Morning Preview: March 13, 2023

Early Look

Monday, March 13, 2023









S&P 500










U.S. futures are mixed, bouncing initially overnight after the Federal Reserve announced a new emergency loan program for banks after three banks collapsed the last few days. Silicon Valley Bank (SIVB) once the 16th-largest bank in the U.S. was shut by the FDIC on Friday, crypto-friendly bank Silvergate Bank (SI) collapsed early last week, and Signature Bank (SBNY) was closed by State authorities on Sunday. U.S. futures bounced following the news as did crypto assets initially (Bitcoin +10% above $22K). The Fed’s new emergency loan program will help assure banks can meet needs of all their depositors, according to a statement. Under the program, banks and other lenders will be able to pledge Treasurys and mortgage-backed securities for cash, the Fed said. Treasury yields tumble along with the dollar as rate hike expectations by the Fed dwindle due to recent banking situation. Shares of financials/banks are under significant pressure again this morning (FRC, SCHW, PACW, WAL).


Another bank failed and was closed by federal authorities this weekend as State authorities closed New York-based Signature Bank (SBNY) on Sunday. The move came after stocks tumbled Friday as tech-focused bank lender Silicon Valley Bank (SIVB) was shut down by the FDIC after losses in its bond portfolio, the second largest bank failure in U.S. history with over $170B in assets (Washington Mutual in 2008 with over $300B in deposits was the largest), after trading at $200 per share just 24-hours prior to the closure. The fears of contagion rattled the regional bank sector as the KBW bank index falls 16% in worst weekly drop since March 2020 and the KRE Regional bank sector fell to 2-year lows. The unintended consequence of SVB failure is that more companies will hold less cash at the banks and move them into short term treasuries (higher yields), shielding them from being an uninsured depositor (and in turn reduces deposits in smaller banks). The CBOE Volatility Index (VIX) closed at a 3-month high, rising 2.19 points at 24.80 after approaching 30 earlier in the day (at 27 now). After massive losses Thursday and Friday, the S&P 500 fell 4.55% on the week, the Dow lost -4.44%, the Nasdaq declined and the Smallcap Russell 2000 tumbled -8.4%. Can the S&P 500 break out of this 7-month range if we see a negative reaction to CPI, more banks begin to fail, and interest rates continue to rise? Note the October lows stand around 3,500 for the S&P 500.


In Asian markets, The Nikkei Index dropped -311 points to 27,832, the Shanghai Index rose 38 points to 3,268, and the Hang Seng Index gained 376 points to 19,695. In Europe, the German DAX is down -2.65% or 400 points to 15,000, while the FTSE 100 slides over -2% to 7,583.


Market Closing Prices Yesterday

·     The S&P 500 Index dropped -56.73 points, or 1.45%, to 3,861.59.

·     The Dow Jones Industrial Average fell -345.22 points, or 1.07%, to 31,909.64.

·     The Nasdaq Composite slumped -199.47 points, or 1.76%, to 11,138.89.

·     The Russell 2000 Index declined -53.88 points, or 2.95% to 1,772.70.


Economic Calendar for Today

·     10:00 AM ET         Employment Trends for Feb


Earnings Calendar:

·     Earnings Before the Open: CRIS MYO ZEV

·     Earnings After the Close: CDMO GETY GTLB HEAR OMER OPTT SPRO TTOO


Other Key Events:

·     Loop Capital 2023 Investor Conference, 3/13-3/14, in New York

·     Mizuho Annual Energy Summit, 3/12-3/14, in Napa Valley, CA

·     MKM Roth 35th Annual Conference, 3/12-3/14, in CA

·     Oppenheimer Annual Healthcare Conference (virtual), 3/13-3/15





















10-Year Note





World News

·     The following statement was released by Secretary of the Treasury Janet L. Yellen, Federal Reserve Board Chair Jerome H. Powell, and FDIC Chairman Martin J. Gruenberg: Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system. 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.

·     After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank (SIVB), Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.

·     We are also announcing a similar systemic risk exception for Signature Bank (SBNY), New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.

·     Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law. Finally, the Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions to help assure banks can meet the needs of all their depositors.


Sector News Breakdown


·     Under Armour (UA) downgraded to Neutral from Overweight at JPMorgan.


Energy, Industrials and Materials

·     Saudi Arabia’s Public Investment Fund was close to selecting Boeing (BA) as the initial aircraft supplier for a new national Saudi airline. A deal is expected to be worth about $35 billion, based on list prices for plane – WSJ

·     Saudi Aramco reported Sunday earning $161 billion last year, claiming the highest-ever recorded annual profit by a publicly listed company. Profits rose 46.5% when compared to the company’s 2021 results of $110 billion. It earned $49 billion in 2020.



·     State authorities closed New York-based Signature Bank (SBNY) on Sunday, after Silicon Valley Bank was shut down by regulators on Friday in the biggest bank failure since the 2008 financial crisis. All depositors of Signature Bank will be made whole, according to a joint statement by the Department of the Treasury, Federal Reserve and FDIC.

·     Federal Reserve officials say the Treasury Dept is backstopping $25 billion in a new emergency loan facility to help banks if they are close to failure. The loan facility will be for up to one year and based on secured collateral the bank has.

·     First Republic Bank (FRC) shares fell 60% after the weekend collapse of Signature Bank (SBNY) and Friday’s closure of SVB Financial, even as federal regulators stepped into guarantee those deposits and provide a new lending program. First Republic said it has access to more than $70 billion in unused liquidity after new support from the Federal Reserve and JPMorgan Chase. PacWest Bancorp (PACW), Western Alliance Bancorp (WAL) shares tumble.

·     HSBC will buy the U.K. subsidiary of Silicon Valley Bank (SIVB) for just over $1, after a frantic weekend for regulators who tried to find a way to protect the bank’s depositors after its U.S. parent collapsed – WSJ reported

·     Coinbase (COIN) said it had $240 million balance at Signature Bank (SBNY), which has just been closed by State authorities.

·     The U.S. SEC rejected a proposal to list and trade shares of the VanEck Bitcoin Trust late Friday, marking the third time the regulator has denied VanEck proposals for a spot bitcoin exchange-traded fund (ETF). The SEC has rejected a raft of ETFs that proposed tracking the digital asset.

·     USDC, a stablecoin that is supposed to trade one-to-one against U.S. dollars, has fallen below $1 on Saturday, after creator Circle said it had over $3.3 billion held at Silicon Valley Bank, which collapsed on Friday. USDC traded at as low as 86 cents on a dollar early Saturday, before it rebounded to around 95 cents, according to CoinDesk data.

·     Comerica downgraded (CMA), KeyCorp (KEY) and Wells Fargo (WFC) all downgraded to Hold from Buy at Odeon Capital by analyst Dick Bove.



·     Sanofi (SNY) to acquire Prevention Bio (PRVB), adding to portfolio TZIELD, the first disease-modifying treatment for the delay of Stage 3 T1D; holders to receive $25 per share in cash in deal valued at $2.9B, a 273% premium to Friday’s close.

·     Pfizer (PFE) to acquire Seagen (SGEN) for $229 per share in cash in $43B deal; Proposed combination enhances Pfizer’s position as a leading company in Oncology; Seagen’s medicines, late-stage development programs and pioneering expertise in Antibody-Drug Conjugates (ADCs) strongly complement Pfizer’s Oncology portfolio.

·     Acadia Pharmaceuticals Inc. (ACAD) said the FDA approved Daybue (trofinetide) for the treatment of Rett syndrome in adult and pediatric patients two years of age and older.

·     Biogen’s (BIIB) Samantha Budd Haeberlein, the Biogen senior executive who supervised the development and controversial approval of the Alzheimer’s treatment Aduhelm, has left the company, STAT has learned

·     Bionano Genomics (BNGO) files $400M mixed securities shelf.


Technology, Media & Telecom

·     Qualtrics International (XM) agreed to be acquired by Silver Lake, in partnership with Canada Pension Plan Investment Board, in an all-cash deal valuing the company at about $12.5 billion as Qualtrics shareholders will receive $18.15 per share in cash.

·     Bill Holdings Inc. (BILL) said late Friday that about $300 million of its about $2.6 billion corporate cash, cash equivalents, and short-term investments were held at SVB (SIVB) as of March 9.

·     Roku Inc. (ROKU) said late Friday that 26% of its cash is being held by SVB Bank; total cash at $SIVB:”~$487M is held at SVB, which represents ~26% of the Company’s C&CE balance as of March 10, 2023.

·     Some tech/biotech companies with SVB (SIVB) bank exposure as of late Friday according to tweet: @wbhoban post-close 8Ks on SVB exposure: Roku (ROKU) — $487M (26%), Roblox (RBLX) — ~$150M, Ginkgo Bio (DNA) — $74M, iRhythm (IRTC) — $55M (26%), LendingClub (LC) — $21M and Payoneer (PAYO) — <$20M.


Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.