And so we come to the end of another hectic week in the market.
CBOE VIX Index
VIX
,
a measure of stock volatility, which twice rose to 30 before falling back.
The ICE BoAML MOVE VIX index for the Treasury market rose to its highest level since the Great Financial Crisis of 2008, at one point over 80% since early February.
The moves illustrated the frenzy in stock and bond yields as traders tried to gauge the severity of the unfolding banking crisis and how much it would jeopardize central banks’ ability to maintain their anti-inflation strategy.
Worries that financial sector shake-ups would have a bad impact on the global economy – and some over-long investments – also caused oil prices to fall.
However, the stock market rose on Thursday, and the tone of Friday is calm, at least on the surface, as the authorities organizing the Credit Suisse support seem to be calm investors.
CS
,
and the First Republic
FRC
Stateside.
But wait.
The Federal Reserve is facing yet another expansion of its balance sheet after it announced late Thursday that banks used the new Bank Term Funding Program this week 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 or how desperate these borrowers may be.
Others worry that recent moves to help the banking sector are not just covering the cracks, but may be making the situation worse.
Hedge fund manager Bill Ackman is not happy that systemically important banks (SIBs) have been forced to recycle deposits they received from First Republic Bank (FRB) back into the troubled lender.
“The result is that FRB’s default risk is now spread across our largest banks. Spreading the risk of financial contagion to create false confidence in the FRB is bad policy. SIBs would never have made such a low return investment in deposits unless they were pressured to do so and without the guarantee that FRB deposits would be blocked if it failed. Ackman wrote in a tweet late Thursday.
“The press release announcing the $30 billion in deposits raised more questions than it answered. The lack of transparency makes market participants assume the worst. I’ve said before that emotions matter. We’ve let the days pass. Half-measures don’t work when there’s a crisis of confidence,” he added.
Ackman, who runs Pershing Square Capital Management and is not opposed to an apocalypse, said the banking sector needed temporary deposit protection immediately until an expanded government insurance system is widely available.
“We have to stop this now. We’re past the point where the private sector can solve the problem and we’re in the hands of our governments and regulators. Tikki-jacket.”
Fair
S&P 500 futures
ES00
rose 0.1% in 10-year Treasury yields
TMUBMUSD10Y
fell 4.2 basis points to 3.542%. Dollar index
DXY
lost 0.3%, helping to lift gold
GC00
0.7% to $1,936 an ounce.
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Drone
Today’s US Economic data includes February industrial production and capacity utilization, released at 9:15 a.m., followed by the March-February leading economic indicators and consumer sentiment report at 10:00 a.m. All times in the east.
It’s quadruple Black Friday again, with $2.8 trillion worth of options expiring.
Anyone who buys shares of First Republic
FRC
open on thursday and at closing time sales could have made about 60% for the day. The recovery came after a consortium of major banks pledged $30 billion in deposits to the lender. However, shares are down 5% through Friday’s opening bell, after First Republic said it had to suspend its dividend to save money.
FedEx shares
FDX
are up 11% in premarket action after the package supplier delivered results that showed cost-cutting and the ability to raise prices helped its bottom line.
Sarepta Therapeutics shares
SRPT
are down 20 percent after the FDA announced it would hold an advisory committee on the company’s Duchenne muscular dystrophy treatment.
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Chart
Here’s CNN’s Fear & 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 into the “Extreme Fear” category – below the 25 mark – before reverting back to just plain fear. The last time the chart fell this low, in October 2022, it marked a recent low for the S&P 500.
The best tickers
Here were MarketWatch’s Most Active stock prices as of 6 a.m. ET.
| Ticker | Security name |
|
TSLA |
Tesla |
|
FRC |
First Republic Bank |
|
BBBY |
Bed Bath & Beyond |
|
GME |
GameStop |
|
AMC |
AMC Entertainment |
|
HUBC |
Hub Cyber Security |
|
NVDA |
Nvidia |
|
CS |
Credit Suisse ADR |
|
AAPL |
Apple |
|
TRKA |
Troika Media |
Random readings
Rolls-Royce and a nuclear powered moon base.
The Spanish princess wears camouflage for three years.
Rival Colorado towns fight over a frozen dead man.
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