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☆ Nobel economist Paul Krugman says the Silicon Valley Bank collapse has led to 'apocalyptic rhetoric' in markets, but almost none of it is true
▼ + stars: | 2023-03-17 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +5 min

The collapse of Silicon Valley Bank has bred "apocalyptic" fears in markets, but most are unfounded, Paul Krugman said. The Nobel economist refuted myths about SVB's failure and rescue in an op-ed for the NYT. The tech-focused bank failed a week ago, and was taken over by the FDIC to mark the largest bank collapse since the 2008 crisis. While Krugman believes SVB's collapse wasn't another Lehman Brothers moment, the bank was still a crucial part of the tech sector, which justifies its rescue. SVB's collapse will undermine the Fed's inflation fightThe fourth unfounded fear, Krugman says, is that the collapse of Silicon Valley Bank could interfere with the Fed's inflation fight.

☆ Fed Chair Jerome Powell reportedly blocked a statement on regulatory flaws that led to SVB's collapse
▼ + stars: | 2023-03-17 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The NYT reported that Fed Chair Powell blocked a mention of regulatory failings in a report on SVB. The final joint statement on SVB's fall speaks mostly of regulators' work since the 2008 crisis. Instead, the final statement only spoke positively of financial regulation, praising the reforms put in place after the 2008 Financial Crisis. Silicon Valley Bank was taken over by the FDIC last Friday, sparking an intense sell-off in bank stocks and wavering confidence in the US banking system. President Biden has promised to tighten regulation in the wake of SVB's failure, assuring Americans that the US banking system is safe.

☆ Wharton Professor Jeremy Siegel says the SVB collapse could be a good thing - if it 'knocks some reality' into the Fed to pause rate hikes
▼ + stars: | 2023-03-16 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The SVB crash could be good for markets if it forces the Fed to pause rate hikes, Jeremy Siegel said. The economist has blasted central bankers over rate hikes, which he says raise the odds of recession. SVB's implosion is a consequence of rising interest rates, and the Fed needs to take it as a wake up call, he said. Central bankers have raised interest rates 1,700% over the last year, a level that Siegel has warned could push the economy into a recession. A sudden pause in rate hikes could signal the Fed believes the banking system is in crisis, which could spark more volatility in markets and cause stocks to fall.

☆ US stocks trade mixed as Credit Suisse troubles stoke fears of a banking crisis
▼ + stars: | 2023-03-15 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +1 min

US stocks fell on Wednesday as fears of a banking crisis continued to rip through the market. Troubles at Credit Suisse alarmed investors, sparking a steep sell-off in shares of the Swiss bank. But the Swiss National Bank later said it will provide Credit Suisse with liquidity, if necessary. US-listed shares of Credit Suisse plummeted 22%, hitting a new all-time low in intraday trading. But the Swiss National Bank later said it will provide Credit Suisse with liquidity, if necessary, adding that it "meets the capital and liquidity requirements imposed on systemically important banks."

☆ US housing market gains momentum as loan applications jump amid first drop in mortgage rates in 5 weeks
▼ + stars: | 2023-03-15 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The housing market is gaining steam as rates drop and mortgage applications surge. The 30-year mortgage rate fell for the first time in five weeks, and applications jumped 7% last week. Mortgage applications jumped 6.5% over the week ending on March 10, the Mortgage Bankers Association said on Wednesday. That comes amid the first drop in mortgage rates in five weeks, with the rate on the 30-year fixed mortgage falling to an average of 6.71%. This decline pushed mortgage rates for all loan types lower," MBA deputy chief economist Joel Kan said in a statement.

☆ Bank stocks are now oversold but it's not time to buy the dip just yet, DataTrek says
▼ + stars: | 2023-03-14 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Bank stocks are now oversold, but it's not time to buy in just yet, DataTrek's Nicholas Colas said. He said regional bank stocks could see more downside, pointing to data in previous financial crises. In a note on Tuesday, the research firm pointed to the plunge in bank stocks on Monday as Wall Street reels from the collapse of SVB. Meanwhile KRE, a regional bank ETF, has plunged 23% over the past 50 trading days, which is 2 standard deviations below its long-run average. Regional banks posted a strong rebound in early Tuesday trading.

☆ It's crystal clear now: More banks are going to fail
▼ + stars: | 2023-03-13 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +4 min

It is likely that more bank failures are coming after the collapse of Silicon Valley Bank. "There's no doubt in my mind: There's going to be more. Investors are clearly nervous about the potential for a cascade of bank failures, reflected in the stock price of a handful of regional banks on Monday. Biden, Yellen vow no bailoutsThough depositors have been made whole in both recent failures, banks and their shareholders should be prepared for the government to let them fail, and should not count on anything resembling a 2008-style bailout. "And the reforms have been put in place means that we're not going to do that again."

☆ Police limit anti-government protest in Moldova
▼ + stars: | 2023-03-12 | by ( Alexander Tanas | ) www.reuters.com time to read: +3 min

[1/3] Moldovan law enforcement officers stand guard during an anti-government protest against the recent countrywide increase of power rates and prices, which is organised by opposition political movements including the Russia-friendly party Shor, in Chisinau, Moldova, March 12, 2023. REUTERS/Vladislav CuliomzaCHISINAU, March 12 (Reuters) - Police in Moldova kept several thousand demonstrators away from government buildings on Sunday after officials warned of possible organised disorder at the protest, the latest of a series denouncing pro-European President Maia Sandu. Moldova accused Russia last month of plotting to overthrow Sandu, while the United States pledged to support her government against destabilisation. Andrei Spinu, head of Sandu's administration, denounced Sunday's rally as "not a protest. This was yet another attempt by Russia to destabilise the situation in Moldova."

[1/5] An employee works at the Chisinau-1 gas distribution plant of Moldovatransgaz energy company in Chisinau, Moldova March 4, 2023. REUTERS/Vladislav CuliomzaCHISINAU, March 10 (Reuters) - A coup attempt, bomb hoaxes, internet hacks, fake conscription call-ups, mass protests: Moldova says it's had them all in the past year. Moldova hosts the breakaway statelet of Transnistria - a sliver of land running along its eastern border with Ukraine that's controlled by pro-Russian separatists and garrisoned by Russian troops. FAKE CONSCRIPTION NOTICESMounting tensions between Moscow and the West over Ukraine have raised the temperature in Moldova. RUSSIAN TROOPS IN TRANSNISTRIAAn estimated 1,500 Russian troops are stationed in Transnistria, most of them recruited locally from Transnistrians with Russian passports.

☆ Legendary investor Jeremy Grantham says the stock bubble is still deflating and the market will bottom in 2024 amid the Fed's 'horror show'
▼ + stars: | 2023-03-10 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +4 min

The stock bubble is still in the process of deflating and the market won't bottom until 2024, Jeremy Grantham said. The legendary investor blasted the Fed's monetary policy as a 36-year-long "horror show." He foresaw mild pain in the year ahead for investors, warning of a falloff in equities around April. Sign up for our newsletter to get the inside scoop on what traders are talking about — delivered daily to your inbox. That's similar to the rallies seen prior to the burst of the dot-com bubble, when the Nasdaq Composite plunged 40% in 2001.

☆ Silicon Valley Bank's implosion isn't a canary in the coal mine and won't result in contagion, RBC analyst says
▼ + stars: | 2023-03-10 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Silicon Valley Bank's implosion isn't a canary in the coal mine, said RBC analyst Gerard Cassidy. SVB also held a low ratio of small customer deposits, meaning its funding is more sensitive to rates. "This bank is different because they don't have low-cost consumer funding like other banks do," Cassidy said. Unlike other banks, just a small portion SVB's funding consisted of small consumer deposits, which put the bank at more risk. "The banks with the good deposit mix – and Silicon Valley didn't have that – those banks are okay, and this sell-off was unfortunate.

☆ Nearly 60% of institutional investors said they have used Reddit for investment decisions, survey shows
▼ + stars: | 2023-03-09 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

A Brunswick Group survey found 58% of institutional investors have used Reddit for investment decisions. "Institutional investors look for ways to keep their pulse on the conversation among retail investors." The investment advisory firm surveyed 257 US and European institutional investors – professionals who trade for banks, hedge funds and pensions – and found that 58% have used Reddit. "Institutional investors look for ways to keep their pulse on the conversation among retail investors. What's more, institutional investors are likely to be retail investors in their personal lives and may find their retail research habits helpful in their professional roles," the report said.

☆ Dow falls 543 points as US stocks slide ahead of important February jobs report
▼ + stars: | 2023-03-09 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

US stocks sank on Thursday as investors brace for Friday's key February jobs report. Investors are pricing in higher odds that the Fed dials rate hikes back up to 50 basis points later this month. Financial stocks were battered Friday after implosions at Silicon Valley Bank and Silvergate Capital. Stocks, however, reversed course to slide in afternoon trading, with the Dow losing over 500 points as investors turned their focus to Friday's non-farm payrolls report. Meanwhile, financials took a beating on Thursday, with bank stocks plunging after implosions at Silicon Valley Bank and Silvergate Capital rattled the sector.

☆ The Fed is 'monomaniacal' about raising unemployment and is making a mistake with inflation, Wharton professor Jeremy Siegel says
▼ + stars: | 2023-03-09 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

He told CNBC there was no need for the Fed to be so concerned about rising wages and inflation. Already, Fed officials have hiked interest rates by 450 basis-points, with markets now seeing a 50-basis-point hike later this month. But while central bankers are concerned over rising wages, which could fuel future inflation, they are necessary to fix structural supply gaps in the labor market, Siegel said. "I think their focus on just how tight is the labor market – suddenly a monomaniacal type of a focus – is the wrong way to go about it," he said. He added that central bankers were also making a mistake about inflation.

☆ The most closely watched recession indicator is telling markets that a downturn won't materialize for another 2 years, Credit Suisse chief stock strategist says
▼ + stars: | 2023-03-09 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The most closely watched recession indicator is saying a downturn won't happen for another two years. That's because the Treasury futures market suggests the yield curve inversion will last until 2026, Credit Suisse's Jonathan Golub said. Golub predicted a downturn to strike in August 2025 based on historical data. When short term bond yields surpass longer term yields, it is a notorious indicator of an incoming recession. On the more bearish end, Morgan Stanley's chief stock strategist warned of a 26% stock market crash, as higher interest rates weigh on equities.

☆ The EU is buying up Russian liquefied natural gas at the highest level in 3 years, think tank says
▼ + stars: | 2023-03-08 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

The EU is purchasing Russian liquefied natural gas at the highest level in three years, according to Bruegel data. Though the bloc has sanctioned Russian oil and fuel oil, LNG imports are still free-flowing. The EU snapped up 19.2 billion cubic meters of Russian LNG last year, a 35% increase from 2021. It also makes the EU Russia's second-largest LNG customer, despite efforts from European nations to cut off other Russian energy imports. Birol said the continent still needed to put more effort into diversifying away from Russian energy, or potentially risk blackouts later on in the year when storages are depleted.

☆ Housing market sentiment is nearing all-time lows as Americans fret over mortgage rates and employment outlook
▼ + stars: | 2023-03-08 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

US housing-market sentiment is edging back to an all-time-low, according to Fannie Mae. That's because Americans are worried over rising mortgage rates and the unemployment outlook. Markets are expecting more interest rate hikes from the Fed, which could help keep mortgage rates elevated. That's partly because of the Federal Reserve's aggressive rate hikes to control inflation, which have influenced mortgage rates to hover around twenty-year high. Markets are now expecting even steeper rate hikes from the Fed after Chairman Jerome Powell's hawkish testimony to lawmakers this week, with expectations for a 50 basis-point increase in March rising after his remarks.

☆ US stocks trade mixed as investors assess outlook for rates after Powell testimony
▼ + stars: | 2023-03-08 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

The Fed Chair warned steeper rate hikes may be needed due to strong economic data. Higher interest rates could also raise the risk of recession, which is weighing on investors. "The labour market remains extremely tight despite 450 basis points of rate hikes in the last year," Lazard chief market strategist Ronald Temple said in a statement. Higher interest rates are also raising investors' fear of an incoming recession. This combination of a weakening economy and more rate hikes would surely push the economy into a recession," Main Street Research chief investment officer James Demmert said.

☆ Bank of America CEO Brian Moynihan says the US will enter a recession in the 3rd quarter of this year
▼ + stars: | 2023-03-07 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

The US will enter a technical recession by the third quarter, according to BofA's Brian Moynihan. Moynihan said Bank of America expects the Fed to begin cutting rates in the second quarter of 2024. "It will be more of a technical recession than it will be a deep drop in the US." The US briefly entered a technical recession last year, but exited in the third quarter of 2022 as economic activity rebounded. But as the economy contracts, Moynihan said Bank of America expects the Fed to begin cutting rates in the second quarter of 2024.

☆ The speculative rally in tech and meme stocks is out of control again and some could plummet 20%, Morgan Stanley's chief equities strategist says
▼ + stars: | 2023-03-07 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Big tech and meme stocks are surging in a speculative rally, Morgan Stanley's Mike Wilson said. Wilson urged investors to get out of those risky areas of the market, as some names could lose 20% of their value. He has stayed bearish on stocks amid the 2023 rally, and predicted a 26% market crash to come in the coming months. "There's a lot of stuff that's gotten dragged along here that's wildly speculative now, in my viewing. While Wilson said the bear market rally still had room to run, he's been bearish on stocks for months and has called this year's rebound a "bull trap" for investors.

☆ US natural gas prices plummet 13% as streak of mild winter weather set to continue
▼ + stars: | 2023-03-06 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Natural gas prices have fallen 13% amid forecasts of more mild weather as winter winds down. Falling prices are a sign that the US needs to scale back gas production, some commentators say. Henry hub natural gas futures for April fell to $2.62 per million British thermal units, according to data from the CME Group, down 12.73% from its previous close of $3 per million BTUs. Natural gas prices have tanked 34% since the start of the year, with the latest drop spurred by warm weather forecasts for the coming weeks. The changes in supply-demand balance are a stark contrast from last year, when issues stemming from Russia's invasion of Ukraine spiked gas prices on the spot market.

☆ Microsoft is the market's top software stock because OpenAI offerings like ChatGPT will juice profits over the next 5-plus years, Credit Suisse says
▼ + stars: | 2023-03-06 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Microsoft is the market's top software stock, thanks to its investment in ChatGPT, Credit Suisse said. That could add $40 billion in revenue and $2 in EPS over the next 5-plus years, analysts predicted. The expanded partnership spurred a steep rally in Microsoft stock last month, with the company's market capitalization jumping back to $2 trillion. Credit Suisse analysts predicted Microsoft could gain $40 billion in revenue and $2 in earnings per share over the next five-plus years. Microsoft poured $10 billion in its investment earlier this year, on top of an existing $1 billion.

☆ Here's why the US avoiding a recession would actually be a 'treacherous' scenario for the stock market
▼ + stars: | 2023-03-03 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The US avoiding a recession could actually be horrible for stocks, TS Lombard said. That's because the Fed would likely keep interest rates high in a "no landing" scenario, weighing on equities. That's because the Federal Reserve would likely keep interest rates high, whereas central bankers have traditionally cut interest rates by at least 200 basis points when faced with a recession, strategists said. Though most analysts have forecasted interest rates reaching 5% this year, rates could soar to 6.5% if the US avoids a recession, strategists estimated. For its part, TS Lombard believes the US could enter a mild recession by mid-year, echoing forecasts from other Wall Street analysts.

☆ Dow jumps 387 points as US stocks snap weekly losing streak after rate fears ease
▼ + stars: | 2023-03-03 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

US stocks climbed higher on Friday, snapping a weekly losing streak. Fears of a move back to bigger rate hikes were eased as traders digested comments from Fed officials. All three indices ended the day higher, with the Dow gaining almost 400 points to break a four-week streak of losses. "The solid ISM survey and resilience to high interest rates will reinforce the Fed's resolve that interest rates should continue to move higher. "The Fed wants to tread lightly to minimize the risk that they overshoot and cause an unnecessarily severe downturn."

☆ A 'perfect storm' of recession, debt, and out-of-control inflation is coming for markets this year, 'Dr. Doom' Nouriel Roubini says
▼ + stars: | 2023-03-02 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

A recession, debt crisis, and stagflation trifecta is going to strike the US economy this year, according to Nouriel Roubini. Roubini, known for his doomsayer predictions on Wall Street, has warned for months that another financial crisis will hit markets. Roubini, one of the first economists to call the 2008 recession, has been warning for months of a stagflationary debt crisis, which combines the worst aspects of 70s-style stagflation and the '08 debt crisis. The result would be a steep recession anyway, followed by more debt and inflation problems. "Now we're facing the perfect storm: inflation, stagflation, recession, and a potential debt crisis," Roubini warned.

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