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Shares of U.S. regional banks rose, led by a 11.6% premarket rise in Western Alliance Bancorp (WAL.N) as the lender's deposit growth exceeded $2 billion and brokerage Bank of America Global Research resumed coverage of the bank with a "buy" rating. U.S. President Joe Biden will continue talks with congressional leaders on the debt ceiling later this week, the White House said one day after an hour-long meeting seen as productive. "Cautious optimism expressed from both President (Joe) Biden and Speaker (Kevin) McCarthy about the progress of the debt talks has made people feel a little bit better," said Michael James, managing director of equity trading at Wedbush Securities. Target Corp(TGT.N) edged 0.4% higher in choppy trading after the retailer beat first-quarter profit expectations but forecast current-quarter profit below expectations. ET, Dow e-minis were up 129 points, or 0.39%, S&P 500 e-minis were up 13 points, or 0.32%, and Nasdaq 100 e-minis were up 18.5 points, or 0.14%.

☆ US regional bank shares jump on Western Alliance deposits growth
▼ + stars: | 2023-05-17 | by ( ) www.reuters.com time to read: +1 min

May 17 (Reuters) - Shares of U.S. regional lenders climbed premarket on Wednesday, looking to break out of range-bound trading as an update on Western Alliance Bancorp's (WAL.N) deposit levels soothed concerns that the U.S. banking crisis was getting worse. Western Alliance shares shot up 11% to $35.18, on course to erase losses recorded over the last two weeks if gains hold. Western Alliance and other regional lenders have seen their stock valuations battered by worries around a broader crisis and funding costs, with consumers moving money into bigger banks after three mid-sized U.S. lenders collapsed in the last two months. The bank's shares have seesawed in the last few sessions, rallying nearly 18% on Monday only to give back those gains a day later. Shares of Comerica Inc (CMA.N), Zions Bancorp (ZION.O) and KeyCorp (KEY.N) were also up between 1.3% and 3.5%.

☆ Here's what analysts are saying after Western Alliance's latest update
▼ + stars: | 2023-05-17 | by ( Brian Evans | ) www.cnbc.com time to read: +2 min

Analysts on Wall Street are optimistic on Western Alliance after the bank's latest deposit update. Shares of Western Alliance popped more than 9% in the premarket. The analyst has a $71 per share price target on Western Alliance, which represents about 125% upside from Tuesday's closing price of $31.59. WAL YTD mountain Western Alliance stock has broken out in recent days, gaining 15% in the last five trading sessions. His price target points to more than 100% upside over the next 12 months.

☆ LSEG, Experian shares weigh on UK's FTSE 100
▼ + stars: | 2023-05-17 | by ( Johann M Cherian | ) www.reuters.com time to read: +2 min

The financial services sector (.FTUB3020) slid 1.1% while the broader FTSE 100 (.FTSE) shed 0.1%. Shares of Experian Plc (EXPN.L) slipped after the credit data firm forecast annual organic revenue to grow between 4% and 6%, while analysts were expecting a 5.8% growth. "In early trade, the market looks to be taking a cautious approach (with Experian's shares)," said Steve Clayton, head of equity funds, Hargreaves Lansdown. Among other movers, Watches of Switzerland Group Plc (WOSG.L) slumped 7.4% on a marginal sales decline in the first quarter. Bucking the sombre mood, Sage Group Plc (SGE.L) rose 3.6% after upgrading its annual organic recurring revenue growth forecast.

"Global debt is now $45 trillion higher than its pre-pandemic level and is expected to continue increasing rapidly," said the IIF in its quarterly Global Debt Monitor. The report partly focused on the effects of last year's rapid rise in rates in some bank balance sheets. "Shadow banks now account for more than 14% of financial markets, with the majority of growth stemming from a rapid expansion of U.S. investment funds and private debt markets." But for others access to markets has been harder or non-existent on either tighter spreads as rates rose in developed markets or fast-rising borrowing costs. "With the interest rate differential between EMs and mature markets diminishing, EM local currency debt is less appealing for foreign investors," the IIF said.

☆ Analysis: Overexposed US regional banks could sell commercial property loans
▼ + stars: | 2023-05-17 | by ( Matt Tracy | ) www.reuters.com time to read: +5 min

Still, previously unreported data from New York-based real estate data provider Trepp, shared with Reuters, show many regional banks' holdings exceed thresholds stipulated by regulators. While big banks have recently warned about CRE exposure, the new Trepp data underscores how acute and widespread the problem is across the banking sector. The regulatory guidance requires that banks exceeding these thresholds "should employ heightened risk management practices," including potential sales of specific loans. Meanwhile, New York Community Bancorp (NYCB.N) and Flagstar Bank [RIC:RIC:FBCANK.UL] were among the top five banks listed by Trepp that exceeded the CRE loan threshold. In Tuesday congressional testimony, FDIC chair Martin Gruenberg warned CRE loan portfolios "face challenges" should market conditions persist.

Berkshire acquired 9.92 million shares in Capital One, a stake worth $954 million based on the closing price on March 31, regulatory filings showed on Monday. The bank's shares have shed around 15% since early March as the banking crisis has clobbered shares of U.S. regional lenders. Silicon Valley Bank, Signature Bank, and First Republic Bank are the three banks that have so far collapsed during the current crisis. The KBW Regional Banking Index (.KRX) fell 0.38%. Fed Vice Chair for Supervision Michael Barr said the central bank was "carefully considering" rule changes for larger regional banks, including requiring them to account for unrealized losses on their banks when considering capital levels.

"I believe it was a series of unprecedented events that all came together in the fastest bank run in history," Becker told the Senate Banking Committee. "I was the CEO of Silicon Valley Bank, I take responsibility for what ultimately happened," Becker said. Executives from Signature Bank also testified alongside Becker on Tuesday, pushing back on assertions from lawmakers that the bank had weak corporate governance. "I don't believe that there was mismanagement at the bank," said Eric Howell, the former president of Signature Bank. The bank tried to cover the loss by raising capital, but in announcing the transaction helped fuel a bank run.

The S&P Regional Banking Index fell approximately 25% during the quarter as a run on deposits sank Silicon Valley Bank and Signature Bank in March, both of which were at the time the largest banking failures since the Great Financial Crisis. The S&P Regional Banking index is now down 36% for the year to date. Famed "Big Short" investor Michael Burry's Scion Asset Management, meanwhile, added a number of new positions in regional banks, including stakes in First Republic, PacWest (PACW.O) and Western Alliance Bancorp (WAL.N). Shares of regional banks have remained volatile in recent weeks, with some investors wary of more tumult to come in the sector. London-based Marshall Wace sold 51,300 shares of First Republic in the first quarter, closing its position in the bank.

☆ Foreign buying of US Treasuries in March hits largest since June 2021 -data
▼ + stars: | 2023-05-15 | by ( Gertrude Chavez-Dreyfuss | ) www.reuters.com time to read: +3 min

There were lots of buying by China, lots of buying by Japan. Japan, however, had been selling Treasuries for most of 2022 to help boost a weak yen. China had been selling Treasuries as well, like Japan for most of last year. U.S. residents, meanwhile, increased their holdings of long-term foreign securities, with net purchases of $22.8 billion, compared with net selling of $8.3 billion in February. Overall, net foreign purchases of long-term securities are estimated to have been $133.3 billion in March, up sharply from February's inflows of $56.6 billion, data showed.

☆ US regional banks rise in attempt to shake off crisis of confidence
▼ + stars: | 2023-05-15 | by ( ) www.reuters.com time to read: +2 min

... Read moreMay 15 (Reuters) - Shares of U.S. regional lenders gained on Monday led by a rebound in PacWest Bancorp (PACW.O), as investors tried to look past the crisis of confidence brought on by the collapse of three banks in a span of two months. PacWest rose 8.4%, while Western Alliance Bancorp (WAL.N), Fifth Third Bancorp (FITB.O), Comerica Inc (CMA.N) and KeyCorp (KEY.N) were up between 2% and 6%. The KBW Regional Banking Index (.KRX), which had lost 13.7% so far this month, rose 2%. Then in May First Republic collapsed, creating a vicious cycle that put pressure on regulators to intervene. However, investors have remained wary of any reassurances from analysts and regulators on the stability of the regional banks despite deposits rising.

☆ TPG returns to credit party fashionably late
▼ + stars: | 2023-05-15 | by ( Jonathan Guilford | ) www.reuters.com time to read: +3 min

The buyout firm is acquiring Angelo Gordon, an asset manager that specializes in private credit, for $2.7 billion, it said on Monday. The direct-lending portion of its $55 billion credit business emphasizes borrowers with less than $25 million of EBITDA. While it missed the last private credit bonanza, it isn’t saddled with jumbo-size and potentially shaky loans written at the top of the last cycle. As U.S. regional banks struggle, private credit firms see what Blackstone has termed a “golden moment” to muscle in on new turf. Follow @JMAGuilford on TwitterCONTEXT NEWSPrivate equity firm TPG said on May 15 that it had agreed to acquire private credit and real estate-focused investment firm Angelo Gordon for $2.7 billion, including cash and stock.

The latest Commodity Futures Trading Commission (CFTC) data show that speculators have built up record short positions in two- and five-year Treasuries futures, and a record net short aggregate position when 10-year bonds are added to the mix. A short position is essentially a wager that an asset's price will fall, and a long position is a bet it will rise. The latest CFTC data show that in the week through May 9 speculative accounts grew their net short position in two-year Treasuries by 116,409 contracts - the biggest increase in over two years - to a new record 749,885 contracts. Funds also increased their net short position in five-year bonds for a third straight week by a slender 412 contracts, to a fresh record 910,642, while they trimmed their net short position in the 10-year space slightly to 731,698 contracts. Funds were ultra-bearish the five-year and 10-year bonds in late 2018, but nowhere near as bearish on two-year Treasuries.

☆ Canada housing market upturn could delay shift to BoC rate cuts
▼ + stars: | 2023-05-14 | by ( Fergal Smith | ) www.reuters.com time to read: +3 min

The housing market's upturn comes after the Bank of Canada paused its interest rate hiking campaign last month, leaving the benchmark rate at a 15-year high of 4.50% since January. A rebound in the housing market could boost activity and contribute directly to price pressures. "The Bank of Canada at the end of the day is probably not going to be too thrilled if the housing market really starts to ramp up," said Robert Kavcic, a senior economist at BMO Capital Markets. In addition, variable-rate borrowers have been sheltered from higher interest rates after lenders temporarily extended the period over which their debt is amortized, keeping their payments the same. But there are also tailwinds to support a recovery, including supply shortfalls, record immigration and labor market strength, analysts said.

☆ Wall St Week Ahead Amid banking woes, faltering US small-caps offer ominous economic sign
▼ + stars: | 2023-05-14 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +5 min

NEW YORK, May 12 (Reuters) - A U.S. stocks rally is leaving behind smaller companies, a sign that investors may be bracing for economic turmoil ahead. "Typically in a recession, small caps underperform." Last month it downgraded its view on U.S. small caps from "unfavorable" to "most unfavorable." Some investors are more upbeat about the outlook for small caps, particularly when looking beyond the next several months. One reason is that small caps, being sensitive to economic fluctuations, tend to shine early in a market recovery.

☆ Yellen expects US regulators to be open to mergers among midsize banks
▼ + stars: | 2023-05-13 | by ( Andrea Shalal | ) www.reuters.com time to read: +2 min

... Read moreNIIGATA, Japan, May 13 (Reuters) - The current banking environment and pressures on earnings of some U.S. regional banks may lead to some concentration in the sector, and regulators will likely be open to such mergers, Treasury Secretary Janet Yellen said on Saturday. Yellen told Reuters she was not seeing evidence of pressure on smaller community banks, which had a large percentage of insured deposits. She expressed confidence that nearly all banks had access to sufficient liquidity to guard against unexpected deposit outflows from uninsured depositors. However, she said a certain degree of consolidation in the regional and midsize banking sector could occur. Yellen noted that pressure on a bank's stock could unsettle uninsured depositors.

Solar panel manufacturer First Solar emerged as this week's biggest gainer, with shares surging 26.3% as of Friday morning. Approximately 41% of analysts covering the stock rate it a buy, according to FactSet. To be sure, the stock is already 2.6% above analysts' consensus price target. More than half of analysts covering Albemarle rate it a buy, according to FactSet data. The stock is up approximately 15% in 2023, and analysts estimate additional 6% growth, based on the average price target.

She will warn about "the global impact of this standoff and highlight the need to avoid default," a senior Treasury official said. It will lead to a freeze in global financial markets," said Muehleisen, now a fellow with the Atlantic Council. G7 counterparts will question Yellen "about the financial stability risks in the U.S., the regional banks' exposure to commercial real estate. Real risks that are not manufactured for political posturing," said Stephanie Segal, a former U.S. Treasury official who is a senior fellow at the Center for Strategic and International Studies in Washington. The far more complicated "Pillar 1" plan to allow countries to tax global technology giants and other highly profitable corporations on their local sales is still under negotiation.

SummarySummary Companies Q1 investment bank sales up 20%Trading activity outperforms peersConfirms 2025 targetsPARIS, May 10 (Reuters) - Credit Agricole SA (CAGR.PA), France's second-biggest listed bank, posted better-than-expected earnings on Wednesday, as market volatility boosted trading revenue. This helped drive Credit Agricole's quarterly sales to 6.12 billion euros ($6.74 billion), up 9.6% from a year earlier, while net income more than doubled to about 1.23 billion euros. Both figures beat market expectations of 5.9 billion euros and 816 million euros, respectively, according to an analyst consensus compiled by the company. Deposit levels were stable in the quarter from a year earlier for the group, Credit Agricole said. The cost of risk -- money set aside for failing loans -- fell to 374 million euros, as concerns linked to the war in Ukraine subsided.

☆ Stablecoin Tether's reserves hit $81.8 billion in Q1 - reserves report
▼ + stars: | 2023-05-10 | by ( ) www.reuters.com time to read: +1 min

LONDON, May 10 (Reuters) - Stablecoin Tether's reserves were worth $81.8 billion at the end of the first quarter, according to a reserves attestation on Wednesday, up around $14.8 billion from the previous quarter. Tether's reserves include $53 billion of U.S. treasuries, the report said, up from $39.2 billion at the end of 2022. They also include $1.5 billion worth of bitcoin and $5.3 billion worth of loans which the report said are "over-collateralized". A repo, short for repurchase agreement, refers to when financial institutions use U.S. Treasuries and other high-quality securities as collateral to raise cash, often overnight. Reporting by Elizabeth Howcroft and Hannah Lang; Editing by Alison WilliamsOur Standards: The Thomson Reuters Trust Principles.

REUTERS/Brendan McDermidTOKYO, May 9 (Reuters) - A gauge of global equities fell on Tuesday after weak Chinese trade data sparked concerns about China's domestic demand recovery, while the impasse over the U.S. debt ceiling sparked a sharp sell-off in short-dated Treasury bills. Investors fear a government default if Congress fails to resolve the debt ceiling deadlock as early as June 1. Longer-dated Treasury yields were little changed as investors waited for key U.S. consumer price inflation data on Wednesday. The dollar edged higher against major currencies, with the dollar index up 0.256%. Gold prices edged higher as some investors sought cover from economic uncertainty, including the debt ceiling deadlock.

☆ PacWest leads losses in regional bank stocks
▼ + stars: | 2023-05-09 | by ( ) www.reuters.com time to read: +2 min

May 9 (Reuters) - Shares of PacWest Bancorp (PACW.O) looked set to lead declines in U.S. regional lenders at market open on Tuesday as investors feared the ongoing banking crisis could deepen. The KBW Regional Banking Index (.KRX) hit a 30-month low last week after the collapse of First Republic Bank and PacWest's decision to explore strategic options. PacWest and Western Alliance, which have been at the heart of the sell-off in regional banks, saw the steepest decline in deposits in the first quarter after First Republic, according to S&P Global Market Intelligence data. Western Alliance (WAL.N) dropped 1.5%, while First Horizon Corp (FHN.N) and Zion Bancorp (ZION.O) dipped 0.1% and 0.3%, respectively, with Arfstrom noting that the pullback in banks shares overall have made their valuations attractive. Wall Street executives and bank analysts last week called on regulators to quickly provide more protection for bank deposits and consider other backstops, arguing only an intervention could stop the crisis.

☆ Yellen says pressures remain on some U.S. regional bank stocks but system sound
▼ + stars: | 2023-05-09 | by ( ) www.reuters.com time to read: +1 min

[1/2] U.S. Treasury Secretary Janet Yellen discusses "U.S.-China Economic Relationship" during a forum hosted by the Johns Hopkins University at the Nitze Building in Washington, U.S., April 20, 2023. REUTERS/Sarah SilbigerWASHINGTON, May 8 (Reuters) - U.S. Treasury Secretary Janet Yellen said on Monday that some regional bank stock prices remained under pressure, but deposits had stabilized and regulators stood ready to use the same tools used in recent bank rescues if more contagion fears arose. Yellen told CNBC in a live interview that some of the selling of bank shares was due to earnings strain, but added that the "bar is pretty high" for imposing any controls on short selling of bank stocks. But short selling more broadly, the bar is pretty high to put controls on," Yellen said. Reporting by David Lawder and Andrea Shalal; Editing by Jamie FreedOur Standards: The Thomson Reuters Trust Principles.

☆ A chief economist who called the 2008 housing crisis says home prices are set to drop another 15% as falling mortgage rates and a recession will create a supply-demand imbalance
▼ + stars: | 2023-05-09 | by ( William Edwards | ) www.businessinsider.com time to read: +5 min

This will drag 30-year mortgage rates — which track closely with 10-year Treasury rates because they typically have a lifespan of around 12 years — down to 6% or lower. One might argue that falling mortgage rates would also stimulate demand enough to meet the rise in supply, holding prices relatively steady. Now that's quite striking because mortgage rates are no longer at peak, but mortgage applications are still falling. Tight monetary policy and a pullback in lending will lead to a cooling labor market, he said, and that's bad for housing demand. Below is the National Association of Realtors' Housing Affordability Index, which takes into account incomes, home prices, and mortgage rates.

The dollar remained relatively weaker against most of its major peers, even as the dollar index rose 0.059% and the euro fell 0.15% to $1.1002. Friday's robust U.S. payrolls report prompted investors to dial back their expectations for the timing and size of the Fed's first interest rate cut. The two-year Treasury yield, which typically moves in step with interest rate expectations, rose a touch above 4.0%. The dollar rose 0.18% against the yen. Bullion regained ground after a sharp retreat in the previous session, ahead of the inflation data that could shed light on the outlook for U.S. interest rates.

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