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The FED discount window borrowing (provides liquidity and stability to the banking system) reaches an all time high. Even higher than 2008.
Probably nothing.
Prices as of 4 pm EST, 3/17/23
UBS has agreed to buy Credit Suisse in a $3.2 billion all-share deal that represents the first megamerger between systematically important global banks since 2008. About $17.3 billion in additional tier-1 (AT1) bonds will be completely written down.
As a result, the riskiest bonds around the world are falling. Similar tier-1 notes of Deutsche Bank, Unicaja Banco, RBI, and BNP Paribas fell by more than 10 points today in European markets while some similarly classified bonds in Asia posted record drops.
We get the Fed’s interest rate decision on Wednesday. With a 50bps hike now off the table after the collapse of multiple banks, markets are leaning towards a quarter-point raise (61%), but the prospects of a pause remain a real possibility (39%):
The technology sector is losing some big names today. Visa and Mastercard–among the biggest companies in the sector–will be reclassified as financials, while PayPal, Automatic Data Processing, and Fiserv will be joining industrials.
Netflix is gaining momentum after the launch of its ad tier reaches 1 million users. The streaming company saw its user base grow by over 500% in the first month after introducing the new offering and another 50% in the following month.
As it fights to get its $75 billion acquisition of Activision cleared by regulators, Microsoft has plans to launch a new smartphone app store for games. Thanks to the EU’s Digital Market Act, Apple and Google–app store gatekeepers–must open up their platforms to app stores run by other companies (like MSFT).
Previously among the loudest bulls, Goldman Sachs is bringing its forecast for oil prices back down to earth. The Wall Street giant now sees Brent climbing to $94 a barrel over the next 12 months and $97 for the second half of next year, down slightly from its $100 prediction.
Meanwhile, Brent prices dropped to their lowest level since December 2021 last week. With its nearest timespread falling by the most since January on Friday, the market is pointing to oversupply:
Advice: The Biden administration has held several calls with Warren Buffett in recent days to discuss the current crisis as well as the possibility of the billionaire investing in the US regional banking sector.
Flagged: Back in 2019, the Federal Reserve warned Silicon Valley Bank over its risk-management systems (or lack thereof).
Junk: S&P Global has cut First Republic Bank’s credit rating further, to B+ from BB+.
Swap-line: The Fed and five other central banks boosted the frequency of 7-day maturity operations, increasing from weekly to daily to ease strains in global funding markets and mitigate the impact on the supply of loans to households and businesses.
SBNY: The FDIC has sold Signature Bank to Flagstar Bank, which will buy “substantially all” of the troubled bank’s deposits and over a third of its assets.
Tuesday: Existing home sales
Wednesday: Fed interest rate decision
Thursday: Building permits, initial jobless claims, new home sales
Friday: Durable goods, S&P Global Flash PMIs
Prices as of 4 pm EST, 3/17/23
Open interest: As Bitcoin marches past $28,000 for the first time since last summer, open interest has reached $12 billion–a yearly high.
Friendly banks: Despite the recent turmoil, big banks like JPMorgan, Citi, and HSBC have signaled a willingness to bank crypto firms and startups.
Quiet: Whereas the previous week saw over $250 million raised by crypto startups, funding over the past week totaled just $37 million.
Bad bet: Sure, Bitcoin is rallying, but former Coinbase CTO Balaji Srinivasan’s bet that prices will reach $1 million by June 17 seems…unwinnable.
Edge wallet: A crypto wallet is reportedly in the works for Microsoft’s web browser, Edge.
Soccer: US investment group 777 Partners LLC has held talks with multiple parties about raising debt and equity to back its portfolio of football clubs, and is considering a potential investment in Newcastle United FC.
Pathology: Australian Clinical Labs has made an all-stock $1.1 billion bid for rival Healius to create the largest player in the country's struggling pathology industry.
Shipping: Maersk has sold its last major energy asset for $685 million, completing its transformation into a pure transport operator and turning its focus on integrated logistics.
Workforce software: Workforce-management software provide Rippling has raised $500 million at an $11.25 billion valuation.
Cosmetics: Among the suitors competing for a stake in $2 billion Aesop are L’Oreal and Permira.
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