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☆ Deutsche Bank is too big to fail — we think management has a good handle on it, says Marathon's Bruce Richards
▼ + stars: | 2023-03-24 | by ( ) www.cnbc.com time to read: 1 min

In this videoShare Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailDeutsche Bank is too big to fail — we think management has a good handle on it, says Marathon's Bruce RichardsBruce Richards, Marathon Asset Management, joins 'Squawk on the Street' to discuss European bank debt even as Deutsche Bank rattles the financial sector.

☆ European banks face renewed selling pressure
▼ + stars: | 2023-03-24 | by ( ) www.reuters.com time to read: +8 min

So people are acting with their feet and continuing to sell bank stocks. ING ECONOMICS TEAM (emailed) "Most European banks are impacted by these events mainly via the more cautious market sentiment. "It seems like post what happened to Credit Suisse last weekend, two things might be at play here. “European banks probably suffered from contagion from what was going on in the US, where the regional banks seem to be under pressure in the rising rate environment. European banks have, in fact, had no fundamental issues whatsoever.

☆ Wall Street shakes off early losses — listen to the 'Homestretch'
▼ + stars: | 2023-03-24 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWall Street shakes off early losses after European markets closeJim Cramer on Friday discussed fresh concerns over the health of Deutsche Bank and the impact on Wall Street trading. He also explained his latest thinking on Club holdings Morgan Stanley (MS), Costco (COST) and more.

☆ Short sellers make $100 mln betting against Deutsche Bank in two weeks-Ortex
▼ + stars: | 2023-03-24 | by ( ) www.reuters.com time to read: 1 min

LONDON, March 24 (Reuters) - Short sellers have made a profit of over $100 million on paper betting against Deutsche Bank stock over the last two weeks, financial data company Ortex said on Friday. Ortex said short interest in Deutsche Bank's (DBKGn.DE) European and U.S.-listed shares has doubled over that period to $360 million. Deutsche's German shares were last down 10% to 8.4 euros ($9.03) on Friday as ongoing fears about the health of global banks knocked confidence in Germany's biggest bank. They've lost 24% in value in the past two weeks. ($1 = 0.9298 euros)Reporting by Harry Robertson; Editing by Amanda CooperOur Standards: The Thomson Reuters Trust Principles.

☆ Key US bond yields drop to their lowest in 6 months as global banking worries boost bets the Fed is heading toward a rate cut
▼ + stars: | 2023-03-24 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

Odds of a pause in rate hikes in May soared to 90% and investors are pricing in potential for a June rate cut. The 2-year yield dropped to 3.59% and sharp moves of 20 basis points have "become the norm," said one investment firm. The 2-year Treasury yield, which is highly sensitive to views on US monetary policy, sank 22 basis points to 3.598%, hitting levels not seen since mid-September. Bets that the Fed will pause rate hikes then turn to cutting rates this summer jumped Friday. It opted to raise rates by 25 basis points to signal its commitment to lowering inflation to its 2% target.

The index of top European banks (.SX7P) was down 1% in early trading, with German banking giants Deutsche Bank (DBKGn.DE) and Commerzbank (CBKG.DE) both falling 0.8%. The rescue of Credit Suisse, which followed the collapses of California-based Silicon Valley Bank (SVB) (SIVB.O) and New York-based Signature Bank (SBNY.O) ignited broader concerns about investors' exposure to a fragile banking sector. The decision to prioritise shareholders over Additional Tier 1 (AT1) bondholders rattled the $275 billion AT1 bond market and some Credit Suisse AT1 bondholders are seeking legal advice. "The AT1 instruments issued by Credit Suisse contractually provide that they will be completely written down in a 'viability event', in particular if extraordinary government support is granted," FINMA said. However, some watchers think the banking system is more vulnerable to rumour and rapid moves in an era of widespread social media use, posing a challenge for regulators trying to tamp down instability.

☆ Analysis-Investors cautious on U.S. stocks, even though Fed hikes may soon end
▼ + stars: | 2023-03-23 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +5 min

Stocks fell on Wednesday, with the benchmark S&P 500 closing down 1.65% after swinging between gains and losses during Fed Chairman Jerome Powell’s press conference following the meeting. Futures markets are now pricing a Fed funds rate of around 4.25% by year-end, compared with the range of 4.75% to 5% that took effect on Wednesday. A drop in Treasury yields from recent highs has also given a tailwind to stocks, especially to big tech and growth names that are heavily weighted in the S&P 500. Corporate profits are another potential trouble spot, with S&P 500 earnings expected to post year-over-year declines in the first and second quarters after falling 3.2% in the fourth quarter of 2022, according to Refinitiv IBES. “I don’t think the market is going off to the races,” said James Ragan, director of wealth management research at D.A.

☆ Credit Suisse hires Southeast Asia wealth vice chairman
▼ + stars: | 2023-03-23 | by ( ) www.reuters.com time to read: +1 min

Sydney, March 23 (Reuters) - Credit Suisse (CSGN.S) said on Thursday it has hired private banker Kwong Kin Mun as its new vice chairman for Southeast Asia wealth management. Swiss regulators said it was necessary authorities took action as there was a risk Credit Suisse could have become "illiquid, even if it remained solvent" after a tumultuous period in which the share price tanked and deposits fell sharply. In a statement from the investment bank, Kwong said "the sparks from the merger of two global leaders in wealth management will create enormous potential for clients and private bankers." The UBS takeover is likely to result in major job cuts at Credit Suisse and the Swiss Bank Employees Association said on Monday staff reductions should be kept to a minimum. ($1 = 0.9169 Swiss francs)Reporting by Scott Murdoch in Sydney; Editing by Jacqueline WongOur Standards: The Thomson Reuters Trust Principles.

☆ Analysis: Investors cautious on U.S. stocks, even though Fed hikes may soon end
▼ + stars: | 2023-03-23 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +5 min

Stocks fell on Wednesday, with the benchmark S&P 500 (.SPX) closing down 1.65% after swinging between gains and losses during Fed Chairman Jerome Powell's press conference following the meeting. Futures markets are now pricing a Fed funds rate of around 4.25% by year-end, compared with the range of 4.75% to 5% that took effect on Wednesday. US stock market during the Fed's hiking cycleUNCERTAIN OUTLOOKStocks have been resilient this year in the face of uncertainty, with the S&P 500 up 2.5% since the end of 2022. A drop in Treasury yields from recent highs has also given a tailwind to stocks, especially to big tech and growth names that are heavily weighted in the S&P 500. Corporate profits are another potential trouble spot, with S&P 500 earnings expected to post year-over-year declines in the first and second quarters after falling 3.2% in the fourth quarter of 2022, according to Refinitiv IBES.

As the image shows, on an earnings before interest and tax (EBIT) basis, Ford Model e had a profit margin of roughly negative 40% in 2022. Ford Motor disclosed on Thursday that its electric vehicle unit, called Ford Model e, lost $2.1 billion in 2022 — and could lose as much as $3 billion in 2023. Here, step by step, is how Lawler said Ford expects Model e to get to a positive 8% EBIT profit margin in under four years:Scale. Ford expects to have the capacity to build EVs at a rate of 2 million per year by the end of 2026. Ford expects to have the capacity to build EVs at a rate of 2 million per year by the end of 2026.

☆ Here are Thursday's biggest analyst calls: Tesla, First Republic, Coinbase, Boeing, Pinterest & more
▼ + stars: | 2023-03-23 | by ( Michael Bloom | ) www.cnbc.com time to read: +7 min

Here are Thursday's biggest calls on Wall Street: Morgan Stanley reiterates Tesla as overweight Morgan Stanley said Tesla could eventually be a solution to vehicle affordability. Truist upgrades BellRing Brands to buy from hold Truist said the time is right to buy shares of the food products company. Citi moves First Republic to an under review rating Citi moved to an under review rating on First Republic due to too much uncertainty. Piper Sandler reiterates Meta and Pinterest as top picks Piper said it's standing by shares of Meta and Pinterest. Oppenheimer downgrades Coinbase to perform from outperform Oppenheimer said it sees an "unhealthy regulatory climate" for Coinbase.

☆ Wall Street sees the Fed starting to signal toward a recession ahead
▼ + stars: | 2023-03-23 | by ( Jeff Cox | ) www.cnbc.com time to read: +4 min

The Wall Street consensus after the Federal Open Market Committee meeting concluded Wednesday was equally cautious. "We took the broad signals from this meeting as lifting perceptions of recession risks within the Fed," wrote Matthew Luzzetti, chief U.S. economist at Deutsche Bank. "Powell noted that recent events will certainly not reduce recession risks, even if how much they heighten those risks remains uncertain." The risk from rates Worries remain that more Fed rate hikes will exacerbate banking problems by creating more duration risk. "We expect the FOMC to hike another 25bp in May, bringing the funds rate target range to 5.00-5.25%," wrote Barclays chief U.S. economist Marc Giannoni.

☆ As Fed meeting looms, economists see central bank balance sheet in new light
▼ + stars: | 2023-03-22 | by ( Michael S. Derby | ) www.reuters.com time to read: +6 min

BIG NUMBERSFed numbers showed the speed of the shift to a new balance sheet reality. Fed holdings peaked at just shy of $9 trillion last summer. The details of Fed holdings matters greatly in terms of understanding Fed balance sheet dynamics, analysts say. Benson Durham, head of global policy at Piper Sandler, said the key is the composition and not the size of Fed holdings. One factor limiting economists’ interpretation of the balance sheet surge is the fluidity of the factors now driving it.

LONDON, March 21 (Reuters) - Distressed debt investors and large hedge funds are buying up Credit Suisse (CSGN.S) additional tier-1 bonds at rock-bottom prices after they were written down to zero in the Swiss bank's rescue by cross-town rival UBS (UBSG.S). AT1 bonds issued by other European banks tumbled on Monday as the treatment of Credit Suisse AT1 bondholders highlighted the risks of this type of debt. Buyers have included a mixture of hedge funds and deep distressed debt funds, which Southey expected would need to hold the bonds for an extended period before they paid off. Some of those buyers intend to join groups that would litigate to improve odds on cashing in on the bonds, Southey said. "It's quite possible that we will see demand from buyers of subordinated bank debt to have more explicit protections written into these bond prospectuses in the future."

☆ 'A tough stock not to own.' Wall Street endorses Club name Nvidia, as it dominates AI
▼ + stars: | 2023-03-22 | by ( Zev Fima | ) www.cnbc.com time to read: +9 min

Of 15 bank notes surveyed this week, 13 firms have a buy rating or equivalent on Nvidia, citing its AI capabilities. But, longer term, Nvidia's AI applications portend significant upside for the stock in the years to come. Raymond James Reiterated a strong buy rating – one level above buy — and price target of $290 per share. UBS The bank said its buy rating and $270-per-share price target are "under review pending further analysis." That's why the commentary in an analyst note or in a Club story is more relevant than any rating or price target.

☆ Jeffrey Epstein: JPMorgan, Deutsche Bank ordered to face lawsuits over ties to financier
▼ + stars: | 2023-03-21 | by ( ) edition.cnn.com time to read: +4 min

JPMorgan Chase and Deutsche Bank must face lawsuits that accuse them of enabling Jeffrey Epstein’s sex trafficking, a US judge said Monday. Rakoff’s decision gives the plaintiffs a chance to prove another claim: that JPMorgan and Deutsche Bank (DB)knowingly benefited from involvement in Epstein’s sex trafficking. JPMorgan spokeswoman Trish Wexler and Deutsche Bank spokesman Dylan Riddle declined to comment on Rakoff’s ruling. ‘Landmark decision’Epstein had been a client of JPMorgan from 2000 to 2013, and Deutsche Bank from 2013 to 2018. In the Deutsche Bank case, the plaintiff, also known as Jane Doe 1, said Epstein sexually abused her from 2003 to 2018.

[1/2] A J.P. Morgan logo is seen outside the JPMorgan bank offices in Paris, France, January 27, 2023. REUTERS/Sarah MeyssonnierNEW YORK, March 20 (Reuters) - A U.S. judge said on Monday JPMorgan Chase & Co (JPM.N) and Deutsche Bank AG (DBKGn.DE) must face lawsuits accusing them of enabling Jeffrey Epstein's sex trafficking. Rakoff's decision gives the plaintiffs a chance to prove that JPMorgan and Deutsche Bank knowingly benefited from involvement in Epstein's sex trafficking. Epstein had been a client of JPMorgan from 2000 to 2013, and Deutsche Bank from 2013 to 2018. The cases in the U.S. District Court, Southern District of New York are: Jane Doe 1 v Deutsche Bank AG et al, No.

[1/2] A J.P. Morgan logo is seen outside the JPMorgan bank offices in Paris, France, January 27, 2023. REUTERS/Sarah MeyssonnierNEW YORK, March 20 (Reuters) - A U.S. judge on Monday said JPMorgan Chase & Co (JPM.N) must face a lawsuit by the U.S. Virgin Islands accusing the bank of enabling the late financier Jeffrey Epstein's sex trafficking. The judge also said JPMorgan and Deutsche Bank AG (DBKGn.DE) must face lawsuits by two women who said Epstein sexually abused them, and who also accused the banks of enabling his sex trafficking. U.S. District Judge Jed Rakoff in Manhattan dismissed some claims in all three lawsuits. Reporting by Jonathan Stempel in New York; Editing by Chizu NomiyamaOur Standards: The Thomson Reuters Trust Principles.

The Credit Suisse rescue has shaken the European banking sector and fears of wider fallout remain. Under the Credit Suisse rescue deal, 16 billion Swiss francs worth of Credit Suisse Additional Tier 1 debt will be written down to zero on the orders of the Swiss regulator. Overall, bank debt remained under pressure, with the cost of insuring exposure to the debt rising in the credit default swaps (CDS) market. CONTAGION RISKThe wipeout of AT1 bonds in the Credit Suisse rescue has alerted fixed income investors to the risks of investing in these instruments. At Credit Suisse, the bank's AT1 bonds were bid as low as 1 cent on the dollar on Monday as investors braced for the wipeout.

☆ Boaz Weinstein's trade looks set to flourish on Credit Suisse demise
▼ + stars: | 2023-03-20 | by ( Nell Mackenzie | ) www.reuters.com time to read: +3 min

[1/2] Boaz Weinstein, founder and chief investment officer at Saba Capital Management, speaks during the SALT conference in Las Vegas, Nevada, U.S. May 17, 2017. REUTERS/Richard BrianLONDON, March 20 (Reuters) - Hedge fund manager Boaz Weinstein pinned hopes on Credit Suisse's survival, but also money on its demise. At the time Weinstein told Reuters he thought the derivatives were mis-priced because he believed Credit Suisse's problems would be resolved, either way, more quickly. As the trade is both long and short, Weinstein stands to profit from the short leg of his trade much more than he will lose from the long side. Weinstein led a proprietary trading fund at Deutsche Bank which was spun out to start Saba Capital Management in 2009.

In a package engineered by Swiss regulators on Sunday, UBS will pay 3 billion Swiss francs ($3.23 billion) for 167-year-old Credit Suisse Group AG (CSGN.S) and assume up to $5.4 billion in losses. Investor focus has now shifted to the massive blow some Credit Suisse bondholders will take, adding to anxiety about other banking sector risks including contagion and the fragile state of U.S. regional lenders. UBS acquiring Credit Suisse for 3 billion francs a week ago would have seemed like a terrific deal. Buildings of Swiss banks UBS and Credit Suisse are seen on the Paradeplatz in Zurich, Switzerland March 20, 2023. QUESTIONS FOR UBSThe deal to buy Credit Suisse will make UBS Switzerland’s only global bank and the Swiss economy more dependent on a single lender.

European bank shares slumped, with an index of leading lenders (.SX7P) down 5.8%. Credit Suisse shares slumped 62%, reflecting the huge loss its shareholders will see in their investment in the bank. Monetary authorities in Singapore and Hong Kong, where Credit Suisse hosts large regional offices, separately said the Swiss bank's business continued without interruption. And Credit Suisse urged its staff to go to work, according to a memo to staff seen by Reuters. Credit Suisse staff arriving to work in Hong Kong and Singapore on Monday morning, however, fretted about retrenchments and retaining business.

Swiss authorities brokering Credit Suisse's (CSGN.S) rescue merger with UBS (UBSG.S) have said 16 billion Swiss francs ($17 billion) of its Additional Tier 1 (AT1) debt will be written down to zero. That puts holders of the AT1 bonds lower in priority than even investors who hold an equity stake in Credit Suisse and can expect to get 0.76 Swiss francs per share. The shock realisation reverberated through Asian markets on Monday as traders hurried to reprice bank debt, and pushed bank stocks down. Asian AT1 bonds were down 4-5 points, while European ones were down 10 points, he said. But you did enter this thing believing that you'd be senior to the equity holders, that's the thing that people are worried about."

Commodity Futures Trading Commission (CFTC) data shows that speculators held the largest ever net short position in three-month SOFR rate futures in the week ending March 7, only a few weeks after amassing a record short position in two-year Treasuries futures. Implied rates then plunged as much as 200 basis points in a week as traders drastically redrew their Fed outlook. Analysts at Deutsche Bank say the huge disconnect between bond and rates volatility over equity volatility recently is partly down to the extreme positioning in fixed income. A short position is essentially a wager that an asset's price will fall, and a long position is a bet it will rise. In bonds and interest rates, yields and implied rates fall when prices rise, and move up when prices fall.

☆ Judge orders JPMorgan, Deutsche Bank to face lawsuits over Epstein ties
▼ + stars: | 2023-03-20 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailJudge orders JPMorgan, Deutsche Bank to face lawsuits over Epstein tiesCNBC’s Eamon Javers reports on new developments in the USVI lawsuit against JPMorgan.

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