Dow recovered 371 near session highs, advancers over decliners 3-1 & NAZ jumped 283. The MLP index was up 1+ to the 214s after its recent sharp decline & the REIT index fell 1 to the 367s. Junk bond funds fluctuated & Treasuries continued to see more selling which lowered yields. Oil was fractionally higher to 68 & gold fell 8 to 1923 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
First Republic Bank, a regional lender whose shares have suffered a record loss amid days of financial market turmoil, is reportedly exploring various options, including a potential sale. The bank is also weighing other alternatives, including shoring up liquidity. No decision has been reached & the bank could still choose to remain independent. First Republic (FRC) announced Sun that it received additional liquidity from the Federal Reserve & JPMorgan Chase (JPM). The bank, which boasts $213B in assets has about $70B in unused liquidity after the cash infusion. Still, its stock plummeted another 20% on today to $20.65, a fresh decade low. The stock is down more than 60% over the past week. "The additional borrowing capacity from the Federal Reserve, continued access to funding through the Federal Home Loan Bank, and ability to access additional financing through JPMorgan Chase & Co. increases, diversifies and further strengthens First Republic’s existing liquidity profile," the bank said Sun. FRC, which has more than 80 branches across the US, contacted customers over the weekend in an attempt to reassure them about its health. "In light of recent industry events, the last few days have caused uncertainty in the financial markets," execs wrote in an email to clients. "We want to take a moment to reinforce the safety and stability of First Republic, reflected in the continued strength of our capital, liquidity and operations."
Troubled bank reportedly exploring sale after shares tank
Treasury Secretary Janet Yellen sought to reassure markets & lawmakers that the federal gov is committed to protecting US bank deposits following the failure of Silicon Valley Bank & Signature Bank over the weekend. “Our banking system remains sound and Americans can feel confident that their deposits will be there when they need them,” Yellen said. Yellen has been at the center of emergency federal efforts this past week to return deposits to account holders at 2 failed banks, the California-based Silicon Valley Bank & the crypto-heavy Signature Bank, based in New York. To shore up troubled banks facing a surge in cash withdrawals, the Federal Reserve also created a new lending program that Yellen said would “provide additional support” to the banking system. “This will help financial institutions meet the needs of all of their depositors.” “This week’s actions demonstrate our resolute commitment to ensure that depositors’ savings remain safe,” Yellen told senators. US bank regulators announced a plan Sun to fully insure all deposits at the 2 banks, above the $250K limit provided by traditional FDIC insurance. The additional protection will be paid for by a special fee levied on all FDIC insured institutions, they said. In addition, the Federal Reserve loosened its borrowing guidelines for banks seeking short-term funding through its so-called discount window & set up a separate unlimited facility to offer one-year loans to back up banks under looser terms than usual to US deposit institutions & prevent future bank runs. Both programs are being paid for thru industry fees, not by taxpayers, the Biden administration has emphasized. Dems & Reps in Congress have largely supported the emergency actions taken in the past week. But with markets recovering somewhat, lawmakers questioned whether backstops for big banks will become a new norm & what that could mean for community lenders. Uninsured deposits, she said, would only be covered in the event that a “failure to protect uninsured depositors would create systemic risk and significant economic and financial consequences.”
Treasury’s Yellen says only uninsured deposits at banks deemed a systemic risk will be protected
The 30-year fixed-rate mortgage (FRM) averaged 6.60% as of Mar 16, down from 6.73% recorded last week. One year ago, the 30-year FRM averaged 4.16%. Meanwhile, the 15-year fixed-rate mortgage averaged 5.9%, down from last week when it averaged 5.95%. At the same time in 2022, the 15-year FRM averaged 3.39%. "Mortgage rates are down following an increase of more than half a percent over five consecutive weeks," Freddie Mac Chief Economist Sam Khater said. "Turbulence in the financial markets is putting significant downward pressure on rates, which should benefit borrowers in the short-term," he continued. "During times of high mortgage rate volatility, homebuyers would greatly benefit from shopping for additional rate quotes." "Our research concludes that homebuyers can potentially save $600 to $1,200 annually by taking the time to shop among multiple lenders," Khater added.
Mortgage rates drop for first time in six weeks to stall rising trend
Gold prices retreated from a 6-week high as global banking jitters abated on news that a group of some of the biggest US banks were putting together a deal for troubled First Republic Bank & after the Swiss National Bank provided liquidity to Credit Suisse. Gold futures for Apr settled $8 (0.4%) lower at $1923 per ounce. Gold prices have rallied over the past week as the yellow metal benefited from anxieties about the stability of the US & European banking systems following the failure of 3 American banks & a sharp selloff in shares of Credit Suisse Group. But the yellow metal pulled back today as Credit Suisse tapped liquidity support offered by the Swiss National Bank & media reports suggested a coterie of big banks would help to rescue troubled regional lender First Republic Bank.
Gold slips from 6-week high as banking jitters ease
Oil futures ended higher, stabilizing after the US benchmark finished below $70 a barrel for the first time since Dec 2021 in the previous session. Crude was pressured in recent sessions as banking woes amplified recession worries. West Texas Intermediate crude for Apr rose 74¢ (1.1%) to finish at $68.35 a barrel, after posting the lowest close for a front-month contract since Dec 3, 2021 yesterday. May Brent crude the global benchmark, rose $1.01 (1.4%) to settle at $74.70 a barrel, after closing yesterday at its lowest since Dec 20, 2021. Crude prices found support as US stocks rallied on reports that several major banks were working on a rescue package for troubled lender First Republic Bank. Earlier, Credit Suisse said it would tap a $54B lifeline from the Swiss National Bank & launch a bid to buyback debt.
Oil ends higher, finds footing after falling to 15-month low
A sense of calm is returning to the stock market as troubled banks are getting some help. The story remains touchy, but it looks like the very big boys will provide significant help. Meanwhile, the FOMC still has its meeting next week which will bring more excitement to the stock market.
Dow Jones Industrials
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