Wall Street Banks Rescue First Republic Bank with $30B Lifeline

MARKET MOVERS

• First Republic Bank receives $30B credit line from major US banks. Several of the largest banks in the United States have collaborated to prevent potential contagion from the collapse of Silicon Valley Bank by providing an unsecured credit loan of up to $30 billion to First Republic Bank. This move not only aims to prevent the next potential victim of a bank run but also seeks to restore investors' faith in the US banking system.

• YouTube to increase monthly fees for TV service. Alphabet-owned video platform, YouTube, has announced an increase in its monthly subscription fees for its TV service, marking the first price hike in three years. The monthly cost will increase from $64.99 to $72.99. This decision follows similar moves by competitors* such as Netflix, Disney+, and Prime Video.

• Microsoft upgrades business software with ChatGPT technology. Microsoft has incorporated the technology behind the viral chatbot ChatGPT into its widely-used workplace software suite. The integration, which covers PowerPoint, Word, Excel, and Outlook*, is part of the company's efforts to stay ahead in the race for artificial intelligence.

• Google to add generative AI to its workspace suite. Google plans to integrate generative AI into its Google Workspace, a suite of enterprise software tools that includes Gmail, Google Docs, and Google Sheets.* This AI technology will enable workers to generate entire documents or create images based on a prompt, enhancing their productivity.

• Multifamily construction drives housing starts growth in February. Although single-family builds experienced a sluggish month, data from the US Census Bureau indicates that new housing starts overall increased by 9.8% in February to 1.45 million, primarily driven by a 24% surge in apartment building* construction.

WHAT TO WATCH

• Red flags from Credit Suisse. When a bank offers you 6.5% and now apparently 7% to deposit large sums of money, that is not a good sign. While you may be enticed by such high interest rates, ask yourself “why it is high”. The answer is because they need more deposits to stay afloat. If Credit Suisse goes under, this would be orders of magnitudes higher than anything you saw in 2008.*

• Credit Suisse sheds another 10%. This comes as traders digest the emergency liquidity. The shares fell in morning trade Friday, after soaring over the previous session as the embattled lender said it will borrow up to 50 billion Swiss francs ($54 billion) from the Swiss National Bank. Capital markets and stakeholders appear unconvinced.

• Banks borrow $164.8 billion from Fed in rush to backstop liquidity. The Federal Reserve reports record-high borrowing of $152.85 billion from the discount window by banks in the week ended March 15. This marks a significant increase from the previous week's borrowing of $4.58 billion and the highest amount ever borrowed since the 2008 financial crisis.*

• Morgan Stanley upgrades Nvidia stock. The chip stock gained more than 2% before the bell following an upgrade to overweight by Morgan Stanley. The Wall Street firm cited continued tailwinds from the growing push toward artificial intelligence and believes the A.I. narrative is ‘too strong to remain on sidelines’.*

• TikTok for sale? The Biden administration has issued an ultimatum to TikTok's Chinese owners, ByteDance, to sell the app or face a ban. This decision marks a significant escalation in the administration's stance towards the app and reflects concerns about the security of American data. Source(6:59)

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