UBS stock is down about 4% (well off its lows), we see CS stock at almost a zero though some value still there but notably was the complete zero the contingent convertible securities (lowest level of bank debt and CS had $17b worth of them) of CS are being assigned and are supposed to be senior to the equity. The Euro STOXX bank index is lower by 1.5% …
Succinct Summation of the Week’s Events
Succinct Summation of the Week’s Events: Positives, 1)It’s Friday and the market is closed for the next two days. 2)Putting aside the intense bailout debate and sorry for stock and bond holders of SVB and SBNY, VC funded companies and others live to fight another day. 3)Initial claims fell back below 200k to 192k, 13k below expectations and vs 212k last …
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Confidence falters BEFORE SVB news
The initial March UoM consumer confidence index fell to 63.4 from 67 and that was below the estimate of no change. Both Current Conditions and the Expectation components were lower m/o/m by similar amounts. One yr inflation expectations fell below 4% to 3.8% (lowest since April 2021 but still above the 20 yr pre Covid average of 2.9%) from 4.1%, helped by lower …
That was strange/3 yrs before the ring comes on average/Other
While I'm glad to not see another bank failure in First Republic, what a weird way to save a bank. Imagine if Janet Yellen called Walmart, Costco, Target and Amazon and encouraged them to buy stuff from another retailer, whose business has been teetering, each month to keep them alive. No one wants to buy First Republic? No one wants to take their marks on their …
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ECB, intraday response in German 2 yr and euro and Fed rate hike odds
Here is an intraday chart of the German 2 yr yield that reflects the immediate spike after the ECB announced the 50 bps hike but come down after when they didn’t commit to anything more past this meeting, with it completely ‘data dependent’ from here. QT has begun. The euro too jumped but now is at the low of the day vs the USD. As for what this means for the Fed, …
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Claims steady, further mfr’g weakness, multi family strength, and import price softness
Initial claims fell back below 200k to 192k, 13k below expectations and vs 212k last week. The 4 week average was little changed at 197k. After rising by 64k last week to near the highest since last February, continuing claims fell by 29k. The bottom line again is companies are holding on to employees after a few years of difficulty in finding many of them. In …
A few notable things
While it's easy for the rest of us to say, 'Yeah, the Swiss government will just take over/backstop Credit Suisse,' and while the SNB is lending them $54b, we have to understand just how big Credit Suisse and UBS are relative to the Swiss economy to understand that it is not that easy. The Swiss economy is about $800b and Credit Suisse has about $570b in assets (down …
Home builder sentiment, the new issue of access to credit
The March NAHB home builder index rose 2 pts m/o/m to 44 and that was 4 pts above expectations, though still below the breakeven of 50. Present conditions were up 2 pts to just below 50 at 49. The outlook though slipped 1 pt to 47 and prospective buyers traffic remained well under 50 at 31 but that is up 3 pts m/o/m. Putting aside the affordability challenge that …
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Wholesale prices fall again/Mfr’g still contracting/Retail sales mixed
February PPI fell one tenth headline unexpectedly as the estimate was for up 3 tenths. And, this comes off a downward revision of 4 tenths to January to up 3 tenths. The core rate was flat m/o/m instead of rising by .4% as forecasted and January was revised lower by 4 tenths. The y/o/y headline gain slowed to 4.6% from 5.7% last month. The core rate was higher by 4.4% …
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What’s going on
It was about 4:45am est when the Saudi National Bank said 'no more' to more investment in its already 10% holding in Credit Suisse. While CS Chairman Axel Lehmann today said that help from the Swiss government "isn't a topic", how can it not be at this point notwithstanding the "strong capital ratios, a strong balance sheet" that Lehmann reiterated today? The Qatar …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor. Each day The Boock Report provides summaries and commentary on the macro data and news that matter, with analysis of what it all means and how it fits together.