Colliers Securities chief global strategist Mark Grant argues the Fed moved too aggressively to combat inflation with ‘a lot of collateral damage.’
Charles Schwab shares are on pace for the worst percentage drop on record as investors scramble following the FDIC’s closure of Silicon Valley Bank on Friday, which was followed by the emergency backstop by regulators late Sunday.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SCHW | THE CHARLES SCHWAB CORP. | 51.88 | -6.84 | -11.65% |
The stock dropped over 19% midday, the worst shellacking since November 2020, even as Chief Financial Officer Peter Crawford moved to assure customers and investors the firm is on solid footing. Below are excerpts from the release.
HOW SILICON VALLEY BANK GOT BURNED
New assets
- February core net new assets totaled $41.7 billion, our 2nd largest February ever (trailing only February 2021, the height of the meme stock craze). Our growth and momentum have continued into March, with daily net new assets averaging nearly $2B per trading day month-to-date
Outflows not troublesome
- Client bank sweep cash outflows in February were about $5 billion lower than January and March month-to-date daily average outflows are tracking consistent with February
Over 80% of our total bank deposits within FDIC insurance limits
- Among the five highest ratios of the top 100 banks in the United States
We have access to significant liquidity
- This includes an estimated $100 billion of cash flow from cash on hand, portfolio-related cash flows, and net new assets we anticipate realizing over the next twelve months.
Charles Schwab
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S&P 500 financial stocks fell over 4% as contagion jitters spread through the sector. Bank stocks including First Republic, KeyBank, Huntington Bancshares and PacWest were all down more than double-digits.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| XLF | FINANCIAL SELECT SECTOR SPDR ETF | 31.85 | -1.08 | -3.28% |
| FRC | FIRST REPUBLIC BANK (SAN FRANCISCO CALIFORNIA) | 28.99 | -52.77 | -64.54% |
| KEY | KEYCORP | 11.27 | -4.39 | -28.07% |
| HBAN | HUNTINGTON BANCSHARES INC. | 10.99 | -2.38 | -17.76% |
| PWAC | n.a. | n.a. | n.a. | n.a. |
President Biden in a speech on Monday reassured Americans about the safety of the U.S. banking system.
“During the Obama-Biden administration, we put into place tough requirements on banks, like Silicon Valley Bank and Signature Bank, including the Dodd-Frank law, to make sure the crisis we saw in 2008 would not happen again,” Biden said during his brief, five-minute speech.
