Good morning contrarians! It is Monday, March 20.
It was another eventful weekend with regulators again racing against the clock to shore up confidence in the financial system. The Swiss government organized the merger of Credit Suisse (CS 0.00%↑) into UBS (UBS 0.00%↑) for pennies on the dollar — this mere days pledging that “Credit Suisse meets the capital and liquidity requirements imposed on systemically important banks.”
State of Play
As of 0635 things are a little all over the place:
Stock futures are mixed, with the Russell 2000 which tracks small caps showing signs of life, up 0.8%. Nasdaq and S&P are flat. Banking stocks are getting beat up, Not just UBS and CS but First Republic Bank (FRC 0.00%↑), down 18% in the pre-market. Also watch commercial real estate, with Vornado (VNO 0.00%↑) down 4.5%;
Bonds are seeing a few bids at the short end of the curve, with the yield on the 2-year down 7 basis points to 3.77%. The 10-year is down 3bps to 3.37% (yields move inversely to prices);
Commodities are dropping again, with WTI crude oil down 3% to trade around $65/barrel. Copper is up <1%;
Cryptos continue to rally, with Bitcoin up 4% to trade north of $28,000.
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