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Stocks plummet as second US bank fails, Biden promises accountability over bank failures, Goldman Sachs predicts Fed won’t hike rates, and more financial news.
Stocks tumbled on Monday amid stress on the US banking system after a second bank failed.
S&P 500 futures were down 52.61 points or 1.36%, while the Dow slid 169.59 points or -0.53 percent and NASDAQ futures plummeted 131.93 points or -1.18%, Yahoo Finance reported.
The benchmark 10-Year U.S. Treasury slid -0.236 to yield at 3.455%, while the 2-Year Treasury was down -0.533 or 4.055% as of 9:41 AM EDT.
In oil futures, WTI crude was down -4.19% and trading at $73.52 a barrel, while Brent crude was down -3.65% and trading at $79.76 a barrel as of 9:42 AM EDT.
Regulators seized New York regional bank Signature Bank (SBNY) on Monday, making it the third-largest bank to ever fail in the U.S., behind Silicon Valley Bank – which failed two days earlier – and Washington Mutual in 2008, Yahoo Finance reported. Signature had $110 billion in assets, and $88 billion in deposits, as of Dec. 31 – and roughly 89.7% of its assets were not insured by the Federal Deposit Insurance Corporation. Signature ranked 29th among U.S. banks.
San Francisco’s First Republic shares lost 65% in premarket trading on Monday, while PacWest Bancorp dropped 24%, and Western Alliance Bancorp lost 61% in the premarket. Zions Bancorporation shed 21%, while KeyCorp fell 12%, CNBC reported.
By 9:58 AM EDT, J.P. Morgan Chase was down -0.88%, Bank of America lost -4.79%, Wells Fargo-PQ was down -2.39% while Wells Fargo was down -4.81%, Morgan Stanley was down -0.88%, while Charles Schwab tumbled -15.32%, Citigroup was down -4.41%, Goldman Sachs was down -0.88%, and HSBC was down-1.43%, according to Yahoo Finance.
On Sunday, President Joe Biden said that US Treasury Secretary Janet Yellen and his top economic adviser Lael Brainard worked with financial regulators at his direction to ensure households and businesses affected by the Silicon Valley Bank and Signature Bank failures would be able to access their deposits.
“I am pleased that they reached a prompt solution that protects American workers and small businesses, and keeps our financial system safe,” Biden said in a statement. “The solution also ensures that taxpayer dollars are not put at risk.”
Biden promised to hold those responsible accountable, CNN reported.
“I am firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again,” Biden added.
“In light of the stress in the banking system, we no longer expect the FOMC to deliver a rate hike at its next meeting on March 22,” wrote Goldman economist Jan Hatzius in a note on Sunday. Goldman says added that while they don’t expect the Fed to lift rates higher than the previous hike, they do expect a continuation of the current 25 basis point hikes in May, June, and July, reiterating their terminal rate expectation of 5.25% to 5.5%, CNBC reported.
