Welcome back,

The Swiss National Bank just blessed Credit Suisse with a liquidity lifeline up to $54B, in turn blessing the European Central Bank’s latest 50 bps rate hike.

Not to be outdone, the Fed announced this hour that eleven big banks will bailout SVB for $30B.

Let’s keep it concise.

Market Headlines 👀

• JPMorgan (JPM), Citigroup (C) and other big banks are in talks to bolster First Republic (FRC).

  • Fed, Treasury, FDIC and OCC say 11 banks have deposited $30B in FRC.

  • FDIC returned $40B in US Treasury funds, reversing withdrawal after SVB (SIVB) takeover.

• Credit Suisse (CS) to borrow up to nearly $54B from Swiss National Bank.

  • UBS (UBS), Credit Suisse (CS) oppose idea of forced combination.

• ECB raises rate by 50 bps to 3.5% (est. 3.5%).

• US threatens ban if TikTok’s parent ByteDance doesn't sell its stakes.

• Stripe nearly halves valuation to $50B following $6.5B raise.

• Boeing (BA) issues upbeat jet finance outlook amid market turbulence.

• WeWork (WE) nears deal for capital injection and debt conversion.

• Influencers and YouTubers that promoted FTX sued for $1B in a class action lawsuit.

• Microsoft (MSFT) to bring OpenAI’s chatbot technology to the office.

• US Treasurys’ trading snarled by market stress.

• Fed to launch instant payment service “FedNow” in July.

• US jobless claims drop by most since July to 192K (exp. 205K), led by New York.

• US building permits in February soar +13.8% to 1.524M (est. 1.34M; prev. 1.339M).

• US housing starts in February jump +9.8% to 1.45M (est. 1.31M; prev. 1.321M).

• China pauses GDR approvals, threatening Europe share sale boom.

• Virgin Orbit (VORB) to pause operations and furlough nearly all employees.

• Volkswagen (VWAPY) introduces €25K EV to compete with Tesla.

• UK spring budget strives to jolt economy with childcare and pension reforms.

Earnings 💸

• FedEx (FDX) (Q3)

  • EPS: $3.41 beats (exp. $2.73)

  • Revenue: $22.17B misses (exp. $22.74B) 

• Dollar General (DG)

  • EPS: $2.96 inline (exp. $2.96)

  • Revenue: $10.2B misses (exp. $10.24B)

Recap Around the Street 🧠

Financial conditions are as tight as they ever were last year. And outside of the Lehman and Covid crises, conditions have never tightened faster.

The recent troubles at Silicon Valley Bank (SVB), which saw the institution placed under regulatory scrutiny and depositors pulling funds, has raised concerns about contagion in the banking system and potential risks to the wider economy.

Some suggest that the immediate risk of a bank run is overdone. Others fear that SVB could trigger a harder economic landing, leading to tighter lending standards and a credit crunch.

Investors are increasingly pricing in the possibility of a recession. More, there are concerns that the Fed will have to choose between addressing inflation and ensuring financial stability.

Goldman Sachs (GS) executives are surprised at the recent big market moves, blaming them on liquidity issues. Chris Rubner, who is co-head of Americas institutional sales, noted that even experienced traders were struggling to navigate the volatile market conditions. Traders are citing that a lack of liquidity is causing prices to move sharply and unexpectedly.

Global markets have experienced significant volatility as of recent, with tech stocks experiencing a sharp sell-off last week. Inflation and uncertainty about central bank policies continue to worry traders. Goldman warns that the market may continue to be volatile until liquidity improves, which may take some time.

Regional banks across America are experiencing a surge in stock prices as investors bet on a rebounding economy and rising interest rates. Western Alliance Bancorp (WAL), a regional bank based in Arizona, saw its stock price rise by over 10% in one day – an all-time high. Other regional banks, such as UMB Financial (UMBF) and East West Bancorp (EWBC), also saw significant gains in their stock prices.

Analysts have recently suggested that regional banks may be a good investment opportunity for those looking to capitalize on the economic recovery. So, stock prices of these banks are being boosted by expectations that the Fed will raise interest rates in response to higher inflation.

The bullish rationale? Regional banks have been able to weather the pandemic well, and they are now poised to benefit from the growing economy. They’re considered by some to also benefit from a potential increase in mergers and acquisitions activity in the banking industry, as larger banks look to expand their market share.

Market Preview 🎞️

• Friday: US Industrial Production, University of Michigan Sentiment, Eurozone CPI, OECD Publishes Interim Economic Outlook, Russia central bank (CBR) rate decision

• Friday earnings: Xpeng (XPEV) earnings

• Weekend reading: Michael Kao’s Interviews & Panels Substack Directory, Tuttle Capital Management’s Short Cramer (SJIM)

Set a reminder to tune into our next Twitter Spaces March 20th at 4:30PM EST. We’ll be previewing the March FOMC and its macroeconomic implications, featuring a slate of speakers you won’t want to miss.

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

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