Coffee With Greta: Another Bank Failure
DJIA Futures: +9 (+0.03%)
SPX Futures: -3 (-0.1%)
NASDAQ Futures: -17 (-0.1%)
Good morning friends!
Futures are flat as another regional bank fails and traders get ready for a big week on Wall Street.
Let’s get right to it!
JPMorgan Buys First Republic After Failure
First Republic Bank (FRC) was officially seized by regulators this morning, making it the third regional bank to fail since March.
JPMorgan Chase (JPM) was the winner of a weekend auction for the bank and shares are up 4.3% ahead of the open.
The largest bank in the U.S. is getting about $92 billion in deposits and taking over $73 billion in loans and $30 billion in securities.
JPMorgan will share losses on mortgages and commercial loans assumed in the deal with the Federal Deposit Insurance Corporation.
It also received a $50 billion credit line from the FDIC.
This deal will cost the FDIC’s Deposit Insurance Fund $13 billion.
The FDIC said, “As part of the transaction, First Republic Bank’s 84 offices in eight states will reopen as branches of JPMorgan Chase Bank, National Association, today during normal business hours. All depositors of First Republic Bank will become depositors of JPMorgan Chase Bank, National Association, and will have full access to all of their deposits.”
JPMorgan CEO Jamie Dimon said, “Our government invited us and others to step up, and we did. This acquisition modestly benefits our company overall, it is accretive to shareholders, it helps further advance our wealth strategy, and it is complementary to our existing franchise.”
SoFi Rallies On Earnings Beat
SoFi Technologies (SOFI) shares are rallying 6.4% in premarket trade after beating Q1 expectations on the top and bottom line.
Here’s how the online lending giant’s results compared to analysts’ estimates:
- Adjusted loss per share: $0.05 vs $0.08 expected
- Revenue: $460.16 million vs $441 million expected
SoFi added 433,000 members during the quarter, bringing the total to 5.7 million.
The company hiked its full-year guidance now expecting revenue between $1.96 billion to $2.02 billion vs $1.93 billion to $2 billion previously.
For the second quarter, SoFi expects revenue of $470 million to $480 million vs analysts’ expectations for $463.8 million.
Big Week
Traders are gearing up for a busy week on Wall Street with earnings, the Fed, and some big economic data.
More than 1,400 companies are set to report earnings this week including giants like Ford (F), Starbucks (SBUX), Uber (UBER), Lyft (LYFT), and Apple (AAPL).
Plus, it’s Fed week with the central bank’s latest rate decision set to be released on Wednesday.
CME Group’s FedWatch Tool shows 87.5% of traders expecting another 25 basis point hike this week.
And it’s also jobs week.
The Labor Department releases the official April jobs report Friday morning.
Other key jobs data this week includes the job openings and labor turnover survey (JOLTS) on Tuesday, ADP’s April private employment report on Wednesday, and weekly jobless claims on Thursday.
In Case You Missed It
- The University of Michigan’s final consumer sentiment reading for April was unchanged at 63.5 on Friday. That was in line with expectations. The expectations index improved to 60.5 from the 60.3 estimate. The current conditions index fell to 68.2 from the 68.6 estimate. Consumers’ 1-year inflation expectations remained at 4.6% while the 5-year outlook ticked higher to 3.0%.
