Dow futures jump 400 points as regulators announce backstop of SVB depositors: Live updates – CNBC

Some Asia-based clients of Silicon Valley Bank clarified their exposure to the collapsed bank in filings Monday.

Shares of Shanghai Pudong Development Bank fell about 1% in afternoon trade after the joint venture between the bank and SVB said its balance sheet is “independent.”

BeiGene fell nearly 1% after it said its uninsured cash deposits at SVB amounted to about 3.9% of its total as of Dec. 31. The stock later traded slightly higher.

Shares of Mobvista fell about 1% after the company said it has minimal exposure to SVB. The company said a “minimal portion” of its cash was in deposit accounts at the bank, amounting to an aggregate balance of roughly $430,000.

Brii Biosciences said less than 9% of total cash and bank balances were at SVB. Shares of the company were recently sitting about 0.2% lower after paring some of its earlier losses.

Hong Kong-listed shares of Broncus Holding traded 2.86% higher.

The company said its deposit at SVB represents roughly 6.5% of the company’s cash and cash equivalents “and otherwise has no exposure to SVB,” it said.

“The Company is of the view that its exposure due to the SVB incident is immaterial and it does not anticipate the Company’s operating plan or cash runway will be materially affected,” it said.

— Jihye Lee

Some Asia-based clients of Silicon Valley Bank clarified their exposure to the collapsed bank in filings Monday.

Shares of Shanghai Pudong Development Bank fell about 1% in afternoon trade after the joint venture between the bank and SVB said its balance sheet is “independent.”

BeiGene fell nearly 1% after it said its uninsured cash deposits at SVB amounted to about 3.9% of its total as of Dec. 31. The stock later traded slightly higher.

Shares of Mobvista fell about 1% after the company said it has minimal exposure to SVB. The company said a “minimal portion” of its cash was in deposit accounts at the bank, amounting to an aggregate balance of roughly $430,000.

Brii Biosciences said less than 9% of total cash and bank balances were at SVB. Shares of the company were recently sitting about 0.2% lower after paring some of its earlier losses.

Hong Kong-listed shares of Broncus Holding traded 2.86% higher.

The company said its deposit at SVB represents roughly 6.5% of the company’s cash and cash equivalents “and otherwise has no exposure to SVB,” it said.

“The Company is of the view that its exposure due to the SVB incident is immaterial and it does not anticipate the Company’s operating plan or cash runway will be materially affected,” it said.

— Jihye Lee

Goldman Sachs no longer sees a case for the Federal Reserve to deliver a rate hike at the Federal Open Market Committee meeting next week, economist Jan Hatzius said in a Sunday note.

“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,” Goldman Sachs said in a note.

Hatzius and a team of economists added they still expect to see 25 basis point hikes in May, June and July, reiterating their terminal rate expectation of 5.25% to 5.5%.

— Jihye Lee

President Joe Biden tweeted that U.S. regulators have reached a “solution” regarding issues related to Silicon Valley Bank and Signature Bank.

“The American people and American businesses can have confidence that their bank deposits will be there when they need them,” he said in a Twitter thread.

“I’m 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 wrote in a tweet.

— Jihye Lee

Silicon Valley Bank went under on Friday, and investor Leon Cooperman thinks this situation is a byproduct of low interest rates from the Federal Reserve.

“This is the result of stupid monetary policy of zero-to-negative rates for a decade,” Cooperman, the head of Omega Advisors, told CNBC’s Scott Wapner.

The Fed cut rates to zero to stabilize the economy after the 2008 financial crisis. Rates remained low for years after until the Fed started to raise in the late 2010s. In 2020, however, the central bank brought rates back down to zero as Covid-19 spread around the world.

Over the last year, the central bank has been hiking rates to stem inflationary pressures.

— Fred Imbert

Investors will have to be a lot more selective going forward, especially after the SVB Financial collapse, said investor Ann Miletti.

Focus on companies with strong balance sheets and free cash flow, “and management teams that have great risk control and experience through difficult times,” Miletti, the head of active equity at Allspring Global Investments, said Sunday during a CNBC special.

Her comments came after regulators announced a plan to backstop Silicon Valley Bank depositors after the bank’s collapse last week.

Regulators are “not going to be available to help out all companies,” she said. “We’ve had a lot of bailouts the last several years, and I think investors are getting pretty used to them. What we have to realize is we’re in a new regime.

“There’s higher rates, higher inflation, and we’re going to see bankruptcies happen. There’s not going to be bailouts for everyone,” Miletti added.

— Fred Imbert

Regulators scrambled to avert a banking crisis over the weekend, with one key objective being “strengthening public confidence” in the U.S. banking system.

A joint statement from Treasury Secretary Janet Yellen, Federal Reserve Chair Jerome Powell and FDIC Chairman Martin Gruenberg said depositors at Silicon Valley Bank and New York’s Signature Bank will have access to all of their money as soon as Monday.

“No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer,” they said.

—Christina Cheddar Berk

Treasury Secretary Janet Yellen, Federal Reserve Chair Jerome Powell and FDIC Chairman Martin J. Gruenberg issued a joint statement Sunday night explaining their reasoning for devising a plan to backstop depositors and protect financial institutions with money at Silicon Valley Bank.

“We are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system,” the statement said. “This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.”

Silicon Valley Bank failed Friday, marking the biggest bank failure since the 2008 financial crisis. This then raised concern over other banks that could be seeing similar risks.

“The U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry,” the officials said in a statement.

“Those reforms combined with today’s actions demonstrate our commitment to take the necessary steps to ensure that depositors’ savings remain safe,” they added.

— Fred Imbert

Crypto climbed with stocks as U.S. regulators unveiled a plan to assure depositors at Silicon Valley Bank would get their money after the bank’s spectacular collapse Friday.

Bitcoin and ether each jumped about 7% after 6:30 p.m. ET, according to Coin Metrics.

The moves came even as New York’s Signature Bank was closed by the New York State Department of Financial Services Sunday, according to a joint statement by the Treasury, Federal Reserve, and FDIC.

Signature Bank was another famously crypto-friendly institution and the next biggest one next to Silvergate, which announced its impending liquidation last week.

Its closure adds to fears by crypto investors and entrepreneurs that the industry is being de-risked from the U.S. banking system, leaving it without “on-ramps” that allow fiat money to flow into crypto assets. Silvergate and Signature helped solve this problem by creating easy banking services and payment platforms for crypto companies.

Wall Street analysts Friday had maintained buy ratings on Signature Bank, despite the bad news about its peers earlier in the week.

— Tanaya Macheel

Gold futures for April delivery popped more than 1% in early trading, reaching their highest levels since Feb. 9. The precious metal, often seen as a safe haven in times of market volatility and uncertainty, was last at $1,896 per ounce.

— Fred Imbert, Gina Francolla

Futures extended their gains just before 6:30 p.m. ET after U.S. regulators unveiled a plan to stem the damage from Silicon Valley Bank’s collapse.

Dow futures were last higher by 297 points, or 0.9%. S&P 500 futures jumped 1.1% and Nasdaq Composite futures advanced 1.2%.

— Tanaya Macheel

“This is going to be a bad stretch for equities, with multiple contraction likely until more of the overall the non SVB-issues are understood,” Trivariate Research’s Adam Parker wrote in a research note Sunday.

Parker had already downgraded health-care stocks at the beginning of the year, but now he’s even more cautious on biotechnology stocks and he’s underweight technology.

SVB’s demise points to “deteriorating” underlying conditions for biotech and select tech companies, he said. The declining deposit base at SVB is an illustration of “decelerating fundamentals in these parts of the economy.”

Parker also said it’s “prudent” to sell financials because some companies will be taking another look at their banking exposure, which could lead to further instances of big withdrawls as soon as Monday.

—Christina Cheddar Berk

First Republic Bank said in a letter to clients on Sunday that its “capital remains strong” and “significantly higher than regulatory requirements.”

“We stand ready to process transactions and wires, fund loans, answer questions and serve your overall financial needs – as we do every day,” the letter said.

First Republic caters to high-end clients and businesses, and has a below average level of retail deposits as percentage of its assets — though not to the extent that SVB did.

The letter, from executive chairman Jim Herbert and CEO Mike Roffler, said that First Republic has over $60 billion of available borrowing capacity at the Federal Home Loan Bank and the Federal Reserve. The bank had $176 billion in total deposits as of Dec. 31.

Shares of the bank fell nearly 15% on Friday.

— Jesse Pound

PNC Financial Group has decided against bidding on Silicon Valley Bank as regulators struggled to find a buyer for the failed bank’s assets, according to a source familiar with the matter.

The Pittsburgh, Penn.-based bank sent an initial notice of interest to the Federal Deposit Insurance Corp for a deal for SVB and held brief and preliminary discussions with the agency, the source said. However, after conducting initial due diligence, PNC informed the FDIC on Saturday that it decided not to move forward, the source said.

— Yun Li

Wall Street veteran Ed Yardeni said in a note that the Silicon Valley Bank’s failure could lead the Federal Reserve to wrap up its rate hiking campaign sooner than expected.

“If the Silicon Valley Bank run is that something, it could mean tightening ends sooner and bond yields have peaked,” wrote the president of Yardeni Research. “We can’t say for sure that’s the case but can say the debacle should keep the tech sector mired in its rolling recession for longer.”

“While the SVB crisis doesn’t change our economic and stock market outlooks for now, it adds uncertainty until resolved in a way that minimizes systemic shock,” he added.

Ed Hyman of Evercore ISI echoed Yardeni’s remarks, noting that it “might be a good idea for the Fed to pause.”

“If the Fed were to pause and inflation were to accelerate, they could easily tighten again,” Hyman said.

— Fred Imbert

Stock futures opened higher on Sunday evening as investors awaited details on the next steps in the Silicon Valley Bank crisis.

Futures tied to the Dow Jones Industrial Average added 134 points, or 0.4%. S&P 500 futures advanced 0.6% and Nasdaq 100 futures rose 0.5%.

— Tanaya Macheel