And so we draw to the end of another frantic week in the markets.
CBOE VIX Index VIX,
The gauge of equity volatility jumped to 30 twice before falling back down.
The ICE BoAML MOVE Index, a VIX for the Treasury market, rose to its highest level since the Great Financial Crisis of 2008, rising more than 80% since the beginning of February.
Those moves reflected whipsaw action in stock and bond yields as traders tried to weather the severity of the unfolding banking crisis and how much central banks’ ability to maintain their inflation-fighting strategies would be compromised.
Concerns that financial sector shocks would hit the global economy hard – and some long positions – also led to a decline in oil prices.
Still, the stock market edged higher on Thursday, and Friday’s tone was, at least on the surface, calm as investors appeared to be saluted by the authorities arranging support for Credit Suisse CS.,
and First Republic FRC
in America.
But wait.
Source: City.
The Federal Reserve is having to expand its balance sheet again as it reported late Thursday that banks this week used its new bank term funding program to borrow $11.9 billion. In addition, $153 billion was borrowed through the Fed’s discount window and $142.8 billion in bridge loans.
The market does not know who these borrowers are and how desperate they are.
And others are concerned that recent actions to help the banking sector are not only filling the cracks but possibly making things worse.
Hedge fund manager Bill Ackman is not pleased that systemically important banks (SIBs) have been tasked with recycling deposits they received from First Republic Bank (FRB) into the struggling lender.
“The result is that FRB default risk is now spreading to our largest banks. It is bad policy to spread the risk of financial contagion to gain a false sense of confidence in FRBs. SIBs would never have invested in deposits with such low returns Unless they are pressurized to do so and without assurance that FRB deposits will be held back in case they fail. Ackman wrote in a tweet Thursday late night.
“The press release announcing the $30B deposit raised more questions than it answered. The lack of transparency has caused market participants to feel the worst. I have said before that hours matter. We have let days go. Believe Half-measures do not work when there is a crisis.
Ackman, who runs Pershing Square Capital Management, and is not averse to an apocalyptic outbreak, said the banking sector urgently needed a temporary deposit guarantee until an expanded government insurance scheme was widely available.
“We need to stop this now. We are past the point where the private sector can solve the problem and it is in the hands of our government and regulators. Tick-tock.”
Market
S&P 500 Futures ES00
The 10-year Treasury yield rose 0.1% as BX:TMUBMUSD10Y
fell 4.2 basis points to 3.542%. Dollar Index DXY
Gold down 0.3%, helped lift GC00
It rose 0.7% to $1,936 an ounce.
Try your hand at the Baron’s Crossword Puzzle and Sudoku game, now running daily with weekly digital puzzles based on the week’s cover story. To see all the puzzles, click Click here,
the buzz
US economic data today includes February industrial production and capacity utilization, published at 9:15 a.m., followed by the February Key Economic Indicators Index at 10 a.m. and the Consumer Sentiment report for March. Eastern all the time.
It’s another Quadruple Magic Friday, with $2.8 trillion worth of options contracts about to expire.
Anyone buying First Republic’s stock FRC
The selling could have been around 60% for the day at Thursday’s open and close. The rebound came after a consortium of big banks pledged $30 billion in deposits to the lender. However, shares were down 5% by the opening bell on Friday after First Republic said it would have to suspend its dividend to conserve cash.
FedEx Shares FDX
Package Deliver is up 11% in premarket action following results that show cost-cutting and the ability to raise prices were helping its bottom line.
Share in Sarepta Therapeutics SRPT
falling 20% when the FDA said it would hold an advisory committee on the company’s Duchenne muscular dystrophy treatment.
best of the web
Inside Elon Musk’s Cost-Cutting Drive at Twitter,
Incredible tantrum thrown at VC SVB,
chart
Here’s CNN’s Fear and Greed Index. It is a compilation of seven indicators: market momentum, stock price strength, stock price breadth, put and call options, junk bond demand, market volatility, and safe haven demand.
Eagle-eyed readers may note that this week it dropped to ‘Extreme Fear’ – below the 25 line – before jumping back to just ‘Fear’. The last time the chart fell this far was in October 2022, marking a recent low for the S&P 500.
Source: CNN
top ticker
Here were the most active stock-market tickers on MarketWatch at 6 a.m. Eastern.
|
anchor |
security name |
|
TSLA |
Tesla |
|
FRC |
First Republic Bank |
|
BBBY |
bed Bath and Beyond |
|
gme |
Gamestop |
|
AMC |
amc entertainment |
|
the hub |
hub cyber security |
|
NVDA |
NVIDIA |
|
C |
Credit Suisse ADR |
|
AAPL |
Apple |
|
TRCA |
troika media |
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