Credit Suisse Surges on SNB Loan, Data & ECB Decision in Focus
Shares of Credit Suisse surged in pre-market trading Thursday after the troubled European bank announced it would borrow up to $54 billion from Switzerland's central bank.[0]
The emergency loan from the Swiss National Bank comes as investor confidence in Credit Suisse has crumbled in recent days, with stocks in the U.S. and around the world falling on Wednesday after U.S. regulators were forced to rescue Silicon Valley Bank and Signature Bank on Sunday.
On Wednesday, U.S.-listed shares of Credit Suisse tumbled by more than 13%, following a statement from the Swiss bank's biggest investor, Saudi National Bank, that they could not provide extra funding due to regulatory constraints.[1]
“Credit Suisse said on early Thursday that it would exercise an option to borrow up to $54 billion from the Swiss National Bank under a covered loan facility and a short-term liquidity facility,” states an article from CNBC.[2]
The loan from the Swiss National Bank is seen as an effort to bolster investor confidence in the bank and in the global banking system.
Meanwhile, on the economic data side in the U.S., the Commerce Department said retail sales fell 0.4% over the last month, in line with the economist consensus complied by Bloomberg.[3] In contrast, an unexpected decrease of 0.1% was seen in February's Producer-Price Index, which monitors the fees that vendors are presenting to companies.[4]
In other news, First Republic Bank (FRC) reportedly is exploring options, including putting itself up for sale.[5] Prior to the opening bell, FRC stock saw a sharp decline of 30%, with other regional banks following suit.[5] On Wednesday, First Republic saw a 21% drop as S&P Global cut its credit rating by four levels, lowering it to junk status.[5]
Pre-market trading saw Adobe Systems Incorporated (ADBE) surge more than 6% following the company's positive Q1 results and raised annual outlook.[4]
The yield on the 10-year Treasury was down by around 10 basis points to 3.292%.[5] Prior to the opening of U.S. markets, the European Central Bank is expected to announce its most recent policy decision.[6] Just a few days ago, it was anticipated that the ECB would increase rates by 50 basis points.[5] It is now more probable that a quarter-point change will occur.[5] Prior to the Federal Reserve's policy gathering next week, the European Central Bank's decision has called into question the likelihood of Fed rate increases.[5]
Initial jobless claims (205,000 expected vs. 211,000 last week) and U.S.[7]
0. “Stock Market Today: Dow Futures Edge Down; Credit Suisse Shares Leap 20%” The Wall Street Journal, 16 Mar. 2023, https://www.wsj.com/livecoverage/stock-market-news-today-03-16-2023
1. “Credit Suisse shares soar after the bank secures a $54 billion lifeline” NPR, 16 Mar. 2023, https://www.npr.org/2023/03/16/1163837728/credit-suisse-banking-stock-markets
2. “Credit Suisse to borrow up to $54 billion from Switzerland's central bank” Axios, 16 Mar. 2023, https://www.axios.com/2023/03/16/credit-suisse-borrow-54-billion-switzerlands-central-bank
3. “Stock market news today: Stocks, yields fall amid Credit Suisse turmoil” Yahoo News, 14 Mar. 2023, https://news.yahoo.com/stock-market-news-today-live-updates-march-15-2023-114153589.html
4. “Stock Index Futures Mixed as Bank Jitters Weigh on Sentiment, ECB Decision in Focus” Barchart, 16 Mar. 2023, https://www.barchart.com/story/news/15111754/stock-index-futures-mixed-as-bank-jitters-weigh-on-sentiment-ecb-decision-in-focus
5. “Dow Jones Futures Fall: Credit Suisse Taps Swiss National Bank; First Republic Dives On Sales Report | Investor's …” Investor's Business Daily, 16 Mar. 2023, https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-rise-as-credit-suisse-taps-54-billion-from-swiss-national-bank/
6. “European markets live updates: stocks, data, news and earnings” CNBC, 16 Mar. 2023, https://www.cnbc.com/2023/03/16/european-markets-live-updates-stocks-data-news-and-earnings.html
7. “How Credit Suisse just unleashed a nightmare decision for the Fed and the ECB” Yahoo News, 16 Mar. 2023, https://news.yahoo.com/how-credit-suisse-just-unleashed-a-nightmare-decision-for-the-fed-and-the-ecb-093016411.html
