cintas (CTAS), Paychex (PAYX), and EVO Payments (EVOP)

• Thursday, March 30: US Q4 GDP (final); EU Flash inflation (Germany, Spain); EU Economic Sentiment Indicator

• Thursday earnings: EVgo (EVGO), BlackBerry (BB), Rumble (RUM), and Duck Creek Technologies (DCT)

• Friday, March 31: US Core PCE; Michigan consumer sentiment; Canada GDP month-over-month; EU unemployment, Flash estimate inflation for the Euro Area; CPI Inflation (France, Italy); German retail trade and labor report; UK Q4 GDP; SwitzerlandConsumer Price Index

That’s all for today, folks! We’ll be back around the same time tomorrow with a curated list of important news, economic data and market highlights. 

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