Yellen Says US Will Intervene If Needed to Protect Smaller Banks

Market Movers

• Yellen says US will intervene if needed to protect smaller banks. The Treasury Secretary said Tuesday that the government is willing to take further action* to guarantee bank deposits are safe. She noted steps that authorities already have taken to backstop deposits and said “similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion.”

• Google launches Bard AI chatbot to public. After years of development, Google ($GOOG) on Tuesday said it would expand access to Bard to a growing number of users in the U.S. and U.K. The move intensifies the battle between Google and Microsoft Corp. to dominate the release of advanced artificial-intelligence tools* that can be used to generate humanlike text responses.  

• Bank fears rattle oil markets poised for Chinese boom. Crude prices dropped to 15-month lows after strains in the U.S. banking system sent tremors* throughout financial markets and intensified fears of a broader economic slowdown. Those worries have hit prices just as energy-hungry China has finally shown signs of revving up from strict pandemic lockdowns.

• Home sales spike 14.5% in February. Sales of previously owned homes rose 14.5% in February compared with January, according to a seasonally adjusted count by NAR. Higher mortgage rates have been cooling home prices since last summer, and for the first time in a record 131 consecutive months — nearly 11 years — prices were lower on a year-over-year comparison.

• Amazon to cut 9,000 more jobs after earlier layoffs. The company said it would cut 9,000 more corporate jobs across units that include its profitable cloud-computing and advertising businesses. It's a sign that the company’s cost-cutting is extending into all aspects of its operations as technology giants continue to slash spending. Source(9:23)

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What to Watch

• Meta can rally more than 25%, says Morgan Stanley. Shares of the Facebook parent climbed nearly 3% in premarket trading after Morgan Stanley upgraded Meta* and said it has about 25% potential upside thanks to its Reels strategy and efficiency plans. The upgrade comes a week after Meta announced plans to layoff another 10,000 employees.

• Microsoft wants to launch an App marketplace. Microsoft opening up its own app store for mobile games would come with some distinct advantages. The Activision Blizzard deal would bring mobile game Candy Crush maker, King, under Microsoft's umbrella. Plus a bespoke app store would mean being able to side-step the in-app payment taxes both Apple and Google impose.

• Warren Buffet in discussion with Biden officials on the banking crisis. Buffet has a track record of coming to the rescue when banks are falling. The most notable of that was in 2008 when he gave $5 billion to Goldman Sachs in the wake of the financial crisis. He also did the same in 1987 and 2011 by giving a lifeline to the Solomon Brothers and Bank of America. People are now expecting he will do the same this time. Source(7:54)

• Glencore set to lose crown as top cobalt miner. The challenger to Glencore’s dominant position is China's CMOC Group*, which first became a major player in the cobalt market when it acquired the Tenke Fungurume mine in Congo. The company aims to double production this year, as it brings another massive Congolese mine online in the second quarter. That will propel it past Glencore.

• JPMorgan is advising First Republic on strategic alternatives. The alternatives may include a capital raise, the sources said, which could dilute current shareholders. A sale of the bank is also a possibility. A sale of First Republic to a larger bank would be in line with what happened to some struggling banks during the 2008 financial crisis and with the UBS deal to buy Credit Suisse over the weekend.