Hot news

• US senators call for an independent investigation into the Federal Reserve: Powell's extreme interest rate hike should not be done

According to US media reports, US Senator Elizabeth Warren of Massachusetts harshly criticized Federal Reserve Chairman Powell's regulatory failure on a television program and called for an investigation into the Federal Reserve and the entire regulatory system. Warren said in an interview that Powell should not lead the US central banking system. “His work on both monetary policy and bank supervision has failed.” Warren also said, “I don't think he should raise interest rates. I've always thought that his extreme measures to raise interest rates should not be done.”

• “New Federal Reserve News Agency”: The Federal Reserve faces a difficult decision on raising interest rates

Wall Street Journal reporter Nick Timiraos, who is regarded as the “mouthpiece of the Federal Reserve” and known as the “New Federal Reserve News Agency,” wrote that Federal Reserve Chairman Powell and his colleagues faced one of their toughest decisions in many years this week: whether to raise interest rates again to counter stubborn high inflation, or to suspend interest rate hikes amid the banking crisis. Former Federal Reserve Vice Chairman Richard Clarida believes that the Federal Reserve should continue to raise interest rates by 25 basis points to prevent the market from speculating that the Fed knows the truth that some investors don't know. According to the latest CME data, the market currently predicts that the probability that the Federal Reserve will raise interest rates by 25 basis points is 73.8%.

• Hedge fund mogul Ackman: In light of the banking crisis, the Federal Reserve should suspend interest rate hikes

Hedge fund mogul Ackman said that the Federal Reserve should not raise the benchmark interest rate this week; the banking crisis has already had the effect of “clearly tightening the financial environment.” “There have been many major shocks to the financial system,” he mentioned the collapse of three US banks, the pressure on First Trust Bank, and the emergency takeover of Credit Suisse Group.

• J.P. Morgan: “Minsky moment” risks rise, the Federal Reserve may choose to raise interest rates by 25 basis points

J.P. Morgan's chief global market strategist said that the turmoil in the US banking industry has made a soft economic landing impossible and has increased the risk of a “Minsk moment in markets and geopolitics.” Even if central banks manage to contain the spread of the crisis, the credit environment is likely to tighten more rapidly due to market and regulatory pressure. Strategists expect the Federal Reserve to choose to raise interest rates by 25 basis points on Wednesday. Currently, the bank's strategists are wary of risky assets and are adhering to their predictions that the first quarter will eventually be the high of this year's stock market. His next suggestion was to reduce value stocks and “stay defensive in portfolio allocation.”

• Aiming for big easing next year? Swap contracts bet that the Federal Reserve will cut interest rates by more than 3% next year

Currently, the pricing of an interest rate swap contract based on overnight interest rates — an overnight index swap (OIS) one-year contract shows that investors are betting that by March next year, the Federal Reserve will cut interest rates by close to 40 basis points, while the premium for similar OIS swap options that will take power a month later is currently priced at more than 300 basis points. This means that only when the Fed cuts interest rates within the next 13 months offsets all interest rate increases since July last year can the above swap contract transactions achieve balance of payments.

• How tight is the liquidity of banks in the US region? Major lender FHLB raised $304 billion by issuing bonds last week

According to people familiar with the matter, FHLB issued a total of 304 billion US dollars in debt last week. This is almost double the total amount recently borrowed by the US banking industry from the Federal Reserve's two financing instruments, totaling nearly 165 billion US dollars. According to people familiar with the matter, FHLB issued 112 billion US dollars in debt last Monday alone, ranking among the highest in the history of single-day financing. The Federal Reserve's discount window ended last week to provide loans of 152.85 billion US dollars, setting the highest weekly record set during the 2008 financial crisis, far exceeding the previous week's 4.58 billion US dollars.

• ECB President Lagarde: Confident in the liquidity and capital levels of the Eurozone banking sector

ECB President Lagarde said he has confidence in the liquidity and capital levels of the Eurozone banking industry; the ECB's determination to fight inflation is firm and strong; financial tension may have an impact on demand; the central bank is wary of the risk of a second round of inflation; and in the spring of 2023, there will be a better understanding of the labor market.

Resumption of US stock trading

• Credit Suisse fell more than 50% to hit a new low in stock prices, a huge shock in the banking industry suppressed expectations of interest rate hikes, and the three major indices collectively closed higher

By the close, the three major US stock indices collectively closed higher. The Dow rose 1.2%, the NASDAQ rose 0.39%, and the S&P 500 index rose 0.89%.

Major US banks turned down at the end of the session, and Wells Fargo fell nearly 1%. Credit Suisse fell more than 50% to a new low, Bank First Republic fell more than 47%, and UBS closed up more than 3%.

Big tech stocks had mixed ups and downs. Apple rose 1.55%, Microsoft fell 2.58%, Google fell 0.52%, Amazon fell 1.25%, Tesla rose 1.73%, and Meta rose 1.12%.

• J.P. Morgan is considering leading other banks to turn First Republic Bank deposits into capital injections

People familiar with the matter revealed that J.P. Morgan CEO Jamie Dimon has drawn up a package of aid$First Republic Bank (FRC.US)$The new plan plans to turn part or all of the 30 billion US dollars that several major bank giants have deposited in the bank into capital injections. People familiar with the matter, who asked for anonymity because the discussions were not made public, said that after the Bank of Silicon Valley went bankrupt and shook the confidence of depositors, First Trust Bank was looking for ways to strengthen its capital strength. Previously, a total of 11 banks agreed to deposit funds into First Trust Bank. Currently, related discussions are still in the early stages.

• First Citizens Bank is still interested in buying Silicon Valley Bank as a whole

People familiar with the matter revealed that as one of the biggest buyers of bankrupt banks in the US$First Citizens BancShares (FCNCA.US)$Still hoping to reach an agreement on the overall takeover$SVB Financial (SIVB.US)$. People familiar with the matter said that the bank, headquartered in Raleigh, North Carolina, submitted an offer to buy the entire Silicon Valley bank on Sunday.

• S&P downgraded UBS's rating outlook to negative, saying integrating Credit Suisse poses significant execution risks

in$UBS Group (UBS.US)$Announcing the takeover$Credit Suisse (CS.US)$After that, S&P Global Ratings downgraded UBS's credit rating outlook from stable to negative. S&P said the risks associated with UBS's integration with its troubled rival would put pressure on the credit situation, so it lowered UBS's rating outlook. S&P confirmed UBS's long-term credit rating as A-.

• Moody's Moves Moves Credit Suisse Ratings to Positive Watch List

Moody Jean$Credit Suisse (CS.US)$The ratings moved from a negative watch list to a positive watch list. Moody's said, “In addition to being able to rely on UBS, a powerful financial group, Credit Suisse's creditors will also benefit from increased liquidity and downward protection.” S&P believes that UBS has sufficient downside protection measures to effectively withstand the risks arising from Credit Suisse transactions and subsequent integration.

• US Federal Savings Insurance Corporation Announces Deadline for Silicon Valley Transition Bank and Private Bank Auction

The US Federal Savings Insurance Company issued a statement announcing the extension of the Silicon Valley Transition Bank's bidding window. The bidding deadline was set at 20:00 EST on March 24. Additionally, the Federal Savings Insurance Corporation set the bidding deadline for private banks in Silicon Valley at 20:00 EST on March 22.$SVB Financial (SIVB.US)$It is expected to be split into at least two parts, namely private banks, and a transition bank set up by the Federal Savings Insurance Corporation to take over Silicon Valley bank deposits and assets for sale.

• Amazon will lay off another 9,000 employees, mainly involving departments such as AWS, advertising, and PXT

$Amazon (AMZN.US)$CEO Andy Garcy issued a letter to all employees on March 20, saying that Amazon will lay off another 9,000 employees in the next few weeks, mainly involving Amazon Cloud Computing Services (AWS), advertising business and Twitch, as well as the People, Experience, and Technology (PXT) department responsible for human resources. Andy Garcy issued a letter to all employees in January of this year, saying that Amazon plans to lay off more than 18,000 employees. Most of the layoffs involved Amazon Stores and PXT departments.

• Microsoft's Nuance launches clinical note-taking app powered by GPT-4

According to the US media,$Microsoft (MSFT.US)$On Monday, its speech recognition company Nuance Communications announced the launch of Dragon Ambient Experience (DAX) Express, a clinical note-taking app for healthcare workers driven by artificial intelligence. Designed to help ease the administrative burden on clinicians, DAX Express automatically generates draft clinical notes within seconds of a patient's visit. The technology is jointly driven by environmental artificial intelligence (ambient A.I.) and OpenAI's latest model GPT-4.

Top 20 Overnight US Stock Turnover

Hong Kong Market Outlook

• Beishui sharply increased Tencent's holdings by nearly 900 million Hong Kong dollars and sold China Mobile by nearly 900 million Hong Kong dollars

On March 20, 2023, Southbound Capital made a net purchase of HK$5.692 billion.$Hang Seng H-Share Index ETF (02828.HK)$,$TENCENT (00700.HK)$,$SMIC (00981.HK)$Net purchases were received of HK$1,016 million, HK$891 million, and HK$215 million respectively.$CHINA MOBILE (00941.HK)$Net sales topped the list, with an amount of HK$888 million.

Note: Since March 6, Nanxia Capital has made net purchases of Tencent for 11 consecutive trading days, totaling approximately HK$6.962 billion.

Today's attention

Keywords: US existing home sales data for February; Tencent Music, Geely Auto, Tongcheng Travel Earnings

Investors can pay attention on TuesdayTotal number of existing home sales in the US in February,Economic data such as the Eurozone ZEW Economic Sentiment Index for March and Canada's CPI for February.

Also,The Reserve Bank of Australia will release the minutes of the March monetary policy meeting.

In terms of financial reports,$TME-SW (01698.HK)$,$GEELY AUTO (00175.HK)$,$TONGCHENGTRAVEL (00780.HK)$Results will be announced one after another.

Niu Niu Chen read:

If you invest in stocks, you must actually understand the company's operating conditions, and you must not be misled by some false figures.

—Philip Fisher

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