The fallout from SVB’s collapse is unlikely to stop interest rates from rising, analysts say
April LaRusse, head of investment specialists at Insight Investment, says there is still “far too much” inflation.
Banks are now incredibly cheap, but see no massive upside amid low growth, CIO claims
Patrick Armstrong, chief investment officer at Plurimi Wealth LLP, discusses the latest in the SVB fallout and where both the Fed and investors could go from here.
Investors must assess the banks’ net interest margins in the wake of SVB’s fallout, says investment director
Russ Mould, chief investment officer at AJ Bell, weighs in on the breakup of Silicon Valley Bank.
European banks at the bottom of the Stoxx 600 index; BAWAG fell 9%, Commerzbank fell 8%
British bank HSBC acquires Silicon Valley Bank UK
British bank HSBC will acquire Silicon Valley Bank UK Limited, according to a statement from the Bank of England.
The Bank of England said the action was taken “to stabilize SVBUK, ensure the continuity of banking services, minimize disruption to the UK technology sector and support confidence in the financial system.”
Silicon Valley Bank caused turmoil for the banking sector and markets more broadly when it surprised investors on Wednesday with news that it needed to raise $2.25 billion to shore up its balance sheet and that it had sold all of its bonds at a loss of $1.8 billion dollar.
The bank was then closed by regulatory authorities after customers withdrew $42 billion in deposits by the end of Thursday.
HSBC said it will buy SVBUK for £1.
— Hannah Ward-Glenton and Matt Rosoff contributed to this report.
CNBC Pro: Shares of this little-known global chip firm will rise 50%, Barclays says
Shares in a British technology company that designs custom chips and semiconductors are expected to rise more than 50% over the next 12 months, according to Barclays Equity Research.
The investment bank said a fast-growing data center space would “drive sales and earnings growth faster than other companies in our coverage.”
CNBC Pro subscribers can read more about the semiconductor stock here.
— Ganesh Rao
SVB’s situation is a result of simple monetary policy, says Leon Cooperman
Silicon Valley Bank went under on Friday, and investor Leon Cooperman believes this situation is a byproduct of low interest rates from the Federal Reserve.
“This is the result of stupid monetary policy with zero-to-negative interest rates for a decade,” Cooperman, head of Omega Advisors, told CNBC’s Scott Wapner.
The Fed cut interest rates to zero to stabilize the economy after the 2008 financial crisis. Interest rates remained low for several years afterward until the Fed began raising them in the late 2010s. In 2020, however, the central bank cut interest rates back to zero as Covid-19 spread across the world.
Over the past year, the central bank has raised interest rates to dampen inflationary pressure.
— Fred Imbert
CNBC Pro: ‘Unprecedented Growth’: Citi Reveals Its Top 4 Renewable Energy Stocks Right Now
The world is going through a “rapid and transformative shift” when it comes to energy, Citi said, citing four buy-rated stocks as “top picks” in the space.
CNBC Pro subscribers can read more here.
— Weizhen Tan
Regulators promise access to deposits from Monday
Regulators sought to avert a banking crisis over the weekend, with a main goal of “strengthening public confidence” in the U.S. banking system.
A joint statement from the Minister of Finance Janet Yellenchairman of the Federal Reserve Jerome Powell and FDIC Chairman Martin Gruenberg said depositors at Silicon Valley Bank and New York’s Signature Bank will have access to all their money as soon as Monday.
“No losses associated with the resolution of Silicon Valley Bank will be borne by taxpayers,” they said.
—Christina Cheddar Berk
Futures jump after regulators announce backstop for SVB depositors
Futures extended gains just before 6:30 PM ET after U.S. regulators unveiled a plan to stem the damage from the collapse of Silicon Valley Bank.
Dow futures were last higher by 297 points, or 0.9%. S&P 500 futures rose 1.1% and Nasdaq Composite futures rose 1.2%.
— Tanaya Machel
European markets: Here are the opening calls
European markets is headed for a higher open Monday as investors keep an eye on the fallout from the Silicon Valley Bank crisis.
Britain’s FTSE 100 index is expected to open 10 points higher at 7,745, Germany’s DAX 82 points higher at 15,477, France’s CAC up 26 points to 7,228 and Italy’s FTSE MIB up 21 points at 27,312, according to data from IG.
The revenue will come from Direct Line and there are no major data releases.