Credit Suisse Shares Soar After Swiss National Bank Bailout; ECB Decision Ahead of Fed Meeting
On Thursday, Credit Suisse (CS) shares soared by over +7% in pre-market trading after the Swiss lender announced it would borrow up to $54 billion from the Swiss National Bank under a covered loan facility and a short-term liquidity facility. The move came after the bank’s largest investor, Saudi National Bank, said it could not provide more financial assistance on Wednesday.
The news follows the dramatic rescue of Silicon Valley Bank and Signature Bank by U.S. regulators on Sunday, raising concern about the stability of the global banking system. U.S.-listed shares of Credit Suisse had fallen over -13% on Wednesday, sending stock markets tumbling in the U.S. and around the world.
On the economic data side in the U.S., the Commerce Department reported retail sales dropped 0.4% in February, in line with economist expectations. Meanwhile, the Producer Price Index (PPI), which measures what suppliers are charging businesses, fell 0.1% in an unexpected decline.
First Republic Bank (FRC) also reportedly is exploring options, including putting itself up for sale, after its stock plunged 30% before the open on Thursday and 21% on Wednesday after S&P Global slashed its credit rating by four notches to junk status.
Snap (SNAP), the parent company of Meta and Snapchat, rallied 6%, while Meta rose 1.5% following a Wall Street Journal report that the Biden administration said competitor TikTok could be banned unless it is sold by its Chinese owner, ByteDance.
Shares of Adobe Systems Incorporated (ADBE) rose by more than 6% in pre-market trading after the firm released favorable Q1 results and increased its yearly guidance. Meanwhile, the 10-year Treasury yield fell 7 basis points to 3.42%, and the 2-year Treasury was down by around 10 basis points to 3.292%.
Just prior to the U.S. markets opening, the European Central Bank is expected to make its latest policy announcement. The ECB was previously believed to be increasing rates by 50 basis points until a few days ago. It is now more probable that a quarter-point shift will occur. Before the Federal Reserve convenes for its policy meeting next week, the European Central Bank has already made its decision; the likelihood of rate hikes by the Fed is also in question.
Initial jobless claims are expected to be 205,000, compared to last week’s figure of 211,000.
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