?? 20 March 2023 - Credit Suisse, First Republic, & Virgin Orbit

Good morning, dear readers! ??

After a restful weekend, the stock market’s latest happenings amid the current banking fiasco are kicking off the week on a fiery note. Are you ready to get into it?! Let’s go!

On Friday, stocks declined as investors’ faith in the global banking system was tested. The Dow lost 1.2%, the S&P 500 shed 1.1%, and the tech-centric NASDAQ dropped 0.7%.

Analysts and investors eagerly await the upcoming Fed Reserve meeting to assess their next moves against inflation. Amid the current banking failures (More on this later!), experts believe that the Fed will continue with a quarter-point raise or pause the hikes while banks regain their footing in the face of a possible recession. The 10-year Treasury note yield rose to 3.49%, while the WTI crude index touched $67.05 a barrel. Investors look forward to home sales, a PMI reading, and more.

Stay tuned for all the details!

UBS bails Credit Suisse out with over $3 billion buyout to secure the global banking system

After the recent banking failures,?Credit Suisse (CS)?sounded alarms for its own sinking ship, driven down by bad investments. For the first time since 2008, another megabank and rival?UBS Group (UBS)?agreed to acquire Credit Suisse for over $3 billion. The Swiss government offered a $9 billion backstop with another $100 billion of liquidity provided by the?Swiss National Bank (SNBN). The move, pushed by regulators, not only avoids shuttering Credit Suisse but also reinforces confidence in the global financial system and avoids bank runs!

First Republic continues to fall despite $30 billion lifeline; shares drop over 30%

All eyes are on?First Republic Bank (FRC)?after recent bank failures sparked cascading fears about the stability of world banks. In March alone, the firm’s stock lost 80%, as depositors withdrew around $70 billion from their accounts. The $30 billion lifeline will keep First Republic afloat – but what regulators want to know is – how long? Any acquirer for the bank will have to fulfill its $13.5 billion need first. Meanwhile, the Fed and top banks are facilitating an international lending scheme to ease the financial strain.

Virgin Orbit halts operations and prepares to declare insolvency following rocket fail

After?Virgin Orbit Holdings (VORB)?failed to launch a rocket into space two months ago, the company is struggling to fund itself. Now, Virgin Orbit is turning to investors for emergency funds. But if that too fails, the next option is insolvency. The company announced that it paused operations and temporarily discharged employees on Wednesday, sending shares down 20%. The pause will take effect in March 2023, but until then – Virgin Orbit will be fighting to keep launching rockets into the sky!