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☆ Morning Bid: Next up ECB - Will it be a hawkish 25 or dovish 50?
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +2 min

[1/2] Signage is seen outside the European Central Bank (ECB) building, in Frankfurt, Germany, July 21, 2022. REUTERS/Wolfgang Rattay/File PhotoA look at the day ahead in European and global markets from Vidya Ranganathan. The spotlight moves swiftly from the Fed's "possible pause or pivot" message overnight to the European Central Bank, where the direction of rates is not in question. It will be a seventh rate rise for the ECB, the central bank for a 20-country zone whose headline inflation is 7%, and it has so far dismissed the ongoing banking crisis as U.S.-specific. Will the ECB go for a heavier 50 basis-point hike and signal a possible pause, allowing President Christine Lagarde to echo Fed Chair Jerome Powell's "credit tightening" excuse?

May 3 (Reuters) - PacWest Bancorp (PACW.O) is exploring strategic options including a sale or capital raising, a source familiar with the matter said, sending the shares of the bank and several other U.S. regional lenders tumbling in after-market trading. The Phoenix-based regional lender said it was "reaffirming its financial strength as well as its deposit growth guidance in response to recent industry events." PacWest stock has lost almost 90% of its value since the regional banking crisis started on March 8. Zion Bancorp (ZION.O), First Horizon (FHN.N) and Comerica (CMA.N) each slumped more than 7% and the SPDR S&P Regional Banking ETF (KRE.P) dropped 5%. The cost of insuring against further losses in regional U.S. bank stocks stood on Wednesday near a one-month high in options markets.

☆ Stock markets nervous about Fed pivot and banking sector
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +4 min

"The Fed decision was widely expected, so it didn't provide much of a shock to financial markets," Tina Teng, market analyst at CMC Markets, in Auckland. "However, I think the whole economic playout is not positive, especially the recent banking rout from the regional banks, and those big banks taking over the smaller banks. It's not a good sign, and risks are spreading out into the wider banking system, which worries investors." E-mini futures for the S&P 500 fell 0.22%, reflecting the dramatic slide in regional banking shares after the close of U.S. markets. The Fed is trying to indicate a direction, and the market is looking further down the path than the Fed's willing to communicate."

☆ Western Alliance says no unusual deposit outflows after First Republic sale
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +2 min

[1/2] A screen displays the logo and trading info for Western Alliance Bancorporation on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 14, 2023. REUTERS/Brendan McDermidMay 3 (Reuters) - Western Alliance Bancorp (WAL.N) said on Wednesday it had not experienced unusual deposit outflows following the sale of collapsed lender First Republic Bank to JPMorgan Chase & Co (JPM.N), as the U.S. regional bank sought to reassure investors. Phoenix-based Western Alliance said its total deposits were $48.8 billion as of Tuesday, up from $48.2 billion as of Monday. The statement from Western Alliance came after reports that PacWest Bancorp (PACW.O) was exploring strategic options including a sale or capital raising. The news sent shares of several regional lenders tumbling in after-market trading, led by a 52% plunge at PacWest and 23% decline at Western Alliance.

☆ Dollar falls after Fed signals pause; banking woes dent confidence
▼ + stars: | 2023-05-04 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

"Additional tightening may be needed ... but the FOMC does not appear to be pre-committing to another rate hike on June 14." The U.S. dollar index was last 0.12% lower at 101.11, after dropping more than 0.6% in the previous session. "There are a lot of concerns in the U.S. around the banking sector and the crunch on credit. "So I think central banks, including the Fed, are at or very near the peak in their cash rates." The European Central Bank (ECB) comes under the spotlight next, where expectations are for ECB policymakers to raise interest rates for the seventh meeting in a row later on Thursday.

As each domino falls, the next weakest bank begins to wobble," billionaire investor Bill Ackman wrote in a tweet. PacWest stock has lost almost 90% of its value since the regional banking crisis started on March 8. Zion Bancorporation (ZION.O), Comerica (CMA.N) and First Horizon (FHN.N) each slumped more than 7% and the SPDR S&P Regional Banking ETF (KRE.P) dropped 5%. The cost of insuring against further losses in regional U.S. bank stocks stood on Wednesday near a one-month high in options markets. On Wednesday a source said the lender was looking at options that include a potential sale or capital raise.

☆ Stocks making the biggest moves before the bell: Paramount, PacWest, Shopify & more
▼ + stars: | 2023-05-04 | by ( Peter Schacknow | ) www.cnbc.com time to read: +2 min

Check out the companies making headlines in premarket trading. PacWest Bancorp – PacWest tumbled 37% in premarket trading after the banking company said it was considering various strategic options. Shopify – The e-commerce platform reported-better-than expected quarterly results and also announced the sale of parts of its fulfillment operation as well as its logistics division. Qualcomm – Qualcomm slumped 7.7% in premarket trading after the chipmaker issued a weaker than expected current quarter forecast, hurt by sagging smartphone sales. Qualcomm did report better than expected revenue for its latest quarter, with earnings matching Wall Street estimates.

☆ Club meeting recap: Equities slide, J&J consumer IPO, Costco sales
▼ + stars: | 2023-05-04 | by ( Paulina Likos | ) www.cnbc.com time to read: +3 min

Every weekday the CNBC Investing Club with Jim Cramer holds a "Morning Meeting" livestream at 10:20 a.m. Stocks slide amid mounting volatility J & J launches consumer IPO Buy Costco here 1. J & J priced shares of Kenvue at $22 apiece, valuing the new company at $41 billion. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB.

☆ Western Alliance latest US bank to explore sale, Financial Times reports
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +1 min

May 4 (Reuters) - Western Alliance (WAL.N) is exploring strategic options including a potential sale of all or part of its business, the Financial Times reported on Thursday citing two people briefed on the matter. The Arizona-based bank has hired advisers to explore its options, the report added, saying the bank's deliberations were at an early stage and might not come to anything. Shares in Western Alliance had fallen 45% in volatile trading before being halted. Three U.S. regional banks have failed in the last two months, spurring widespread worries about the sector's stability and deepened concerns about lenders as nervous clients moved their money to bigger financial institutions. PacWest Bancorp (PACW.O) also said late on Wednesday it was in talks with potential partners and investors about strategic options.

☆ Treasury: US banks have 'substantial' liquidity, deposit flows are stable
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +1 min

WASHINGTON, May 4 (Reuters) - The U.S. Treasury Department on Thursday said it was continuing to monitor market developments amid sharp drops in the shares of regional lenders PacWest Bancorp <PACW.O and Western Alliance Bancorp (WAL.N), but deposit flows were stable. "We continue to closely monitor market developments," a Treasury official said. "The banking system has substantial liquidity and deposit flows are stable." Western Alliance's stock was down 58.2%, despite a statement from the bank saying it had no unusual deposit outflows and had adequate liquidity. First Republic was the third major casualty of the biggest crisis to hit the U.S. banking sector since 2008.

☆ PacWest Says It’s Exploring Options After Shares Plunge
▼ + stars: | 2023-05-04 | by ( Lauren Hirsch | ) www.nytimes.com time to read: +1 min

Deposits stood at $28 billion as of Tuesday, compared with roughly $29 billion that it said it held in late April. The bank released the updated details after its shares had plunged more than 50 percent in late trading on Wednesday. That drop came after Bloomberg News reported that the bank was working with advisers to explore options, including a sale. In premarket trading on Thursday, PacWest was down about 37 percent. Two other regional lenders, Western Alliance and Zions Bancorp, fell 19 percent and 10 percent.

☆ Futures waver as PacWest slide offsets Fed pause optimism
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +3 min

The Fed over the past 14 months has raised rates by 500 basis points to tame price pressures in its most aggressive policy tightening since the 1980s. The KBW Regional Banking index (.KRX) and S&P 500 Banks index (.SPXBK) have lost around 29% and 15% so far in 2023. Investors will also monitor weekly jobless claims for further clues on the state of the labor market. Qualcomm Inc (QCOM.O) slumped 6.7% after third-quarter forecasts missed estimates, while Etsy Inc (ETSY.O) gained 3% on beating expectations for quarterly revenue. Reporting by Ankika Biswas in Bengaluru; Editing by Shounak DasguptaOur Standards: The Thomson Reuters Trust Principles.

☆ Banking crisis: Why markets are still freaking out about banks
▼ + stars: | 2023-05-04 | by ( Allison Morrow | ) edition.cnn.com time to read: +6 min

Similarly, southeastern regional bank First Horizon was teetering, having scrapped a $13 billion merger with Canada’s TD bank. That market pessimism was echoed by Bill Ackman, the billionaire investor, who tweeted Thursday that regional banks broadly are in trouble. Without a miracle from DC, the outlook for regional banks is not great. There is so much pessimism percolating on Wall Street, smaller banks are going to get crushed. That means we can expect more bank failures, and more Wall Street panic, in the weeks and months ahead.

☆ Here are Thursday's biggest analyst calls: Apple, Western Alliance, Berkshire Hathaway, Wix & more
▼ + stars: | 2023-05-04 | by ( Michael Bloom | ) www.cnbc.com time to read: +6 min

"We are initiating coverage of ZI with a BUY rating and a $30 target as a rare value investment within software. Citi upgrades Deutsche Bank to buy from neutral Citi said the global investment bank is at an "attractive entry point." " Deutsche Bank is one of the most de-rated banks YTD, yet the 1Q23 results demonstrated potential for further consensus earnings upgrades." Rosenblatt reiterates Apple as buy Rosenblatt said it's standing by its buy rating heading into earnings on Thursday after the bell. " CFRA reiterates Berkshire Hathaway as hold CFRA said it's standing by its "fairly valued" hold rating heading into Berkshire earnings on Saturday.

ECB chief Christine Lagarde said the central bank for the 20 countries that share the euro was not pausing. "This is a very restrictive policy and it will turn into credit tightening and that will bring a recession." The ECB has now increased its key deposit rate by some 375 bps since last July, from -0.5%. U.S. rates have jumped 500 bps, with the Federal Reserve hiking again on Wednesday while opening the door to a pause. Gareth Rudd, a European equity fund manager at Chelverton Asset Management, said he was negative on European bank stocks because regulators will want them to conserve capital instead of paying dividends.

In theory, that should be welcome news for stocks and other so-called risk assets, which wilted under the barrage of hikes last year. Yet some investors worry this year's 6.5% rebound in the S&P 500 has made equities expensive. Many are also wary that the Fed's rate hikes may precipitate a recession later this year. Stocks fell on Wednesday, with the S&P 500 ending down 0.7%, after the Fed's latest policy decision in which the central bank also raised rates by 25 basis points, as markets expected. Friday's U.S. employment report and next week's consumer price index data may give investors a sense of how deeply the Fed's rate hikes have seeped into the economy.

☆ Short sellers reap $378.9 mln from losses in PacWest, two other bank stocks - Ortex
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +1 min

May 4 (Reuters) - Short sellers made $378.9 million in paper profits betting against regional banks First Horizon Corp (FHN.N), PacWest Bancorp (PACW.O) and Western Alliance Bancorp (WAL.N) in Thursday's session, analytics firm Ortex said. PacWest Bancorp (PACW.O) dove 57% on Thursday, dragging down other regional lenders, after the Los Angeles-based bank said it was in talks about strategic options. Western Alliance Bancorp (WAL.N) denied a report from the Financial Times that said it was exploring a potential sale. Over the first two days of May, short sellers made $1.2 billion from declines in stocks of U.S. regional lenders, according to Ortex. Short sellers typically sell borrowed securities and aim to buy these back at a lower price to pocket the difference.

☆ PacWest tumbles on weighing options, other U.S. regional bank stocks fall
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +2 min

May 4 (Reuters) - Shares of U.S. regional banks fell premarket on Thursday, hurt by a 37% slump in PacWest Bancorp (PACW.O) after its announcement about exploring strategic options spurred market concerns of a worsening banking crisis. Zion Bancorporation (ZION.O), KeyCorp (KEY.N), Valley National Bancorp (VLY.O), Comerica (CMA.N) and First Horizon (FHN.N) dropped between 2% and 6%. The SPDR S&P Regional Banking ETF (KRE.P) shed 2.8%. The slide in shares of PacWest and its peers highlights uncertainty around the health of regional banks despite regulatory efforts to call an end to the banking crisis that started with the collapse of Silicon Valley Bank and Signature Bank in March. PacWest Bancorp reported a loss of $1.1 billion attributed to shareholders for the first quarter of the year.

☆ PacWest is the latest bank whose future is in question after reports it's weighing a sale sent shares tumbling over 50%
▼ + stars: | 2023-05-04 | by ( Huileng Tan | ) www.businessinsider.com time to read: +2 min

The news sent PacWest's share price down 52.5% to $3.05 apiece in after-hours trade on Wednesday. PacWest Bancorp is the latest regional bank to be hit by uncertainty following media reports it is considering a range of strategic options — including a sale. Wednesday's rout in PacWest shares marked its fifth straight day of stock price slide. The shares had plunged by 26% on Tuesday amid a broad sell-off in regional bank stocks, two days after First Republic Bank failed and was taken over by the Federal Deposit Insurance Corporation. PacWest shares closed 2% lower at $6.42 apiece on Wednesday and are down 72% so far this year.

☆ Almost 50% of Americans say they worry about their money being safe with a bank as shares of regional lenders plunge amid deposit outflows
▼ + stars: | 2023-05-04 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

Nearly half of Americans are worried about the safety of their cash in banks and other financial institutions, Gallup said Thursday. But 20% said they were "not worried at all" about their cash, and 30% considered themselves "not too worried." The study was conducted throughout April after Silicon Valley Bank and Signature Bank imploded in March. But its message didn't soothe those trading regional bank stocks on Thursday. Regional bank stocks plunged, with PacWest Bancorp sliding nearly 50% following a Bloomberg report the Beverly Hills-based lender is weighing strategic options, including a breakup or a sale to a larger rival.

☆ CNBC Daily Open: 10th time's the charm
▼ + stars: | 2023-05-04 | by ( Jihye Lee | ) www.cnbc.com time to read: +2 min

WASHINGTON, DC - MAY 03: Federal Reserve Board Chairman Jerome Powell arrives to a news conference following a Federal Open Market Committee meeting on May 3, 2023 in Washington, DC. The Federal Reserve announced a 0.25 percentage point interest rate increase bringing the key federal funds rate to more than 5%, a 16-year high. (Photo by Anna Moneymaker/Getty Images)This report is from today's CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Subscribe here to get this report sent directly to your inbox each morning before markets open.

☆ Exclusive: U.S. officials assessing possible 'manipulation' on banking shares- source
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +3 min

May 4 (Reuters) - U.S. officials at the federal and state level are assessing the possibility of "market manipulation" behind big moves in banking share prices in recent days, a source familiar with the matter said on Thursday. Shares of regional banks resumed their slide this week after the collapse of First Republic Bank, the third U.S. mid-sized lender to fail in two months. Short sellers raked in $378.9 million in paper profits on Thursday alone from betting against certain regional banks, according to analytics firm Ortex. "State and federal regulators and officials are increasingly attentive to the possibility of market manipulation regarding banking equities," the source said. "This week we have seen that regional banks remain well- capitalized," the source said.

☆ PacWest, Western Alliance hit as US banking concerns widen
▼ + stars: | 2023-05-04 | by ( Medha Singh | ) www.reuters.com time to read: +3 min

PacWest (PACW.O) slumped 37% in premarket trade, after having lost 29% since Monday. Reuters had reported on Wednesday that PacWest was exploring strategic options including a potential sale or capital raising, which the lender confirmed late in the day. Zion Bancorporation (ZION.O), KeyCorp (KEY.N), Valley National Bancorp (VLY.O), Comerica (CMA.N) and First Horizon (FHN.N) dropped between 2% and 6%. The SPDR S&P Regional Banking ETF (KRE.P) shed 2.8%. PacWest Bancorp reported a loss of $1.1 billion attributed to shareholders for the first quarter of the year.

☆ Factbox: PacWest Bancorp, US regional lender in spotlight
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +2 min

Here are some details about the bank:* PacWest is a community bank focused on providing business banking and treasury management services to small, middle-market, and venture-backed businesses. PacWest's market value has now fallen to $772 million after its shares tumbled 72% this year. * According to data from the U.S. Federal Reserve, PacWest was the 53rd largest U.S. bank, as of Dec 31. * As of March 31, the lender held total deposits of $28.2 billion and total assets of $44.3 billion. Meanwhile, total insured deposits, which have come into focus since the crisis, were about 75% of total deposits as of May 2.

☆ Mohamed El-Erian slams Powell's suggestion that the bank turmoil is over – says it could be added to a list of Fed communications that eroded its credibility.
▼ + stars: | 2023-05-04 | by ( Zinya Salfiti | ) www.businessinsider.com time to read: +3 min

Mohamed El-Erian raised doubts about Fed chair Jerome Powell's suggestion that the worst of the banking turmoil is over. PacWest is the latest bank to be hit by uncertainty, with its shares tumbling more than 50% in after-hours trading Wednesday. El-Erian said Powell's remarks may get added to a list of Fed communications that ended up eroding its credibility. It is the latest regional bank to be hit by the turmoil that started with Silicon Valley Bank's collapse in March. It's important the Fed notes that this doesn't mean the banking system as a whole is facing an existential crisis, he added.

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