Advertisement
New Zealand markets open in 3 hours 46 minutes
  • NZX 50

    11,783.39
    -26.11 (-0.22%)
     
  • NZD/USD

    0.6124
    +0.0022 (+0.36%)
     
  • ALL ORDS

    7,999.20
    -83.90 (-1.04%)
     
  • OIL

    77.80
    +0.93 (+1.21%)
     
  • GOLD

    2,335.20
    -2.00 (-0.09%)
     

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

Today's newsletter is by Brian Sozzi, executive editor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Read this and more market news on the go with the Yahoo Finance App.

No doubt Treasury Secretary Janet Yellen, Federal Reserve chair Jerome Powell and every single person remotely tied to the financial services field could use a drink (or five) after one crazy week in the world of business.

Long-troubled Credit Suisse (CS) tapped $54 billion from the Swiss government. Fast-melting First Republic (FRC) scored a $30 billion uninsured deposit injection by 11 rival banks. Silicon Valley Bank (SIVB) assets are still being shopped by the FDIC after its collapse a week ago.

Banking sources have told the Yahoo Finance newsroom more bank busts could be in the cards. The KBW Bank ETF is now down 29% for the month.

ADVERTISEMENT

And yet, analysts still love financial stocks!

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

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

ZURICH, SWITZERLAND - MARCH 16: The logo of Swiss bank Credit Suisse is seen the day after its shares dropped approximately 30%, on March 16, 2023 at its Oerlikon office building in Zurich, Switzerland. Credit Suisse has reportedly asked the Swiss government for support following the refusal of a Saudi backer to provide any more money. The sharp drop in share price sent shares of other major European banks down. The disruption is coming on the heels of the failure of Silicon Valley Bank in the USA. (Photo by Arnd Wiegmann/Getty Images)
The logo of Swiss bank Credit Suisse is seen the day after its shares dropped approximately 30%, on March 16, 2023, at its Oerlikon office building in Zurich, Switzerland. (Photo by Arnd Wiegmann/Getty Images) (Arnd Wiegmann via Getty Images)

1. A Credit Suisse buyer?

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

"We see a resolution scenario as most unlikely in our view and more likely an intervention with the 3rd option of a takeover as the most likely scenario, especially by UBS," the analyst said.

Just what UBS needs inside of a banking crisis — to assume the assets and culture of a deeply troubled rival.

2. First Republic downgrade

Wedbush analyst David Chiaverini slashed his rating on First Republic to Neutral from Outperform and sees the stock crashing to $5. First Republic stock changed hands at $25 as of Friday afternoon.

"We believe a distressed M&A sale could result in minimal, if any, residual value to common equity holders owing to FRC's significant negative tangible book value after taking into account fair value marks on its loans and securities," Chiaverini said. "We note that an M&A target's assets must be marked to fair value in an acquisition." Brutal.

3. Kellogg CEO sees no changes from ending food stamp benefits

Kellogg CEO Steve Cahillane told me (video above) he doesn't see people spending less because pandemic emergency food stamp payments ended earlier this month. Those checks put an extra $95 a month into the hands of lower-income consumers.

4. FedEx layoffs

FedEx execs casually slipped into their earnings call, almost giddily, that they were axing jobs in order to finally deliver better profits to investors. “By the end of this fiscal year, we expect U.S. headcount to be down roughly 25,000 year-over-year," execs said.

5. Fed rate cut call

The future favors the bold. To that end, Nomura strategist Aichi Amemiya was the first on the Street to drop a rate cut call ahead of the Fed's policy meeting next. His view: "In reaction to looming financial stability risks, we now expect the Fed to cut rates in 25bp increments in the March FOMC meeting in comparison to where we had previously expected a 50bp rate hike since 24 February."

6. Lawmakers eye banking rules

Rep. Maxine Waters (D-CA), the top Democrat on the House Financial Services Committee, came out swinging against the banks in a chat with Yahoo Finance's Jennifer Schonberger. "This is all about regulation, and this is all about the fact that at some point in time, there was great advocacy for making sure that the regional banks and smaller banks didn't have to comply with some of the rules that perhaps would not have allowed them to get into [this situation]," Waters said on Yahoo Finance Live. The read: The return of tighter banker regulation lurks.

7. Banks to the rescue

Curious about how the $30 billion deal for First Republic came to fruition? The Yahoo Finance team of Dan Fitzpatrick and David Hollerith has you covered.

Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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

Read the latest financial and business news from Yahoo Finance