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☆ The top commentators in markets say the bank crisis isn't anywhere close to over.
▼ + stars: | 2023-05-05 | by ( Phil Rosen | ) www.businessinsider.com time to read: +5 min

Today we're looking at what some of Wall Street's top investors and commentators say has to happen to curb the banking tumult. The shuttered bank had disclosed in its first-quarter earnings report that customers pulled over $100 billion of deposits in three-months. But even if the regulator did insure more money, former FDIC chair Jelena McWilliams said Thursday a move like that would only cost banks' customers more. A stock market portfolio created by ChatGPT is outperforming the top UK investment funds. Stock market investors should keep an eye out for five key indicators with volatility set to ramp up through the end of the year.

☆ Here are the 5 key takeaways from this year's Milken Global conference
▼ + stars: | 2023-05-05 | by ( Dakin Campbell | ) www.businessinsider.com time to read: +12 min

The pullback by banks is raising the hopes of those in the private credit industry. Some panelists and others who spoke in the hallways of the event suggested that there was a large-scale handoff from private equity to private credit. Many private-equity firms are scrambling to raise private credit funds to take advantage. "I don't think this is the end of private equity, but the environment certainly favors private credit," he said. And that will show up in lower returns for private credit funds, she said.

☆ DeSantis collects wins as Florida Legislature caps whirlwind session, teeing up possible White House bid
▼ + stars: | 2023-05-05 | by ( Kevin Breuninger | ) www.cnbc.com time to read: +10 min

Florida Governor Ron DeSantis speaks during a conference titled "Celebrate the Faces of Israel" at Jerusalem's Museum of Tolerance, on April 27, 2023. Measures like the restrictive abortion law DeSantis signed could help him in a GOP primary, but may reduce his appeal in a general election. Lawmakers have also passed multiple measures that could help clear DeSantis' path to the White House, if and when he decides to run. "The entire session was focused on Governor DeSantis' run for president," said Jim Clark, a University of Central Florida senior lecturer and political commentator, in an interview. On top of those issues, DeSantis in March waded into the "school choice" debate by signing a bill expanding Florida's school voucher system.

☆ Regional bank stocks could be a market afterthought in the week ahead
▼ + stars: | 2023-05-05 | by ( Scott Schnipper | ) www.cnbc.com time to read: +7 min

For the immediate economic and earnings and growth outlook, it almost seems irrelevant whether regional bank stocks rally, steady or sell off more next week. Regional banks were top of mind for investors this past week, as First Republic failed , the SPDR S & P Regional Banking ETF tumbled more than 10% — twice the five-day loss in the S & P 500 Energy Index, the hardest hit S & P sector — and lenders such as PacWest Bancorp and Western Alliance Bancorp lost billions in market value. And, for all that, the S & P 500 only fell about 0.75% this week. Now the conventional wisdom on Wall Street is that regardless of how the regional bank stocks trade, it's a given that bank lending officers are going to pull in their horns and risk management desks will grow more risk averse. But stocks still face a host of issues, none of which are going away next week.

☆ Take Five: Sell in May?
▼ + stars: | 2023-05-05 | by ( ) www.reuters.com time to read: +5 min

The services component of the price data can gauge demand, but consumer and producer price data broadly paint a picture of deflation. April inflation data is out Thursday. At 10.1%, UK inflation is the highest in Western Europe. Reuters Graphics Reuters Graphics4/ SELL IN MAYConventional wisdom has it that May is the ideal point to take profit on equities and lay low until later in the year. "Sell in May and go away" is based on the premise that the best six-month period of the year for stock market returns is November to April, while the leanest is May to October.

☆ U.S. bankers urge SEC to probe short sales, reduce 'abusive' trading
▼ + stars: | 2023-05-05 | by ( Andrea Shalal | ) www.reuters.com time to read: +3 min

"We urge the SEC to consider all its existing tools and to take measures to reduce the avenues for abusive trading practices and restore investor confidence," the group said. "These measures include, at a minimum, a clear message and appropriate enforcement actions against market manipulation and other abusive short selling practices." Short sellers raked in $378.9 million in paper profits on Thursday alone from betting against certain regional banks, according to analytics firm Ortex. ABA President and CEO Rob Nichols told Gensler that short selling could be a legitimate financial tool, but his group was "unalterably opposed to short selling practices that distort the markets through manipulation and abuse." He called on Gensler to send a clear message to market players and take appropriate enforcement action against market manipulation and other abusive short selling practices.

☆ Shares rise, dollar weakens on bank sector fears
▼ + stars: | 2023-05-05 | by ( Ankur Banerjee | ) www.reuters.com time to read: +4 min

SINGAPORE, May 5 (Reuters) - Asian stocks rose, the dollar eased and gold hovered around its record highs on Friday, as jittery investors remained nervous about the U.S. banking sector following another rout in shares of regional lenders. Wall Street ended lower on Thursday after Los Angeles-based PacWest Bancorp's (PACW.O) move to explore strategic options deepened fears about the health of U.S. lenders as pressure grows on regulators to take more steps to shore up the country's banking sector. Shares of U.S. regional banks sank this week in the wake of the collapse of First Republic Bank over the weekend that has brought back fears of a financial sector crisis. The Federal Reserve on Wednesday raised interest rates by 25 basis points, but hinted that its marathon hiking cycle may be ending. China shares (.SSEC) rose 0.21%, while Hong Kong's Hang Seng index (.HSI) was up 0.6%, helping lift the region's shares.

☆ Apple and fintechs like Robinhood chase yield-hungry depositors as Fed rate hikes continue
▼ + stars: | 2023-05-05 | by ( Rohan Goswami | In Rohangoswamicnbc | ) www.cnbc.com time to read: +9 min

Last month, the iPhone maker launched its Apple Card savings account with a generous 4.15% APY in partnership with Wall Street giant Goldman Sachs . "It's really a trade-off for consumers, between safety or the appearance of safety, and yield," Laplanche told CNBC. Still, the emerging group of high-yield savings products are much more mainstream than what the crypto platforms were promoting. SoFi launched its high-yield savings account in February of last year. In its annual SEC filing, the company said that offering checking and high-yield savings accounts provided "more daily interactions with our members."

☆ PacWest and Other Regional Bank Stocks Soar in Early Trading
▼ + stars: | 2023-05-05 | by ( ) www.wsj.com time to read: 1 min

Shares of under-fire regional banks recovered some of their lost ground in early trading Friday, though they were still on track to end the week nursing hefty losses. Bankers and government officials hoped the sale of First Republic Bank to JPMorgan Chase would draw a line under the crisis that began with the collapse of Silicon Valley Bank.

☆ PacWest and Other Regional Bank Stocks Rise Premarket
▼ + stars: | 2023-05-05 | by ( ) www.wsj.com time to read: 1 min

Shares of under-fire regional banks recovered a little lost ground in premarket trading Friday, though they were still on track to end the week nursing hefty losses. Bankers and government officials hoped the sale of First Republic Bank to JPMorgan Chase would draw a line under the crisis that began with the collapse of Silicon Valley Bank.

☆ Berkshire Hathaway's annual meeting is here: What to expect from Warren Buffett and Charlie Munger
▼ + stars: | 2023-05-05 | by ( Yun Li | ) www.cnbc.com time to read: +7 min

Warren Buffett is set to kick off Berkshire Hathaway 's annual shareholder meeting Saturday before tens of thousands of adoring shareholders. Berkshire's annual "Woodstock for Capitalists" will be held in Omaha, Nebraska, the second straight in-person gathering after two virtual meetings during the pandemic. The question of Buffett's Activision stake is expected to come up at the annual meeting. Geico Berkshire shareholders will also be eager to learn more about what's next for auto insurer Geico , the crown jewel of Berkshire's insurance empire and Buffett's "favorite child." ESG issues There are a few ESG-related shareholder proposals being put to a vote at the annual meeting, including requiring Berkshire to publish an annual assessment of climate-related risks and publish data on its workforce composition by gender, race, and ethnicity.

☆ Premarket stocks: This is how the banking crisis ends
▼ + stars: | 2023-05-05 | by ( Julia Horowitz | ) edition.cnn.com time to read: +7 min

London CNN —US regional bank stocks look set to rebound Friday but are still down sharply this week, accentuating fears that federal regulators have not yet contained a crisis in the sector that could shake the financial system. Breaking it down: Wall Street is on the hunt for any signs of vulnerability in the banking system after the high-profile demise of Silicon Valley Bank, Signature Bank and First Republic Bank in a matter of weeks. While authorities stepped in to protect depositors at those banks, investors were left with stocks that were suddenly worthless. “I believe it really only ends after we get some type of government intervention,” Michaud told me. The value of short positions in regional bank stocks reached $15.1 billion in mid-April, up from about $13.7 billion one year ago, according to data from S3 Partners.

☆ Banks ask SEC to stop short-seller attacks on their stocks driven by social-media speculation
▼ + stars: | 2023-05-05 | by ( Ryan Hogg | ) www.businessinsider.com time to read: +3 min

A leading banking group called for the SEC to do more to stop speculative short selling in bank stocks. The American Banking Section said social-media speculation about banks was disconnected from their financial reality. "ABA is, however, unalterably opposed to short selling practices that distort the markets through manipulation and abuse," he said. Nichols called for the SEC to take a clearer stance against what he called market manipulation and abusive short selling practices. "The harm caused by short selling that runs counter to economic fundamentals ultimately falls on small investors, who see value destroyed by others' predatory behavior."

☆ Banking 'cancer' may be spreading as otherwise healthy firms seem vulnerable and credit gets pulled from the economy, Mohamed El-Erian says
▼ + stars: | 2023-05-05 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Banking sector "cancer" is starting to spread, Mohamed El-Erian said. Other regional lenders have shown signs of weakness after First Republic Bank failed this week. Widespread contagion would turn the banking situation into a true crisis, El-Erian warned. "The cancer within them is starting to spread, and we've got to keep an eye on that," he added. Credit conditions are also beginning to tighten, and the risks of further contraction go up as banking contagion spreads.

The latest case in point: The Federal Deposit Insurance Corp (FDIC) chose JPMorgan Chase & Co (JPM.N) as the winning bidder in an auction to buy collapsed lender First Republic Bank on Monday. FDIC officials, however, say would-be buyers risk losing out if they allow the value of an acquisition target to deteriorate over time while waiting for an FDIC receivership. SWEETENERSU.S. bank mergers were already sluggish as interest rates rose and recession loomed, analysts at Raymond James wrote in an Apr. The first quarter was the quietest opening to a year for bank deals in a generation, they said. Market volatility stops bank buyers from pulling together enough money to cover writedowns on struggling assets, which would be triggered by a traditional acquisition, said David Sandler, co-head of financial services investment banking at Piper Sandler Companies (PIPR.N).

☆ Stocks Rally to Cap Tumultuous Week
▼ + stars: | 2023-05-05 | by ( Jack Pitcher | ) www.wsj.com time to read: 1 min

Shares of online used-car seller Carvana surged after it posted results. Photo: Brandon Bell/Getty ImagesStocks ripped higher Friday on the back of an upbeat jobs report, capping a tumultuous week that saw regional bank stocks buckle even after JPMorgan Chase swooped in to buy failing First Republic Bank and the Federal Reserve chairman said the banking system was sound. Risk appetite returned after Apple , the largest U.S. company by market value, reported first-quarter results that exceeded analyst expectations after the closing bell Thursday. Apple shares rallied 4.7%, helping to snap the S&P 500’s four-day losing streak.

☆ How the April Jobs Report Could Change Inflation and Recession Fears
▼ + stars: | 2023-05-05 | by ( Dion Rabouin | ) www.wsj.com time to read: 1 min

E63First Republic’s Failure and What to Watch This Week What’s next as First Republic Bank is sold to JPMorgan? Also, the Fed meets two days before the latest U.S. nonfarm payrolls report and right in the middle of a slew of earnings reports. WSJ's Dion Rabouin explains. Photo: Brendan McDermid/Reuters

☆ The stock market could become 'untouchable' if the regional banking crisis continues to spiral, Fundstrat says
▼ + stars: | 2023-05-05 | by ( Matthew Fox | ) www.businessinsider.com time to read: +3 min

The stock market could become "untouchable" if the regional banking crisis continues to spiral out of control. "This raises too many tail risk issues including credit tightening, commercial real estate, and wide economic implications," Lee said. Lee's cause for concern about the banking crisis and the chilling effect it could have on the stock market is based on the type of risks that could percolate if the instability continues. "This raises too many tail risk issues including credit tightening, commercial real estate and wide economic implications," Lee explained. The SPDR S&P Regional Banking ETF surged more than 6% on Friday, suggesting that the regional banking crisis could ultimately be contained without spilling over into a bigger problem for the stock market.

☆ Mario Gabelli, John Rogers, and 3 other Warren Buffett experts just weighed in on the banking turmoil, pressure on house prices, and some of the investor's biggest bets. Here are their 10 best quotes.
▼ + stars: | 2023-05-05 | by ( Theron Mohamed | ) www.businessinsider.com time to read: +4 min

Five experts on Warren Buffett's Berkshire Hathaway spoke ahead of this year's annual meeting. Mario Gabelli, John Rogers, Chris Bloomstran, Adam Mead, and Todd Finkle discussed the conglomerate. Todd Finkle, the author of "Warren Buffett: Investor and Entrepreneur," emphasized the unique nature of Berkshire's yearly gathering, which attracts tens of thousands of people from around the world. Meanwhile, Adam Mead, the author of "The Complete Financial History of Berkshire Hathaway," touted the underlying value of Berkshire Hathaway Energy, and the savvy structure of Buffett's conglomerate. "Berkshire Hathaway Energy is going to become a powerhouse over the next decade.

☆ Regional bank stocks rebound on Friday, but still headed for steep losses on the week
▼ + stars: | 2023-05-05 | by ( Jesse Pound | In Jesse-Pound | ) www.cnbc.com time to read: +2 min

Regional bank stocks were poised to bounce back on Friday, but the beaten down sector was still on track for steep losses for the week after the failure of First Republic. PacWest entered down more than 68% for the week and closed at just $3.17 per share on Thursday. Analysts at JPMorgan Chase upgraded Western Alliance, Zions and Comerica to overweight on Friday, saying the bank stocks "appear substantially mispriced to us." Many on Wall Street are looking to Washington for regulatory changes to calm the banking system, such as potentially expanding deposit insurance rules. Some have raised the possibility of temporarily banning short-selling on bank stocks.

☆ Short sellers pocketed nearly $400 million in a single day from the regional bank stock sell-off
▼ + stars: | 2023-05-05 | by ( Ryan Hogg | ) www.businessinsider.com time to read: +2 min

Short sellers made $378.9 million in just one day betting against embattled regional banks, data show. Such traders have been selling borrowed bank stocks before buying them back at lower levels once their price falls. Traders profited as fresh turmoil embroiled regional banks this week following First Republic's failure and its takeover by JPMorgan. According to ORTEX, short sellers have made $816 million from the three bank stocks since the start of the year. Last month, ORTEX reported that short bets against Canada's Toronto-Dominion had swollen to $6.1 billion, having become the world's most shorted bank in early April.

☆ Fed's Goolsbee: 'way too premature' to expect June rate hike
▼ + stars: | 2023-05-05 | by ( ) www.reuters.com time to read: +1 min

"We know that credit conditions like the ones we are seeing now in the past have been correlated with recessions, credit crunches," Goolsbee told Fox News. "It's way too premature to know what to do with monetary policy." Goolsbee voted with all other Fed policymakers on Wednesday to raise the Fed's policy rate by a quarter point to 5.00%-5.25%. Goolsbee on Friday said he is paying particular attention to credit conditions, given the recent failure of First Republic Bank and the troubles of other regional banks. "It has to give you some pause" about raising rates, he said, because tighter credit conditions are likely to slow the economy.

☆ FDIC mulls loss-sharing with nonbanks to boost bids on failed lenders, Bloomberg reports
▼ + stars: | 2023-05-05 | by ( ) www.reuters.com time to read: +1 min

May 5 (Reuters) - The U.S. Federal Deposit Insurance Corp (FDIC) is mulling whether to offer loss-sharing agreements to private equity firms and other nonbanks that buy parts of failed lenders, after it was left holding a large portfolio of Signature Bank loans following its collapse, Bloomberg News reported on Friday. Since the FDIC does not regulate nonbanks, the firms cannot bid for an entire lender but such a move could entice them to buy loans and assets at a discount from collapsed institutions and help the FDIC get higher bids, the report said. The FDIC did not immediately respond to a Reuters request for comment. Earlier this week, JPMorgan (JPM.N) entered into a loss-sharing agreement with the FDIC when it agreed to assume all of First Republic's deposits but share losses on certain portfolios including residential and commercial loans. Reporting by Juby Babu in BengaluruOur Standards: The Thomson Reuters Trust Principles.

☆ First Republic Bank executives' trading probed by SEC investigators - Bloomberg News
▼ + stars: | 2023-05-05 | by ( ) www.reuters.com time to read: +1 min

May 5 (Reuters) - The U.S. Securities and Exchange Commission is investigating the conduct of First Republic Bank executives before the government seizure and sale to JPMorgan Chase & Co (JPM.N), Bloomberg News reported on Friday, citing people familiar with the matter. The SEC is looking into whether any members of the then-executive team of First Republic improperly traded on inside information, according to the report. Senator Elizabeth Warren accused First Republic executives of "mismanagement" in a letter to its former CEO Micahel Roffler and raised questions on the failed lender's risk management as well as pay and bonuses. Regulators seized troubled First Republic Bank and JPMorgan agreed to buy majority of its assets earlier this week, marking the largest U.S. bank failure since the 2008 financial crisis. JPMorgan declined to comment, while First Republic and SEC did not immediately respond to Reuters' requests for comment.

JPMorgan made a bold call on Friday, upgrading three regional banks despite a renewed rout in the sector this week that the investment bank says is partly due to short sellers. "To this end, we believe a sell-off in regional banks has become a catalyst itself to cause further fear and selling pressure." The SPDR S & P Regional Banking ETF , down 15% through Thursday this week, was up 4% in premarket trading Friday. The banks that JPMorgan upgraded have been hit even harder than the broader sector. The regional bank stocks have fallen despite the fact that the companies reported lower deposit outflows than First Republic.

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