Stock market today: live updates

Rivian Automotive stock drops to all-time low

Rivian Automotive hit an all-time low during Monday’s trading session, dropping below $13.20 per share, after a Rivian spokeswoman said the company is in talks with Amazon to adjust their exclusivity agreement for the EV maker’s electric delivery trucks. 

The stock is down more than 2.7% in Monday’s session. 

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Shares are down more than 28% so far this month.

Rivian and Amazon entered into an agreement in 2019 to produce 100,000 electric trucks for the online retailer, but Amazon’s order of 10,000 trucks for 2023 came in at the “low end of a previously provided range,” The Wall Street Journal first reported on Monday. 

Eliminating the exclusivity clause of their agreement would allow Rivian to attract new customers as it ramps up production of Amazon vans and its R1 series pickup and SUV, as well as a forthcoming R2 model, CNBC reported earlier today. 

— Pia Singh

Market implies some are fearful a recession could be coming, Deutsche Bank strategist says

Monday’s market infers that some are fearing a domestic recession is about to start, Deutsche Bank research strategist George Saravelos wrote in a note to clients on Monday. 

“We are now pricing in Fed cuts rather than hikes, the yield curve is bull steepening sharply, commodities and equities are down with cyclicals underperforming,” Saravelos wrote. “This is all consistent with an imminent US recession.”

Without certifying that this will happen, Saravelos noted three observations on current market conditions:

  1. With the latest banking crisis, Saravelos wrote that competition for deposits is likely going to intensify in the U.S. banking system moving forward, leading to further tightening in the economy. 
  2. The dollar is “behaving extremely unusually” despite a recession being priced in, according to Saravelos. The greenback is down against the vast majority of G10 and emerging markets, or EM, currencies.
  3. If the dollar stops serving as an investment hedge to underlying risky U.S. asset positions, Saravelos said there will be added pressure on the dollar and on portfolio managers’ asset allocation. Most asset managers over the last decade have constructed portfolios based on a negative correlation between risk appetite and the dollar.

— Pia Singh

Fed likely to keep hiking despite financial system fractures

A popular adage in the market is that once it starts, the Federal Reserve will keep raising interest rates until something breaks. But even with the recent turmoil in the banking industry, markets largely expect the Fed to keep hiking.

“Is this enough to qualify as the kind of break that would have the Fed pivot? The market overall doesn’t think so,” Quincy Krosby, chief global strategist at LPL Financial, said of the recent collapses of Silicon Valley Bank and Signature Bank.

Markets in fact were pricing in about a 75% chance of a quarter percentage point increase when the Fed meets next week, according to CME Group data.

Goldman Sachs was an outlier in predicting that policymakers would take a brief pause then resume hiking once conditions get more stable. Economists at both Citigroup and Bank of America said they expect more increases.

Holding off a rate hike “would invite markets and the public to assume that the Fed’s inflation fighting resolve is only in place up to the point when there is any bumpiness in financial markets or the real economy,” Citigroup economist Andrew Hollenhorst said in a client note.

—Jeff Cox

Markets are ‘compartmentalizing the financial carnage,’ says Vital Knowledge

Adam Crisafulli of Vital Knowledge noted that the broader market is keeping the declines in regional banks contained to that sector.

“The vertiginous collapse in financial stocks is breathtaking, but equally impressive is the broader market’s ability to compartmentalize the financial carnage,” Crisafulli wrote Monday.

“The lack of contagion comes down to three main factors: 1) the post-Lehman changes … act as a circuit breaker, preventing trouble at one institution from inflecting the whole industry; 2) the Sunday night actions taken by the Fed, FDIC, and Treasury provided reassurances to regional bank depositors (although not regional bank shareholders); and 3) the plunge in yields provides a huge tailwind for equity valuations,” he said.

— Fred Imbert

Stocks are up as investors enter final hour of trading

The three indexes were up as investors entered the final hour of the trading day.

The Dow was up 0.4%, while the S&P 500 and Nasdaq Composite each added 0.6% and 1.2%, respectively.

Despite each trading down earlier in the session, the indexes advanced investors bet that the fallout around Silicon Valley Bank and Signature Bank could push the Federal Reserve to change course on interest rate hikes.

— Alex Harring

Citi upgrades PNC shares to buy

Analyst Keith Horowitz upgraded PNC shares to buy from hold. He reiterated his price target of $175, implying more than 27% upside from Friday’s close price.

“PNC is a high quality franchise with a strong management team and given the recent pullback we view this as an attractive entry point,” Horowitz wrote in a note on Monday. 

The analyst added that the regional bank “has a number of positives including larger benefit than most peers on fixed asset repricing tailwinds, screens well on our fair value analysis, clean asset quality, and strong deposit base.”

CNBC Pro subscribers can read more about his upgrade here.

— Hakyung Kim

Utilities leads S&P 500 in best day since November

Utilities stocks are among those performing best within the S&P 500 and are on track for their best day since November.

The sector was last up 2.2%, which is the best day for the stocks since Nov. 30. WEC Energy Group performed the best within the sector with a 4.3% gain, followed by Xcel Energy at a 3.7% advance.

It’s one of seven of the broad index’s 11 sectors that’s on pace to see gains for Monday’s session. Real estate followed as the second-best performer so far, up 2%.

Financials continued to drag, down 2.5%. Energy was next worst-performing sector at 1.1% in the red.

— Alex Harring, Fred Imbert

Two banking ETFs slump to lowest levels since 2020

A pair of banking exchange-traded funds each slid to their lowest levels since Nov. 6, 2020 as shares of regional banks dropped amid deposit flight fears.

The SPDR S&P Regional Bank ETF (KRE) shed more than 9% midday Monday, while the SPDR S&P Bank ETF (KBE) dropped more than 7%.

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Two bank ETFs slump to lowest levels since 2020

Notable losers include First Republic Bank, which tanked more than 62%, despite the institution having received additional liquidity from the Federal Reserve and JPMorgan Chase on Sunday. Western Alliance shares also plummeted 55%; the bank said in a regulatory filing that it had taken “additional steps” to strengthen its liquidity position. PacWest shares were down more than 30%. Trading in many bank stocks was halted repeatedly for volatility throughout the day.

Darla Mercado, Gina Francolla

Davidson upgrades Prosperity Bancshares, says it has ‘fortress-like balance sheet’

Davidson upgraded Prosperity Bancshares to buy from neutral on Monday, naming the Houston-based bank holding company a defensive play with a “fortress-like balance sheet.” 

In a note to clients on Monday, analyst Peter J. Winter noted that Prosperity is trading at its 52-week low after the failures of Silicon Valley Bank and Signature Bank, which the firm believes has no bearing on Prosperity Bancshares. 

“Given the increased risks of a deeper recession, PB is a great defensive stock given its low risk balance sheet, strong deposit franchise, and peer leading capital ratios,” Winter wrote. He added that the company maintains a high level of fixed rate assets that will reprice at much higher rates over the next 12 to 24 months. 

The firm left its price target per share of $79 unchanged, suggesting the stock stands to gain more than 23% from Friday’s closing price. Prosperity’s stock price is down more than 2% in Monday’s session, marking low not seen since 2020.

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Prosperity shares

Some regional bank stocks buck sector downtrend

Not every regional bank stock is taking the heat from the fallout of Silicon Valley Bank’s collapse.

A handful of regional bank stocks bucked the broader sector’s downtrend on Monday. That included shares of United Bankshares and Washington Federal, last up 5.2% and 3.8%, respectively. Valley National Bancorp shares gained 3.6%.

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United Bankshares rise

Citi upgrades Charles Schwab

The recent pullback in Charles Schwab shares presents a compelling entry point for investors, according to Citi. 

Analyst Christopher Allen upgraded Schwab shares to buy from neutral, saying that Schwab shares have limited risk of deposit flight risk. 

“We see current valuation levels as a compelling entry point given SCHW’s long-term track record of delivering healthy asset/revenue growth and opportunities for margin expansion in 2024/2025 given current investment levels,” Allen wrote in a Monday note.

CNBC Pro subscribers can read more about his downgrade here.

— Hakyung Kim

Watch value stocks for signals about market fears, strategist says

As markets bounce between gains and losses on Monday, the relative performance of value stocks could be key for determining what investors think is coming next, according to Lauren Goodwin, economist and portfolio strategist at New York Life Investments.

“I’m interested in not only the direction but the tenor of equity market moves,” Goodwin said.

“For example, if we have a strong down day, is that reinforced in growth equity more than value, which would suggest that the market is more concerned about these long duration plays in the technology sector. Or do we see actually value have a harder day, which would suggest that the market is deeply concerned about recession.”

The pattern would need to play out beyond Monday to show a true trend for the market, Goodwin added.

The Vanguard Value ETF (VTV) was down less than 0.5% in afternoon trading.

— Jesse Pound

Stocks making the biggest midday moves

Financial names were among the biggest stocks making the biggest midday moves.

Here’s a few of them:

  • Shares of regional banks plummeted following the collapse of Silicon Valley Bank and Signature Bank. First Republic sank 64%, and Western Alliance dropped about 57%. PacWest shed 26%. KeyCorp fell nearly 30%, and Zions lost about 24%.
  • Shares of major banks also saw losses after the closure of the Silicon Valley Bank and Signature Bank. Citi dropped 6%. Bank of America followed at 3% down, while Goldman Sachs lost about 2%.
  • Charles Schwab — The stock sank 10% as part of the broader rout in the banking sector. However, Schwab reassured shareholders and customers that it isn’t seeing any significant outflows and that 80% of its total deposits fall within the FDIC insurance limits. Citi also upgraded the stock to buy from neutral, saying the stock’s recent decline gives it a “compelling” risk-reward ratio.

See the full list here.

— Michelle Fox

Bank stock sell-off is overdone, but can’t rule out other banks facing similar concerns, UBS’ Solita Marcelli says

“While some of the selling in certain banks seems overdone, it’s hard to know when the ‘crisis of confidence’ will improve,” said Solita Marcelli, chief investment officer at UBS Global Wealth Management.

At midday, the SPDR S&P Regional Banking ETF was down more than 8%, hitting its lowest level since Nov. 6, 2020. Shares of First Republic were leading the decline. The stock is trading at all-time lows dating back to its December 2010 initial public offering.

Other laggards include Western Alliance, UMB, First Horizon and PacWest, among others.

For investors looking to take advantage of the sell-off, Marcelli recommends a focus on some the largest U.S. bank stocks.

“… Maintaining depositor and investor confidence is crucial for a financial institution, and we cannot completely rule out the possibility that other banks could face similar concerns, despite what appear to be very sound balance sheets across the industry,” she said.

—Christina Cheddar Berk

Western Alliance says it is having ‘moderate’ deposit outflow

Western Alliance President and CEO Kenneth Vecchione said in a statement Monday that the bank is seeing “moderate” deposit outflows in light of the SVB-fueled panic. 

“As of this morning, cash reserves exceed $25 billion and are growing, while deposit outflows have been moderate. Including accounts eligible for pass-through insurance, insured deposits exceed 50% of total deposits,” said Vecchione. 

The CEO also said that “Western Alliance has taken additional steps to strengthen its liquidity position to ensure that we are in a position to meet all of our client funding needs, including increasing our borrowing capacity.”

Western Alliance’s stock is currently halted for trading, after plunging almost 58% on Monday morning.

— Hakyung Kim

Wolfe Research downgrades Tesla due to SVB-related fallout risk

Macroeconomic concerns around Tesla are starting to mount, according to Wolfe Research.

Analyst Rod Lache downgraded Tesla shares to peer perform from outperform. Lache maintained his price target of $185, implying 6% upside from Friday’s close price. 

“Tesla has already had to cut prices quite a bit more than we expected. And we worry that macro challenges are intensifying in ways that could disproportionately affect US EV makers,” Lache wrote in a Monday note.

Tesla has cut prices in recent months to stoke sales, raising concern among some analysts that profits could be under pressure going forward. Now, the company could be hurt by the Silicon Valley Bank failure, Lache said.

CNBC Pro subscribers can read more about his downgrade here.

— Hakyung Kim

Sunday’s event show the U.S. banking system has been nationalized, former Nasdaq CEO says

One thing was made clear by the federal government’s move to backstop Silicon Valley Bank depositors: “The banking model was nationalized,” said Bob Greifeld, former Nasdaq CEO.

“I think the federal government had three options in front of them. One is to find a buyer. … Second was to let the market play out. I personally have three companies that are in financial technology that have all their banking with SVB,” said the chairman of Virtu Financial in a CNBC “Squawk on the Street” interview. “Option third was to take the easy option and backstop everything.”

“In the moment, that feels very good,” Greifeld added. “Over a longer period of time, we have to recognize that we have nationalized banks. The genie is out of the bottle, and anytime a bank runs into trouble … the expectation is the feds will backstop that. And that has long-term implications.”

— Fred Imbert

UBS calls some of recent pullback in bank stocks ‘overdone’

Some of the recent pullback in bank stocks appears overdone as investors adopt a “sell first and ask questions later” mentality, according to UBS.

“Nevertheless, while we remain cautious on US financials with a least preferred view, we believe some of the recent sell-off in banks has been overdone — especially in select universal banks, which remain well capitalized and sufficiently liquid to continue to serve clients,” the bank said Monday.

Going forward, UBS views systematic risks as “unlikely,” viewing the situation at Silicon Valley Bank as “unique” given its focus on venture capital-backed startups.

“While some of the selling in certain banks seems overdone, it’s hard to know when the ‘crisis of confidence’ will improve,” the bank said. “For those investors that do want to take advantage of the sell-off, we recommend focusing on some of the largest US banks.”

— Samantha Subin

Financial stocks stay down in morning trading

Consumer outlook for inflation plunged in February

Near-term inflation expectations plunged in February, possibly giving some relief to the Federal Reserve, according to a survey released Monday.

The New York Fed’s monthly Survey of Consumer Expectations showed that respondents figure the inflation rate to be at 4.2% a year from now. That’s a 0.8 percentage point slide from a month ago.

Within that number, consumer see food prices rising 7.3%, which is a 1.7 percentage point drop from February. Gas prices are seen rising 4.7%, which is a 0.4 percentage point decline.

Median household spending growth expectations, however, declined only slightly to 5.6%, down 0.1 percentage point.

Inflation expectations further out were little changed, with the three-year outlook at 2.7% and the five-yeare outlook at 2.6%.

—Jeff Cox

Banking crisis isn’t over yet. Asset valuation is key, say Shard Capital’s Bill Blain

“This crisis is not yet over. On Friday last week I wrote the crux of this crisis is valuations – what things are actually worth,” Bill Blain, strategist at Shard Capital in London wrote to clients in his daily Morning Porridge note on Monday.

The Silicon Valley Bank “debacle highlights failure and further crisis to come,” Blain noted. “Hard Hats Stay On!”

The coordinated action of the U.S. Treasury, Federal Reserve and Federal Deposit Insurance Corp. Sunday night showed that “failing banks will be allowed to fail – and shareholders and lenders (as opposed to depositors) will be wiped or suffer losses.”

But “It isn’t over yet,” Blain said, citing the age old stock market adage that “there’s never only one cockroach.” 

Looking ahead, the immediate issue is that, “private equity and private debt managers are going to struggle to demonstrate the veracity of their current valuations, meaning they will struggle with margin calls and raising new cash, creating a vicious negative feedback loop on these markets,” Blain wrote.

“If valuations across markets under pressure are wrong, what makes the market believe current liquid market stocks are right? They are just as susceptible to over-optimism and inflation!”

— Scott Schnipper

Wells Fargo upgrades JPMorgan Chase to overweight

Wells Fargo is getting bullish on JPMorgan.

Analyst Mike Mayo upgraded JPMorgan to overweight from equal weight. Mayo also raised his price target to $155 from $148, which implies 16% upside from Friday’s close price. 

“JPM epitomizes our theme of ‘Goliath is Winning,'” Mayo wrote in a client note on Monday. “[It] has excelled at both offense and defense over the past decade in which it has been gaining market share in all major business lines while optimizing its businesses, showing consistent earnings relative to other global banks, and creating a ‘fortress balance sheet’ (as defined by its CEO).”

CNBC Pro subscribers can read more about his upgrade here.

— Hakyung Kim

Defensive names, some tech stocks outperform on Monday

Some technology and defensive stocks outperformed the broader market on Monday.

That included shares of Apple, Microsoft and Alphabet, last up about 1% each. Defensive stocks like Procter & Gamble, Coca-Cola and PepsiCo also gained about 2% each.

In other news, pharmaceutical stocks rose amid news that Pfizer’s acquiring Seagen in a deal worth about $43 billion. Seagen’s stock jumped about 15%, while Pfizer gained about 1.5%. Moderna, Johnson & Johnson and Eli Lilly rose 2.2%, 3.7% and 3.4%, respectively.

— Samantha Subin

Medical device company Insulet to be added to S&P 500, replacing SVB Bank

SVB Bank will be removed from the S&P 500 after the close on Tuesday and will be replaced by medical device manufacturer Insulet Corp.

Insulet shares were up more than 5% in trading shortly after the market opened. The stock has gained more than 31% over the past year, but had been trending downward since the start of 2023. The stock has an average rating of overweight and a price target of $338.40, according to FactSet.

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Insulet shares are down nearly 5% since the start of the year.

—Christina Cheddar Berk

Stocks open lower as market continues responding to latest bank developments

The three major indexes were lower as Monday’s session kicked off, continuing to show impacts from the fallout around Silicon Valley Bank and Signature Bank.

The Dow was down 0.4% shortly after the market opened. Meanwhile, the S&P 500 and Nasdaq Composite lost 1.2% and 1.1%, respectively.

— Alex Harring

Biden says banking system is safe, calls on Congress to strengthen rules after failures

President Joe Biden said Monday that Americans can be confident that the U.S. banking system is safe after regulators scrambled over the weekend to create a plan to backstop deposits at Silicon Valley Bank and Signature Bank.

“Your deposits will be there when you need them. Small businesses across the country with deposit accounts at these banks can breathe easier knowing they’ll be able to pay their workers and pay their bills,” he said in brief remarks Monday before the market’s open.

Biden stressed that no losses will be borne by the U.S. taxpayers. Also, the management of the banks will be replaced and bank investors will not be protected, he said.

Biden also called on Congress to look for ways to strengthen banking rules to prevent these events from repeating.

—Christina Cheddar Berk

Charles Schwab reassures investors of ‘significant liquidity,’ says more than 80% of deposits within FDIC limits

Charles Schwab is reassuring its shareholders and customers as turmoil hits the broader banking sector, saying in a Monday release that it isn’t seeing significant outflows.

“Client bank sweep cash outflows in February were about $5 billion lower than January and March month-to-date daily average outflows are tracking consistent with February,” the bank said. “Importantly, these outflows reflect a continuation of client decisions to reallocate a portion of their cash into higher yielding cash alternatives within Schwab.”

Schwab also said that more than 80% of its total bank deposits fall within the insurance limits of the FDIC, reassuring clients that it has “access to significant liquidity” and its business is continuing to “perform exceptionally well.”

Schwab shares fell another 7% before the bell, building on its more than 24% loss last week as Silicon Valley Bank’s shutdown rattled the broader sector.

“Our financial performance continues to be strong,” the bank said. “As we look ahead to our first quarter results, we anticipate year-over-year revenue growth of about 10% relative to Q1 2022, with adjusted1 pre-tax profit margin in the 45-47% range.”

— Samantha Subin

Stocks making the biggest moves premarket

Here are the companies making headlines before the bell on Monday:

  • Seagen — Shares soared more than 18% in early market trading on news it will be acquired by Pfizer in a deal worth roughly $43 billion, which will boost Pfizer’s cancer treatment portfolio as it endures a decline in Covid-19 product sales. Pfizer offered $229 in cash per share of Seagen, a 32.7% upside to Friday’s closing price.
  • Illumina — Shares of the biotech company rose 8.2% after The Wall Street Journal reported that billionaire activist Carl Icahn is preparing a proxy fight at Illumina.
  • PacWest Bancorp, Western Alliance Bancorp — Regional lenders PacWest Bancorp’s shares fell by more than 40% while Western Alliance’s stock fell by more than 51%, with both banks stinging from the closure of Silicon Valley Bank and Signature Bank. In an attempt to calm investors, both banks said on Friday that their liquidity and deposits remained strong.

Click here to read more companies making moves before the open.

— Pia Singh

More traders pricing in no rate hike, according to CME Group’s FedWatch tool

More traders are increasingly calling for no rate hike at the Federal Reserve’s policy meeting next week, according to CME Group’s FedWatch Tool.

The odds of no rate change have also risen since last week, with about 27% now calling for no hike. It marks a stark contrast to last week, when many traders were pricing in a 50 basis point hike.

As of early morning Monday, about 73% of traders are betting that the central bank increases rates by 25 basis points.

The shift in rate expectations comes amid the collapse of both Silicon Valley Bank and Signature Bank, a sign that the central bank’s hiking is beginning to pressure the financial sector.

— Samantha Subin

VIX spikes as turmoil hits banking sector

A closely watched measure of fear and stock market volatility is jumping once again in the wake of the turmoil hitting the banking sector.

The CBOE Volatility Index, commonly known as the VIX, jumped more than 4 points on Monday to trade at 29.03, near levels not seen since 2022.

Earlier this year, the index, which weighs implied volatility through S&P 500 options, hit a low of 17.06.

VIX values over 30 typically connect to high volatility and risk.

— Samantha Subin

Gundlach says yield curve steepening is ‘highly suggestive of imminent recession’

DoubleLine Capital CEO Jeffrey Gundlach said the “aggressively steepening” of the Treasury yield curve after a sustained period of inversion is “highly suggestive of imminent recession.”

The gap between the 2-year Treasury yield and the 10-year Treasury rate narrowed 25 basis points on Monday to about 67 basis points. The spread had widened to 100 basis points, the most severe inversion since 1981, just last week before the SVB’s collapse.

The yield curve inversion is a phenomenon that for half a century has accurately signaled coming recessions. Gundlach previously said the 2-year 10-year yield curve started steepening and de-inverting prior to the past four economic downturns.

— Yun Li

Gold prices, related stocks rise

Gold hit a high not seen in around a month.

Gold, which was last up 1.4%, reached a high of $1,899.70. That’s its highest price since Feb. 9, when the metal hit $1,902.30.

The Gold Miners ETF advanced 3% in the premarket for its best day since Jan. 4, when the fund added 4.25%. Harmony Gold helped push the fund up with a 10.8% gain in the premarket, putting it on track for its best day since Nov. 4, when the stock jumped just over 14%.

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— Alex Harring, Gina Francolla

Banks aren’t the only potential ‘blow ups’ ahead, Wolfe Research says

The collapse of Silicon Valley Bank and Signature Bank serves as warning sign not only for banks, but for other potential “blow ups” across markets, according to Wolfe Research.

“As we outlined in our 2023 market outlook report back in December, we see many potential ‘blow ups’ across markets as the global tightening cycle continues,” Chris Senyek, chief investment strategist at Wolfe Research, wrote in a Monday note. “Given SVB’s ties to the industry, perhaps the most obvious is the potential for more downside in cryptocurrencies.”

The strategist said he agreed with bullish investors who say SVB is not a “Lehman-style” episode, given a better capitalized banking sector that has not shown extreme signs of stress. Additionally, the U.S. government stepped in to backstop depositors at SVB.

Regardless, the episode spells trouble ahead for the broader market. Beyond cryptocurrencies, the strategist is especially worried about Treasury market illiquidity.

“SVB also highlights our most serious ‘blow up’ concern — Treasury market illiquidity,” Senyek wrote. “In our view, many other financial institutions outside of regional banks (pensions, insurance companies, etc.) are likely having duration matching issues that could be exacerbated by Treasury market illiquidity.”

— Sarah Min

Bank stocks fall

Bank stocks were under pressure in early premarket trading Monday, as worries grew over the health of the U.S. banking system.

Wells Fargo shares fell 2.1%, while Citigroup lost 1.9%. JPMorgan Chase shares dipped 1%.

Regional banks took a bigger hit, with the SPDR S&P Regional Banking ETF (KRE) dropping 2.4%. First Republic led the losses with a 50% drop. PacWest Bancorp and Western Alliance also lost 29% and 17%, respectively.

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KRE falls

Silicon Valley Bank’s Asian clients detail limited exposure in filings

Some Asia-based clients of Silicon Valley Bank clarified their exposure to the collapsed bank in filings Monday.

Shares of Shanghai Pudong Development Bank fell about 1% in afternoon trade after the joint venture between the bank and SVB said its balance sheet is “independent.”

BeiGene fell nearly 1% after it said its uninsured cash deposits at SVB amounted to about 3.9% of its total as of Dec. 31. The stock later traded slightly higher.

Shares of Mobvista fell about 1% after the company said it has minimal exposure to SVB. The company said a “minimal portion” of its cash was in deposit accounts at the bank, amounting to an aggregate balance of roughly $430,000.

Brii Biosciences said less than 9% of total cash and bank balances were at SVB. Shares of the company were recently sitting about 0.2% lower after paring some of its earlier losses.

Hong Kong-listed shares of Broncus Holding traded 2.86% higher.

The company said its deposit at SVB represents roughly 6.5% of the company’s cash and cash equivalents “and otherwise has no exposure to SVB,” it said.

“The Company is of the view that its exposure due to the SVB incident is immaterial and it does not anticipate the Company’s operating plan or cash runway will be materially affected,” it said.

— Jihye Lee

British bank HSBC to acquire Silicon Valley Bank UK

British bank HSBC will acquire Silicon Valley Bank UK Limited, according to a statement by the Bank of England.

The Bank of England said the action was taken “to stabilise SVBUK, ensuring the continuity of banking services, minimising disruption to the UK technology sector and supporting confidence in the financial system.”

Silicon Valley Bank caused turmoil for the banking sector and markets more widely when it surprised investors on Wednesday with news it needed to raise $2.25 billion to shore up its balance sheet, and that it had sold all its bonds at a $1.8 billion loss.

The bank was then closed by regulators after customers withdrew $42 billion of deposits by the end of Thursday.

HSBC said it will buy SVBUK for £1.

— Hannah Ward-Glenton and Matt Rosoff contributed to this report.

Silicon Valley Bank’s Asian clients detail limited exposure in filings

Some Asia-based clients of Silicon Valley Bank clarified their exposure to the collapsed bank in filings Monday.

Shares of Shanghai Pudong Development Bank fell about 1% in afternoon trade after the joint venture between the bank and SVB said its balance sheet is “independent.”

BeiGene fell nearly 1% after it said its uninsured cash deposits at SVB amounted to about 3.9% of its total as of Dec. 31. The stock later traded slightly higher.

Shares of Mobvista fell about 1% after the company said it has minimal exposure to SVB. The company said a “minimal portion” of its cash was in deposit accounts at the bank, amounting to an aggregate balance of roughly $430,000.

Brii Biosciences said less than 9% of total cash and bank balances were at SVB. Shares of the company were recently sitting about 0.2% lower after paring some of its earlier losses.

Hong Kong-listed shares of Broncus Holding traded 2.86% higher.

The company said its deposit at SVB represents roughly 6.5% of the company’s cash and cash equivalents “and otherwise has no exposure to SVB,” it said.

“The Company is of the view that its exposure due to the SVB incident is immaterial and it does not anticipate the Company’s operating plan or cash runway will be materially affected,” it said.

— Jihye Lee

Goldman Sachs no longer sees case for Fed to hike rates in March

Goldman Sachs no longer sees a case for the Federal Reserve to deliver a rate hike at the Federal Open Market Committee meeting next week, economist Jan Hatzius said in a Sunday note.

“In light of the stress in the banking system, we no longer expect the FOMC to deliver a rate hike at its next meeting on March 22,” Goldman Sachs said in a note.

Hatzius and a team of economists added they still expect to see 25 basis point hikes in May, June and July, reiterating their terminal rate expectation of 5.25% to 5.5%.

— Jihye Lee

Biden tweets regulators reached ‘solution’ that protects’ U.S. financial system

President Joe Biden tweeted that U.S. regulators have reached a “solution” regarding issues related to Silicon Valley Bank and Signature Bank.

“The American people and American businesses can have confidence that their bank deposits will be there when they need them,” he said in a Twitter thread.

“I’m firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again,” Biden wrote in a tweet.

— Jihye Lee

SVB situation is a result of easy monetary policy, Leon Cooperman says

Silicon Valley Bank went under on Friday, and investor Leon Cooperman thinks this situation is a byproduct of low interest rates from the Federal Reserve.

“This is the result of stupid monetary policy of zero-to-negative rates for a decade,” Cooperman, the head of Omega Advisors, told CNBC’s Scott Wapner.

The Fed cut rates to zero to stabilize the economy after the 2008 financial crisis. Rates remained low for years after until the Fed started to raise in the late 2010s. In 2020, however, the central bank brought rates back down to zero as Covid-19 spread around the world.

Over the last year, the central bank has been hiking rates to stem inflationary pressures.

— Fred Imbert

Focus on companies with strong balance sheets, investor says

Investors will have to be a lot more selective going forward, especially after the SVB Financial collapse, said investor Ann Miletti.

Focus on companies with strong balance sheets and free cash flow, “and management teams that have great risk control and experience through difficult times,” Miletti, the head of active equity at Allspring Global Investments, said Sunday during a CNBC special.

Her comments came after regulators announced a plan to backstop Silicon Valley Bank depositors after the bank’s collapse last week.

Regulators are “not going to be available to help out all companies,” she said. “We’ve had a lot of bailouts the last several years, and I think investors are getting pretty used to them. What we have to realize is we’re in a new regime.

“There’s higher rates, higher inflation, and we’re going to see bankruptcies happen. There’s not going to be bailouts for everyone,” Miletti added.

— Fred Imbert

Regulators promise access to deposits starting Monday

Regulators scrambled to avert a banking crisis over the weekend, with one key objective being “strengthening public confidence” in the U.S. banking system.

A joint statement from Treasury Secretary Janet Yellen, Federal Reserve Chair Jerome Powell and FDIC Chairman Martin Gruenberg said depositors at Silicon Valley Bank and New York’s Signature Bank will have access to all of their money as soon as Monday.

“No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer,” they said.

—Christina Cheddar Berk

Regulatory backstop for SVB failure aimed at protecting the economy, officials say

Treasury Secretary Janet Yellen, Federal Reserve Chair Jerome Powell and FDIC Chairman Martin J. Gruenberg issued a joint statement Sunday night explaining their reasoning for devising a plan to backstop depositors and protect financial institutions with money at Silicon Valley Bank.

“We are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system,” the statement said. “This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.”

Silicon Valley Bank failed Friday, marking the biggest bank failure since the 2008 financial crisis. This then raised concern over other banks that could be seeing similar risks.

“The U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry,” the officials said in a statement.

“Those reforms combined with today’s actions demonstrate our commitment to take the necessary steps to ensure that depositors’ savings remain safe,” they added.

— Fred Imbert

Cryptocurrencies jump with stock futures, even after closure of Signature Bank

Crypto climbed with stocks as U.S. regulators unveiled a plan to assure depositors at Silicon Valley Bank would get their money after the bank’s spectacular collapse Friday.

Bitcoin and ether each jumped about 7% after 6:30 p.m. ET, according to Coin Metrics.

The moves came even as New York’s Signature Bank was closed by the New York State Department of Financial Services Sunday, according to a joint statement by the Treasury, Federal Reserve, and FDIC.

Signature Bank was another famously crypto-friendly institution and the next biggest one next to Silvergate, which announced its impending liquidation last week.

Its closure adds to fears by crypto investors and entrepreneurs that the industry is being de-risked from the U.S. banking system, leaving it without “on-ramps” that allow fiat money to flow into crypto assets. Silvergate and Signature helped solve this problem by creating easy banking services and payment platforms for crypto companies.

Wall Street analysts Friday had maintained buy ratings on Signature Bank, despite the bad news about its peers earlier in the week.

— Tanaya Macheel

Gold hits highest level in more than a month as uncertainty over SVB’s uncertainty

Gold futures for April delivery popped more than 1% in early trading, reaching their highest levels since Feb. 9. The precious metal, often seen as a safe haven in times of market volatility and uncertainty, was last at $1,896 per ounce.

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— Fred Imbert, Gina Francolla

Futures jump after regulators announce backstop of SVB depositors

Futures extended their gains just before 6:30 p.m. ET after U.S. regulators unveiled a plan to stem the damage from Silicon Valley Bank’s collapse.

Dow futures were last higher by 297 points, or 0.9%. S&P 500 futures jumped 1.1% and Nasdaq Composite futures advanced 1.2%.

— Tanaya Macheel

SVB’s demise highlights ‘deteriorating’ conditions for tech and biotech companies, Trivariate Research says

“This is going to be a bad stretch for equities, with multiple contraction likely until more of the overall the non SVB-issues are understood,” Trivariate Research’s Adam Parker wrote in a research note Sunday.

Parker had already downgraded health-care stocks at the beginning of the year, but now he’s even more cautious on biotechnology stocks and he’s underweight technology.

SVB’s demise points to “deteriorating” underlying conditions for biotech and select tech companies, he said. The declining deposit base at SVB is an illustration of “decelerating fundamentals in these parts of the economy.”

Parker also said it’s “prudent” to sell financials because some companies will be taking another look at their banking exposure, which could lead to further instances of big withdrawls as soon as Monday.

—Christina Cheddar Berk

Ed Hyman says Fed should pause rate hikes amid SVB shock

First Republic says its ‘capital remains strong’

First Republic Bank said in a letter to clients on Sunday that its “capital remains strong” and “significantly higher than regulatory requirements.”

“We stand ready to process transactions and wires, fund loans, answer questions and serve your overall financial needs – as we do every day,” the letter said.

First Republic caters to high-end clients and businesses, and has a below average level of retail deposits as percentage of its assets — though not to the extent that SVB did.

The letter, from executive chairman Jim Herbert and CEO Mike Roffler, said that First Republic has over $60 billion of available borrowing capacity at the Federal Home Loan Bank and the Federal Reserve. The bank had $176 billion in total deposits as of Dec. 31.

Shares of the bank fell nearly 15% on Friday.

— Jesse Pound

PNC decides not to bid on Silicon Valley Bank

PNC Financial Group has decided against bidding on Silicon Valley Bank as regulators struggled to find a buyer for the failed bank’s assets, according to a source familiar with the matter.

The Pittsburgh, Penn.-based bank sent an initial notice of interest to the Federal Deposit Insurance Corp for a deal for SVB and held brief and preliminary discussions with the agency, the source said. However, after conducting initial due diligence, PNC informed the FDIC on Saturday that it decided not to move forward, the source said.

— Yun Li

SVB failure could mean Fed ends tightening cycle sooner, Ed Yardeni says

Wall Street veteran Ed Yardeni said in a note that the Silicon Valley Bank’s failure could lead the Federal Reserve to wrap up its rate hiking campaign sooner than expected.

“If the Silicon Valley Bank run is that something, it could mean tightening ends sooner and bond yields have peaked,” wrote the president of Yardeni Research. “We can’t say for sure that’s the case but can say the debacle should keep the tech sector mired in its rolling recession for longer.”

“While the SVB crisis doesn’t change our economic and stock market outlooks for now, it adds uncertainty until resolved in a way that minimizes systemic shock,” he added.

Ed Hyman of Evercore ISI echoed Yardeni’s remarks, noting that it “might be a good idea for the Fed to pause.”

“If the Fed were to pause and inflation were to accelerate, they could easily tighten again,” Hyman said.

— Fred Imbert

Stock futures open higher

Stock futures opened higher on Sunday evening as investors awaited details on the next steps in the Silicon Valley Bank crisis.

Futures tied to the Dow Jones Industrial Average added 134 points, or 0.4%. S&P 500 futures advanced 0.6% and Nasdaq 100 futures rose 0.5%.

— Tanaya Macheel

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