Week of March 17, 2023 Weekly Recap & The Week Ahead
“Markets can remain irrational longer than you can remain solvent” — John Maynard Keynes
1. Biggest U.S. Banks Race to Rescue First Republic — Eleven banks have deposited $30 billion in First Republic Bank, according to a joint statement from the heads of the Treasury, Federal Reserve, Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency. JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp.; gand Wells Fargo WFC ; are each making a $5 billion uninsured deposit into First Republic, the banks said in a statement Morgan Stanley and Goldman Sachs Group Inc. are kicking in $2.5 billion apiece, while five other banks are contributing $1 billion each.
2. ECB Delivers Half-Point Hike But Offers Little on Next Move — the European Central Bank went ahead with a planned half-point increase in interest rates but offered few clues on what may follow amid market turmoil that roiled Credit Suisse Group AG. The deposit rate was lifted to 3% on Thursday — as officials have been flagging since their last meeting six weeks ago and as the majority of economists anticipated, but dropped language from its statement indicating where borrowing costs are headed.
3. SVB Financial Files for Chapter 11 Bankruptcy Protection — SVB Financial Group filed for chapter 11 protection on Friday in New York bankruptcy court, the largest bankruptcy filing stemming from a bank failure since Washington Mutual Inc. in 2008. Silicon Valley Bank, the technology-focused lender and SVB Financial’s primary business, was taken over by federal regulators after it was crippled by a dash for the exits by depositors. The Federal Reserve stepped in to make depositors whole and reassure markets, although a number of other regional banks in the U.S. have seen their credit ratings cut and depositors pull cash.
4. Microsoft Adds the Tech Behind ChatGPT to Its Business Software — Microsoft Corp. MSFT 1.17%increase; green up pointing triangle is infusing its popular workplace software with the technology behind the viral chatbot ChatGPT, upgrading PowerPoint, Word, Excel and Outlook with new abilities in its latest move to try to stay ahead in the artificial-intelligence race. The software giant has gone all-in on generative AI, following its multibillion-dollar investment in ChatGPT’s creator OpenAI. In February, Microsoft rolled out a new version of its search engine Bing that used generative AI to give direct answers to questions and had a sophisticated chat tool. It announced Thursday that it is bringing the technology to its Microsoft 365 suite of software to enable users to create presentations, write documents and summarize emails—all from natural-language prompts.
The week ahead — Economic data from Econoday.com:
