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☆ As Buffett's Berkshire buys more Occidental, one firm says you should follow suit
▼ + stars: | 2023-03-28 | by ( Yun Li | ) www.cnbc.com time to read: +2 min

Warren Buffett's buying spree of Occidental Petroleum is showing no signs of stopping, and Wall Street firm TD Cowen said investors should follow suit. Berkshire Hathaway purchased an additional 3.7 million Occidental shares for $216 million on Monday and last Thursday, boosting the conglomerate's stake in the Houston-based energy producer to 23.5%, a new regulatory filing showed. OXY 1Y mountain Occidental TD Cowen upgraded Occidental to outperform from market perform on Tuesday following the news. On top of Occidental's strong fundamentals, the Wall Street firm said the "captive buying support from Berkshire Hathaway" is a catalyst for the stock. "Berkshire buying shows little evidence of slowing," TD Cowen said.

☆ US consumer confidence rises; house price inflation slows
▼ + stars: | 2023-03-28 | by ( Lucia Mutikani | ) www.reuters.com time to read: +6 min

The Conference Board's consumer confidence index rose to 104.2 this month from a reading of 103.4 in February. Housing affordability, which deteriorated as mortgage rates surged in response to the Fed's fight against inflation, is starting to gradually improve as house price gains continue to moderate. Annual house price growth remained strong in the Southeast, with double-digit gains in Miami and Tampa. The region had experienced rapid house price increases in prior years. Goods trade balanceThe Commerce Department also reported that wholesale inventories rose 0.2% in February after falling 0.5% in January.

SummarySummary Companies Futures down: Dow 0.10%, S&P 0.17%, Nasdaq 0.22%March 28 (Reuters) - U.S. stock index futures slipped on Tuesday as Treasury yields rose amid easing worries about a banking crisis following First Citizens BancShares' U.S. regulator-backed deal for failed Silicon Valley Bank. Shares of First Citizens BancShares Inc (FCNCA.O) fell 1% in premarket trading after surging more than 50% on Monday following its deal to acquire the deposits and loans of failed Silicon Valley Bank. Regional banks also rose, led by First Republic Bank's (FRC.N) 2.2% gain after a 12% rally on Monday. Later in the day, Fed Vice Chair for Supervision Michael Barr will testify before the Senate Committee on Banking, Housing and Urban Affairs on "bank oversight" in the first of several hearings on the collapse of Silicon Valley Bank and Signature Bank. ET, Dow e-minis were down 31 points, or 0.1%, S&P 500 e-minis were down 6.75 points, or 0.17%, and Nasdaq 100 e-minis were down 27.75 points, or 0.22%.

☆ Morning Bid: Swinging between bank fears and rate risks
▼ + stars: | 2023-03-28 | by ( ) www.reuters.com time to read: +5 min

A look at the day ahead in U.S. and global markets from Mike DolanMarkets seem caught between the devil and the deep blue sea. Easing concerns about bank stability this week have merely re-introduced interest rate risk, reining in any suggestion of a runaway relief rally as the first quarter closes on Friday. While nerves persist over March bank failures and contagion fears, central banks are still faced with punchy growth and inflation and will likely switch attention back to cooling that down once they're assured banks can take the strain. But interest rate markets are already correcting as signs of stability in the banking arena emerge. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ First Republic rebounds by 25% on Monday to lead regional bank comeback
▼ + stars: | 2023-03-27 | by ( Jesse Pound | ) www.cnbc.com time to read: +2 min

People walk near a First Republic Bank branch on March 16, 2023 in New York City. Shares of First Republic jumped by 25% in premarket trading, chipping away at the struggling firm's steep losses in March. Regional bank stocks moved sharply higher in premarket trading on Monday as investors were encouraged by reports that the recent strain on the sector could be easing and that additional government support could be on the way. Regional bank stocks have been under significant pressure this month, with regulators closing SVB on March 10 and Signature Bank two days later following significant deposit outflows. Shares of First Citizens jumped 40% in premarket trading.

☆ Futures edge higher as SVB deal soothes bank fears
▼ + stars: | 2023-03-27 | by ( ) www.reuters.com time to read: +3 min

SummarySummary Companies Futures up: Dow 0.31%, S&P 0.34%, Nasdaq 0.17%March 27 (Reuters) - U.S. stock index futures edged higher on Monday after a buyout deal for failed Silicon Valley Bank's deposits and loans helped soothe some jitters around severe stress in the banking sector. First Citizens BancShares Inc (FCNCA.O) said on Monday it will acquire parts of Silicon Valley Bank (SIVB.O), the collapse of which earlier this month marked the largest bank failure since the 2008 financial crisis, unleashing fears about a liquidity crunch in the sector. Other regional banks Western Alliance Bancorp (WAL.N) and PacWest Bancorp (PACW.O) also climbed 5.4% and 9.2%, respectively. Shares of major U.S. banks JPMorgan Chase & Co (JPM.N), Citigroup (C.N) and Bank of America (BAC.N) advanced between 0.8% and 1.4%. While the Silicon Valley Bank deal has helped instill some confidence in the banking sector's stability, concerns about a bigger crisis have not abated completely, analysts said.

Hedge funds and other money managers sold the equivalent of 142 million barrels in the six most important contracts in the seven days ending on March 21, after selling 139 million barrels in the week to March 14. Fund managers have slashed their combined position to just 289 million barrels (6th percentile for all weeks since 2013) from 570 million (46th percentile) on March 7. The fund community liquidated 163 million barrels of previous bullish long positions in the two most recent weeks, while establishing 115 million barrels of new bearish short ones. The most recent week saw heavy sales across the board, including Brent (-63 million barrels), NYMEX and ICE WTI (-48 million), U.S. gasoline (-15 million), U.S. diesel (-6 million) and European gas oil (-10 million). Anticipating the erosion of the surplus, funds have bought the equivalent of 774 billion cubic feet in the last seven weeks.

☆ How First Republic's courtship of the wealthy led to meltdown
▼ + stars: | 2023-03-27 | by ( Lawrence Delevingne | ) www.reuters.com time to read: +6 min

March 27 (Reuters) - First Republic Bank (FRC.N) became the epicenter of the U.S. regional banking crisis after the wealthy clients it courted to fuel its breakneck growth started withdrawing deposits and left the bank reeling. Reuters GraphicsFor years, First Republic lured high net-worth customers with preferential rates on mortgages and loans. Morgan Stanley analysts estimated a deposit outflow of nearly half of total deposits according to a March 20 note. First Republic's loan book and investment portfolio also became less valuable as interest rates rose, which is hampering a capital raise. "Wealthy customers were drawn to First Republic in part because they could get large mortgages at rock-bottom interest rates," said McCoy.

Deposits held by small U.S. banks dropped by a record $119 billion to $5.46 trillion after the collapse of Silicon Valley Bank on March 10, according to data released Friday by the Federal Reserve. "We expect stress in the banking system to weigh on credit growth, which will in turn reduce real GDP growth," Goldman Sachs analysts led by chief economist Jan Hatzius wrote in a note, referring to gross domestic product. Tighter credit conditions will exert meaningful pressure on economic activity, but the effect will not be catastrophic unless the situation escalates into "full-blown crisis of confidence," Barclays analysts wrote in a note last week. U.S. regulators announced on Monday they would backstop a deal for regional lender First Citizens BancShares (FCNCA.O) to acquire failed Silicon Valley Bank, triggering an estimated $20 billion hit to a government-run insurance fund. "Banking system stress remains high, but there are some signs of stabilization," Bank of America Corp (BAC.N) analysts wrote in a note.

☆ SVB deal helps to steady banks amid credit crunch concerns
▼ + stars: | 2023-03-27 | by ( ) www.reuters.com time to read: +5 min

The sudden collapse of tech-focussed SVB earlier this month destabilised the sector and drew some of Europe's biggest banking names into investors' focus. In March, the Stoxx index of European bank shares .SX7P is down more than 18% and the U.S. KBW regional bank index .KRX has lost 21%, with investors on edge about what's next. In Europe, bank bonds are under pressure and credit default swaps, or the cost of insurance against defaults, uneasily high. First Citizens said it would take on assets of $110 billion, deposits of $56 billion and loans of $72 billion, and expand in California. It will share further potential losses with the FDIC and the FDIC retains some $90 billion in securities held for disposal.

☆ Inflation, migration in focus at regional Ibero-American summit
▼ + stars: | 2023-03-25 | by ( Paul Mathiasen And Jesus Frias | ) www.reuters.com time to read: +2 min

[1/4] Honduras President Xiomara Castro attends at the XXVIII Ibero-American Summit of Heads of State and Government, in Santo Domingo, Dominican Republic, March 25, 2023. Dominican Republic Ministry of Foreign Affairs/Handout via REUTERSSANTO DOMINGO, March 25 (Reuters) - Leaders attending the Ibero-American Summit meeting in the Dominican Republic on Saturday highlighted rising inflation and migration as risks to the stability of the region. "Today migration management constitutes one of the great regional challenges," said Chilean President Gabriel Boric. Venezuelan President Nicolas Maduro, meanwhile, canceled his attendance at the Ibero-American summit after receiving a positive COVID-19 test result, though he has since tested negative twice, Vice President Delcy Rodriguez said. Reporting by Paul Mathiasen and Jesus Frias in Santo Domingo and Marco Aquino in Lima Writing by Cassandra Garrison Editing by Matthew Lewis and Deepa BabingtonOur Standards: The Thomson Reuters Trust Principles.

☆ World stocks gyrate as bank contagion fears bite
▼ + stars: | 2023-03-24 | by ( Koh Gui Qing | ) www.reuters.com time to read: +5 min

"The growing sense of unease about the global banking system is heightening volatility in stock markets around the world," said Nigel Green, chief executive of deVere Group, a financial advisor. The failure of U.S. regional banks Silicon Valley Bank (SIVB.O) and Signature Bank (SBNY.O) this month triggered fears of a banking contagion and prompted U.S. Treasury Secretary Janet Yellen on Thursday to pledge action to safeguard bank deposits. JP Morgan Chase (JPM.N) dropped 1.52%, the S&P 500 banks index (.SPXBK) was down 0.33%, while the KBW regional bank index (.KRX) climbed 2.92%. "I don't expect this volatility (in bank stocks) to subside anytime soon," said Peter Doherty, head of investment research at private bank Arbuthnot Latham in London. Doherty said issues of "contagion risk within the U.S. banking sector" were undoubtedly weighing on appetite for bank stocks elsewhere.

☆ Bank fears will likely lead to even more market volatility in the week ahead
▼ + stars: | 2023-03-24 | by ( Patti Domm | In | ) www.cnbc.com time to read: +8 min

Market turbulence could reign supreme once again in the week ahead, as investors worry about the potential for more trouble rippling through the banking system. The broader market was initially under pressure Friday as investors became jittery about Deutsche Bank . "The market is saying: 'You, the Fed, do not appreciate the slowdown that is going to hit us,'" Chandler said. "The market is going to do a lot better and it held onto its gains despite all the things that rocked the market. He added that market concern about banks has risen, and there is concern credit tightening will hurt the economy.

☆ New York Fed board member warns of commercial real-estate risks
▼ + stars: | 2023-03-24 | by ( Michael S. Derby | ) www.reuters.com time to read: +4 min

The real-estate sector has also been hard hit by Fed rate rises and commercial real estate has also been hobbled by the shift away from in-office work during the pandemic. Rechler serves as what’s called a Class B director on the 12-person panel of private citizens who oversee the New York Fed. Each of the quasi-private regional Fed banks are also operated under the oversight of the Fed’s Board of Governors in Washington, which is explicitly part of the government. The boards overseeing each of the regional Fed banks are made up of a mix of bankers, business and non-profit leaders. Their most visible role is helping regional Fed banks find new presidents, although bankers who serve as directors are by law not part of this process.

☆ Real estate leader on NY Fed board warns on commercial real estate risks
▼ + stars: | 2023-03-24 | by ( Michael S. Derby | ) www.reuters.com time to read: +4 min

The global banking sector has been rocked since the sudden collapse this month of two U.S. regional banks sparked fears of contagion to other lenders. Separate sources told Reuters that UBS has promised retention packages to Credit Suisse wealth management staff in Asia to stem a talent exodus. Credit Suisse and UBS declined to comment, while the Justice Department did not immediately respond to Reuters' emailed requests for comment. The takeover of Credit Suisse has also ignited broader concerns about investors' exposure to a fragile banking sector. Standard Chartered (STAN.L) Chief Executive Bill Winters said on Friday the wipeout had "profound" implications for global bank regulations.

☆ Hong Kong on watch for any 'spillover' from US regional banks
▼ + stars: | 2023-03-24 | by ( ) www.reuters.com time to read: +1 min

HONG KONG, March 24 (Reuters) - Hong Kong needs to watch carefully for any further "spillover" from U.S. regional banks, although the city has very little exposure to the situation in European and U.S. financial institutions, the Hong Kong Monetary Authority said on Friday. "The recent events in the U.S. and Europe have very little impact on Hong Kong," Yue said. "The situation is largely stabilised, but we still need to watch whether there will be further spillover, especially to the other U.S. regional banks." Hong Kong and global banks needed to be prepared for any further volatility in the market, he added. Reporting by Donny Kwok and Anne Marie Roantree; Editing by Jacqueline Wong and Christopher CushingOur Standards: The Thomson Reuters Trust Principles.

☆ Morning Bid: Bank angst persists, unnerves Europe
▼ + stars: | 2023-03-24 | by ( ) www.reuters.com time to read: +5 min

But banks boosted borrowing under the Fed's newly launched Bank Term Funding Program to $53.7 billion - almost 5 times its first outing the previous week. European bank stocks fell 3% early on Friday, with Deutsche Bank shares (DBKGn.DE) down for a third day - losing 5% amid rising market costs for insuring against the risk of default. European Central Bank President Christine Lagarde is due to attend Friday's European Union summit in Brussels and update leaders on the state of affairs in the financial system. Wider markets were lower in Asia and Europe and U.S. stock futures were in the red again ahead of the open. With less than a 50% chance of another Fed rate rise in this cycle now priced into the futures, almost 80 basis points of rate cuts are now seen by year-end.

☆ Take Five: And let there be calm
▼ + stars: | 2023-03-24 | by ( ) www.reuters.com time to read: +5 min

LONDON, March 23 (Reuters) - At the incredible end to the first quarter for financial markets, rattled by bank turmoil, some stability will be much hoped for in coming days. SNB chief Thomas Jordan reckons the next two weeks will be vital to securing UBS's Credit Suisse takeover. Market cap of US regional banks included in the S&P 500 regional bank index3/ DID YOU SAY AT1? Potential legal action is also possible after Swiss authorities ruled that holders of Credit Suisse AT1 bonds would get nothing in the deal. And U.S. and European banks turmoil show how quickly a crisis can surface, giving Ueda even more reason for caution.

☆ ECB to reassure EU leaders on bank stability, call for EU deposit insurance
▼ + stars: | 2023-03-24 | by ( Jan Strupczewski | ) www.reuters.com time to read: +3 min

"She will ask the leaders to complete their Banking Union and go forward on the Capital Markets Union." EU DEPOSIT INSURANCE NEEDED TO COMPLETE BANKING UNIONEU leaders are likely to get a similar message on banks from the chairman of euro zone finance ministers Paschal Donohoe. "Completing the Banking Union" is EU code for introducing a European Deposit Insurance Scheme (EDIS), the last missing element from the project launched in 2012. The Banking Union is already two-thirds complete. The Capital Markets Union was launched in 2015 to facilitate access to private capital by EU companies, which now mainly depend on bank loans for any financing.

SummarySummary Companies European banks, bonds, CDS sell offDeutsche Bank CDS rise to highest since late 2018Confidence hurt, outlook dimsLONDON, March 24 (Reuters) - Confidence in European banks deteriorated further on Friday, with the cost of insuring against a debt default rising sharply as the profit outlook for the sector dimmed. Deutsche Bank's (DBKGn.DE) five-year credit default swaps (CDS) jumped 19 basis points (bps) from Thursday's close to 222 bps, rising to their highest since late 2018, data from S&P Global Market Intelligence showed. The prospect that interest rates may be close to peaking, as financial markets are signalling, would also curb banks' profit margins on lending. BOND WATCHEuropean banks' Additional Tier 1 (AT1) debt came under fresh selling pressure, with Deutsche AT1 prices down 6 cents, according to Tradeweb data. The selloff in AT1s highlighted concerns about rising funding costs for European banks and helped explain why the sector was facing renewed pressure on Friday, analysts said.

☆ Analysis: End of central bank rate hikes now firmly on the horizon
▼ + stars: | 2023-03-23 | by ( Balazs Koranyi | ) www.reuters.com time to read: +5 min

The U.S. Federal Reserve, the European Central Bank and the Bank of England all raised rates as expected in the last week, but each of them signalled caution about their next move, leaving investors unsure where borrowing costs are going. Central banks have also been quick. This is lightning-fast by central banking standards and ECB's Knot said policymakers needed to have a deeper look at how it is affecting lenders. Combined, these factors suggest that big central banks are nearly done, and that upcoming rate moves may be their last. If so, our view is that it could indeed substitute for further rate hikes," Michael Gapen at Bank of America said.

Traders' bets are almost equally split between the Fed pausing its rate hikes in May and another 25 bps hike, according to CME Group's Fedwatch tool. Communication services (.SPLRCL) and information technology (.SPLRCT) led the gains among the S&P 500 sector indexes, all of which rose, except utilities (.SPLRCU). Bank of America (BAC.N) and UBS (UBS.N) now see the Fed funds rate target peaking at 5-5.25% in May compared to earlier forecasts of 5.25-5.5%. Advancing issues outnumbered decliners by a 3.62-to-1 ratio on the NYSE and 3.27-to-1 ratio on the Nasdaq. The S&P index recorded one new 52-week high and five new lows, while the Nasdaq recorded 17 new highs and 27 new lows.

Bank of America (BAC.N) and UBS (UBS.N) now see the Fed funds rate target peaking at 5-5.25% in May compared to earlier forecasts of 5.25-5.5%. Nvidia Corp (NVDA.O) rose 1.9% after Needham raised its price target on the chipmaker on likely benefit from near-term data center strength. ET is expected to show a rise in jobless claims last week, hinting at some cooling in labor demand. Regeneron Pharmaceuticals Inc (REGN.O) jumped 8.6% on promising results on its blockbuster asthma drug Dupixent from a lung disease trial. Reporting by Amruta Khandekar and Ankika Biswas in Bengaluru; Editing by Savio D'Souza and Vinay DwivediOur Standards: The Thomson Reuters Trust Principles.

☆ Morning Bid: Central banks try to see through stress
▼ + stars: | 2023-03-23 | by ( ) www.reuters.com time to read: +4 min

A look at the day ahead in U.S. and global markets from Mike DolanEven with a nod to greater banking stress, the major central banks all seem determined to tighten the monetary screw another notch. With Treasury Secretary Janet Yellen's pushback against suggestions of a blanket insurance of all U.S. banking deposits unnerving investors again after the Fed decision, few believe the financial stress has fully dissipated. Even though stock markets swooned after the Yellen comments on Wednesday, S&P500 futures were back up smartly ahead of Thursday's open. European bourses and banking stocks were only a touch lower in the face of the latest European rate rises. The dollar hit its lowest since early February but regained its footing ahead of the U.S. open and BoE decision.

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