We finally broke something

MONDAY MARKET UPDATE

Always Zerify. If there are two industries that have gone bonkers since 2020, it’s cyber security and video conferencing. While video conferencing is set to crack $60 billion by 2026, most providers remain unsecure, and users are unprotected. Enter Zerify, the only game in town that enables truly secure video conferencing.*

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Good Morning Everyone!

If Silicon Valley Bank, a top 20 U.S. bank, can blow-up and get bailed out in less than 72 hours, you can invest in the stock market every month.

Prices as of 4 pm EST, 3/10/23; % YTD

MARKET UPDATE

Silicon Valley Bank (SVB) SIVB 0.00%↑

• Federal Reserve steps in

• Start-Ups are safe: this will protect the intellectual future of U.S. technology

• Guaranteeing all deposits of SVB so that Start-Ups can make payroll today

• The governments bank-deposit insurance fund will cover all deposits at the two banks rather than the standard $250,000

Signature Bank

• Regulators have also taken control of Signature Bank (a crypto-currency bank).

• Joins another failed crypto bank, Silvergate Capital Corp.

Not a bailout

• Regulators said these measures are not a bailout because stock and bondholders in SVB and Signature won’t be protected.

• Regulators will use emergency-lending to make more funds available to prevent runs on other banks.

First Republic Bank (FRC)

• Shares have fallen 30% since Wednesday, down 60% in pre-market

• Caters to wealthy clients with big deposit balances in excess of the FDIC insurance cap.

• FRC said Sunday it had shored up finances with additional funding from the Fed and JP Morgan

Silicon Bank’s British Arm

• Being acquired by HSBC for one-British pound

• This will keep it operating and protect Start-Ups

• Likely, a new regulatory framework for all regional banks

SBV and Signature are the casualties of the Fed’s campaign to bring down inflation

• The Central Bank has raised interest rates by 4.5% over the past year

• The most rapid run-up since the 1980s

What are markets doing as a result of Silicon Valley and Signature Bank

• Recessionary Trade has taken over from the Inflationary Trade

• Investors have piled into the safety of bonds

• U.S. 2-year bond yield has moved from 5% to 4%

• 10-year bond has moved from 4% to 3.4%

• Most commodities have fallen

• Only a 72% probability of a 25 point-hike at the next Fed meeting on March 22.

• One week ago there was a 80% probability of a 50 point-hike.

2-year yield

10-year yield

Macro this week

• Tuesday               CPI

• Wednesday        PPI

• Thursday             jobless claims

Crude    73     -5%

• After Friday’s announcement of a resumption of diplomatic relations with Saudi Arabia

• Iran’s spokesman for its Foreign Ministry said:

  • The nation welcomes any diplomatic effort to improve its relations with its Gulf neighbors and other countries in the Middle East including Egypt and Bahrain.

PFE 0.00%↑ Pfizer

• Will acquire Seagen, total enterprise value of $43 billion

• Bolsters Pfizer’s presence in cancer

META 0.00%↑ Meta     +2%

• Planning additional layoffs

• Same magnitude as the 13% cut to its workforce last year

• Who’s next? GOOGL 0.00%↑ and AMZN 0.00%↑ ?

Earnings               None

AGRICULTURAL GAME-CHANGER. Over 50% of the world’s food supply relies on ammonia-based fertilizer. In fact, ammonia-treated crops like corn and wheat can experience greater yields. The problem? While ammonia itself is carbon-free, the traditional manufacturing process for producing it emits CO2 gases at every step of the supply chain. The solution? AmmPower is decarbonizing the ammonia market with self-contained, modular units that produce ammonia fertilizer from only water, air, and green power. Hitting the markets in summer 2023, the IAAM Unit (Independent Ammonia Making Machine) is poised to change the way farmers get their fertilizers by bringing production closer to them, or even on-site. That means no dependence on volatile O&G prices, no seasonal availability snags or supply chain snarls, and—most importantly—a reduction or outright elimination of upstream CO2 emissions. AmmPower containerizes an electrolysis system with the Haber-Bosch process and its own secret sauce (proprietary reactor technology) to break water into its constituent hydrogen and oxygen atoms and add nitrogen from the atmosphere to synthesize 4 metric tons of ammonia per day! With a modular, stackable, and scalable design, the IAMM Unit is decentralizing production and shortening the ammonia supply chain. Learn more here*!

*This is sponsored advertising content and the disclaimer at the bottom of this email MUST be read carefully.

CRYPTO UPDATE

USDC de-pegged

• USDC stablecoin fell as low as 0.87 over the weekend

  • Has since bounced back toward 1.00 peg

• Circle (issuer) admitted $3.3 billion exposure to SVB

  • No exposure to Silvergate

Crypto prices rebound over weekend:

Under the Radar

VERTICALLY INTEGRATED HELIUM PRODUCER. With prices at historic highs and dwindling reserves threatening supply, helium—whose countless industrial applications make it critical to global economies—is a hot commodity! Desert Mountain Energy is positioning itself to capitalize on this secular trend with plans to build North America's first vertically integrated, primary producer of helium.

*This is sponsored advertising content and the disclaimer at the bottom of this email MUST be read carefully.

MEME OF THE DAY

Genevieve Roch-Decter, CFA @GRDecter

Silicon Valley Bank's risk management department

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