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Is America going into a recession or not? That depends on who you ask—and how old they are.
Consumer households from their 20s to their 50s are now spending sharply less on their credit and debit cards than they were a year ago reports Bank of America, after crunching the numbers on its customers.
At this point it’s mostly those over 60, and…
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UBS said Friday that it’s signed a loss protection agreement with the Swiss government covering up to 9 billion francs ($10 billion) of losses once the takeover of Credit Suisse is completed.
The finalized deal sets the stage for the merger of the Swiss banks to be completed as early as June 12.
Terms call for the guarantee to only be implemented if UBS takes 5 billion francs of losses from what are called non-core assets of Credit Suisse.
The protection applies to roughly 3% of the combined assets of the merged bank. UBS is paying the Swiss government an upfront fee of 40 million francs, as well as an annual maintenance fee of 0.4% and a risk premium depending on how much of the guarantee is used. UBS does have the right to terminate the guarantee at any time.
The per-share value of the UBS offer
UBS,
UBSG,
has climbed slightly since the deal was first announced, as it’s now worth 0.81 francs per share, valuing Credit Suisse at 3.2 billion francs, or $3.6 billion.
UBS agreed to buy its rival for an initially announced 3 billion francs after Credit Suisse
CS,
CSGN,
was unable to stem outflows from its wealthy clients.
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By Pierre Bertrand
UBS Group said it expects to complete its acquisition of Credit Suisse Group and have the shares of the Swiss peer delisted as early as next week.
Upon completion, Credit Suisse will be merged into UBS and its shares and American depositary shares will be delisted from the SIX Swiss Exchange and the New York Stock Exchange, UBS said in a statement Monday.
If the acquisition is finalized before the opening of trading in the U.S. on June 12, Credit Suisse will de delisted in New York on June 12 and delisted in Switzerland on June 13, UBS said.
If the deal is finalized after the opening of trading in the U.S. on June 12, the delisting on the NYSE and the SIX will both occur on June 13, UBS added.
UBS, which received the European Union’s clearance for its takeover of Credit Suisse last month, said Credit Suisse shareholders will receive one UBS share for every 22.48 outstanding shares held and that it will assume all Credit Suisse Group assets and liabilities.
It added that Credit Suisse Group’s obligations under its outstanding debt securities will become UBS obligations.
UBS agreed to take over Credit Suisse as part of an emergency measure in March to shore up the troubled lender and restore confidence in the global banking system.
Write to Pierre Bertrand at pierre.bertrand@wsj.com
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A spokesperson for JPMorgan Chase & Co. on Friday has confirmed statements on social media that some customers are seeing duplicate transactions and fees on their checking accounts.
“We’re sorry,” the spokesperson said in an email to MarketWatch. “We’re working to resolve the issue and will automatically reverse any duplicates and adjust any related fees.”
JPMorgan Chase
JPM,
customers on Twitter and other social-media outlets said payments made through Zelle were showing up twice.
“PSA!!!,” said Twitter user @haunteraIIA. “Anyone waking up to duplicate zelle charges from chase, my call just went through and was told the duplicate charge should be credited within 24hours. they’re having issues with this today. i was on hold for an hour, so just in case anyone else wakes up freaked out lol.”
Zelle is jointly owned by six banks: JPMorgan, Truist Financial Corp.
TFC,
Capital One
COF,
U.S. Bancorp
USB,
PNC Financial Services Group Inc.
PNC,
and Wells Fargo & Co.
WFC,
A spokesperson from Chase clarified that the problems are confined to its customers.
Also Read: Banks explore reimbursing customers who send money to scam Zelle accounts
Weston Blasi contributed to this report.
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https://www.wsj.com/articles/americas-biggest-bank-is-everywhereand-it-isnt-done-growing-5ff18360
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Deutsche Bank AG will pay $75 million to settle a proposed class-action lawsuit claiming it aided Jeffrey Epstein’s sex-trafficking ring, the Wall Street Journal reported Wednesday night.
The suit was filed by lawyers on behalf of an anonymous victim and others who accused the financier, who died by suicide in federal lockup in 2019, of sexual abuse and trafficking. The suit claimed Deutsche Bank
DB,
ignored red flags and did business with Epstein for five years despite knowing he was using the money from his accounts to further his sex trafficking.
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JPMorgan Chase has won the auction to take over fallen First Republic Bank, the Federal Deposit Insurance Corp. announced early Monday morning.
The deal will see America’s largest bank JPM assume all the deposits and “substantially all the assets” of First Republic FRC, which became the fourth U.S. bank to fail this year.
“Our government invited…
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JPMorgan Chase has won the auction to take over fallen First Republic Bank, the Federal Deposit Insurance Corp. announced early Monday morning.
The deal will see America’s largest bank JPM assume all the deposits and “substantially all the assets” of First Republic FRC.
The deal will see First Republic depositors — which include 11 leading…
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UBS Group AG said Tuesday that earnings declined in the first quarter, hurt by litigation, but that the bank drew in billions in net new money at its global wealth-management business following the news of its acquisition of Credit Suisse Group AG.
The Swiss bank UBS CH:UBSG said its result was affected by $665 million in provisions related to U.S. residential mortgage-backed securities litigation.
UBS…
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Credit Suisse Group AG swung to a net profit on Monday, overturning five consecutive straight quarterly losses, reflecting the write-down of billions in AT1 capital notes relating to its takeover by UBS Group AG.
The Swiss lender said its made 12.43 billion Swiss francs in quarterly income ($13.93 billion), compared with a loss of CHF273 million in the same period of 2022, on revenue that more than tripled to CHF18.47 billion.
The…
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“‘It’s not like a credit crunch.’”
While it will be more expensive for banks to deploy capital this year, talk of a possible credit crunch tied to higher interest rates remains overblown, JPMorgan Chase & Co. CEO Jamie Dimon said Friday.
Although Dimon acknowledged that more challenging lending conditions are already being seen in the real-estate sector, he said bank credit overall will continue to flow despite concerns about a credit crunch voiced by Chicago Fed President Austan Goolsbee on Friday.
“Obviously, there’s going to be a little bit of tightening, and most of that will be around certain real-estate things,” Dimon said, according to a transcript of JPMorgan’s first-quarter earnings call with analysts. “You’ve heard it from real-estate investors already, so I just look at that as a kind of thumb on the scale. It just [means] the fast conditions will be a little bit tighter, [which] increases the odds of a recession. That’s what that is. It’s not like a credit crunch.”
In real estate, banks have been hit both by a drop in mortgage demand due to higher interest rates as well as a looming wall of debt from office properties affected by slack demand for space. For its part, JPMorgan said Friday that its office-sector exposure is less than 10% of its portfolio and is focused in dense urban markets.
Also read: JPMorgan Chase stock moves positive for the year after it blasts past earnings and revenue estimates
On the call, analyst John McDonald of Autonomous Research asked, “There’s a narrative out there that the industry could see a credit crunch. Banks are going to stop lending, and even [Federal Reserve Chair] Jay Powell mentioned that as a risk.”
Dimon responded: “Yeah, I wouldn’t use the word ‘credit crunch’ if I were you.”
Dimon was also asked about the regulatory landscape for banks after the collapse of Silicon Valley Bank and Signature Bank in March.
“Look, we’re hoping that everyone just takes a deep breath and looks at what happened and the breadth and depth of regulations already in place,” Dimon said. “Obviously, when something happens like this you should adjust, think about it.”
Down the road, Dimon said, he could see potential limitations on held-to-maturity assets and perhaps more total loss-absorbing capacity for certain banks, as well as more scrutiny around interest-rate exposure.
“It doesn’t have to be a revamp of the whole system — just recalibrating things the right way,” Dimon said. “The outcome you should want is very strong community and regional banks. And certain [drastic] actions … could actually make them weaker. So that’s all it is.”
JPMorgan is also expecting to absorb higher capital requirements under the so-called Basel IV international banking measures, as well as an assessment to banks of the costs of the collapse of Silicon Valley Bank and Signature Bank by the Federal Deposit Insurance Corp., he said.
Also read: JPMorgan Chase CEO Jamie Dimon says looser rules did not cause recent bank failures
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First-quarter earnings season kicks off this week. Results from big U.S. banks later in the week will be heavily scrutinized for the impact of the past month’s turmoil in the sector. Economic-data highlights will include the latest inflation data and minutes from the Federal Open Market Committee’s late-March meeting.
Albertsons
and
CarMax
will report on Tuesday, followed by
Delta Air Lines
and
Fastenal
on Thursday. Things pick up on Friday:
Citigroup
BlackRock
and
UnitedHealth Group
are all scheduled to release their first-quarter results.
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“We wanted to put all our energy and our efforts into turning the situation around and putting the bank back on track. It pains me that we didn’t have the time to do so, and that in that fateful week in March our plans were disrupted. For that I am truly sorry. I apologize that we were no longer able to stem the loss of trust that had accumulated over the years, and for disappointing you.
That’s Axel Lehmann, the chairman of Credit Suisse, addressing shareholders after the deal to be purchased at a cut-rate price by UBS, ending 167 years of independence. Shareholders at neither Credit Suisse
CSGN,
nor UBS
UBSG,
will get a chance to vote on the deal.
Credit Suisse shares were trading at 0.81 francs, just below the 0.84 franc per share offer the UBS bid is now worth. A year ago, Credit Suisse was worth more than 7 francs per share.
Lehmann, as noted in his speech, was not at the bank for its many scandals and trading debacles, most notably but hardly limited to the losses from the blowup of the Archegos family office and the freezing of funds tied to Greensill.
“The period from October to March was not long enough. One legacy issue after another had already seen trust eroded – and with it, patience dwindled. At that, we failed. It was too late. The bitter reality is that there wasn’t enough time for our strategy to bear fruit,” said Lehmann.
He said the deal “had to go through,” or the bank would have to restructure under Swiss banking law. “This would have led to the worst scenario, namely a total loss for shareholders, unpredictable risks for clients, severe consequences for the economy and the global financial markets,” he said.
CEO Ulrich Körner made a similar apology. “We ran out of time. This fills me with sorrow. What has happened over the past few weeks will continue to affect me personally and many others for a long time to come,” he said.
He specifically tied the collapse of SVB Financial and Signature Bank to its own demise.
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U.S. stocks have shrugged off a number of threats since the start of the year, powering through the worst U.S. bank failures since the 2008 financial crisis, while resisting the pull of rising short-term Treasury yields.
This helped all three main U.S. equity benchmarks finish the first quarter in the green on Friday, but that doesn’t change the fact that the S&P 500 index, the main U.S. equity benchmark, has barely budged since last summer.
“The market has handled a lot of gut punches recently and it’s still standing in this range,” said JJ Kinahan, CEO of IG North America, owner of brokerage firm Tastytrade. “I think that’s a sign that the market is very healthy.”
The S&P 500 index
SPX,
traded at 4,110.41 on Sept. 12, 2022, according to FactSet data, just before aggressive Federal Reserve commentary on interest rates and worrisome inflation data triggered a sharp selloff. By comparison, the index finished Friday’s session at 4,109.31.
Some equity analysts expect it to take months, or perhaps even longer, for U.S. stocks to break out of this range. Where they might go next also is anyone’s guess.
Investors likely won’t know until some of the uncertainty that has been plaguing the market over the past year clears up.
At the top of the market’s wish list is more information about how the Fed’s interest rate hikes are impacting the economy. This will be crucial in determining whether the central bank might need to keep raising interest rates in 2024, several analysts told MarketWatch.
The S&P 500 has vacillated in a roughly 600-point range since September, but at the same time, the number of outsize swings from day-to-day has become even more pronounced, making it more difficult to ascertain the health of the market, analysts said.
The S&P 500 rose or fell by 1% or more in 29 trading sessions in the first quarter, including Friday, when the S&P 500 closed 1.4% higher on the last session of the month and quarter, according to Dow Jones Market Data.
That’s nearly double the quarterly average of just 14.9 days going back to 1928, according to Dow Jones Market Data. The S&P 500 was created in 1957, and performance data taken from before then is based on a historical reconstruction of the index’s performance.
Stocks also look almost placid in comparison with other assets. For example, Treasurys saw an explosion of volatility in the wake of the collapse of Silicon Valley Bank in March. The 2-year Treasury yield
TMUBMUSD02Y,
logged its largest monthly decline in 15 years in March as a result.
“You can’t find any clues about where we’re going by watching the S&P 500,” said John Kosar, chief market strategist at Asbury Research, in a phone interview with MarketWatch. “Ten years ago, you could look at the movement of the S&P 500 and a simple indicator like volume and get a back-of-the-envelope idea of how healthy the market is. But you can’t do that anymore because of all this intraday volatility.”
The S&P 500’s 7% advance in the first quarter of this year has helped to mask weakness underneath the surface. Specifically, only 33% of S&P 500 companies’ shares have managed to outperform the index since the start of the quarter, well below the long-term average, according to figures provided to MarketWatch by analysts at UBS Group UBS.
If it weren’t for a flight-to-safety rally in large capitalization technology names like Apple Inc.
AAPL,
Microsoft Corp.
MSFT,
and Nvidia Corp.
NVDA,
the S&P 500 and Nasdaq would likely be in much worse shape.
Advancing megacap tech stocks have helped the Invesco QQQ
QQQ,
Trust exchange-traded fund, which tracks the Nasdaq 100, enter a fresh bull market in the past week, as the closely watched market gauge closed more than 20% above its 52-week closing low from late December, according to FactSet data. That’s helped to offset weakness in cyclical sectors like financials and real estate.
Tech behemoths have also benefited from the hype around artificial intelligence platforms like OpenAI’s ChatGPT.
Confusion about the Fed’s quantitative tightening efforts to reduce the size of its balance sheet also helped muddle the outlook for markets.
For example, the size of the Fed’s balance sheet has increased again in recent weeks as banks have tapped the central bank’s emergency lending programs in the wake of the failure of two regional banks, undoing some of the central bank’s efforts to shrink its balance sheet by allowing some of its Treasury and mortgage-backed bond holdings to mature without reinvesting the proceeds.
Some analysts said this is akin to sending the market mixed signals.
“It seems to be both tightening and loosening right now,” said Andrew Adams, an analyst with Saut Strategy, in a recent note to clients.
U.S. stocks have remained rangebound for long stretches in the past.
Beginning in late 2014, the S&P 500 traded in a tight range for roughly two years. Between Jan. 1, 2015 and Nov. 9, 2016, the day after former President Donald Trump defeated Hillary Clinton to become president of the U.S., the S&P 500 gained less than 100 points, according to FactSet data.
At the time, equity analysts blamed signs of softening economic activity in China and weakness in the U.S. energy industry for the market’s lackluster performance.
But after once it became clear that Trump would win the White House, stocks embarked on a steady ascent as investors bet that the Republican economic agenda, which included corporate tax cuts and deregulation, would likely bolster corporate profits.
It wasn’t until the fourth quarter of 2018 that stocks turned volatile once again as the S&P 500 wiped out its gains from earlier in the year, before ultimately finishing 2018 with a 6.2% drop for the year, according to FactSet.
As investors brace for a flood of first-quarter corporate earnings in the coming weeks, Kinahan said he expects stocks could remain range bound for at least a few more months.
“There’s going to be a very cautious outlook still, which should keep us in this range,” he said.
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UBS Group AG said Wednesday that it has decided to appoint Sergio P. Ermotti as its new chief executive replacing Ralph Hamers, and said the change is a result of its planned acquisition of rival Credit Suisse Group AG.
The appointment of Mr. Ermotti–who was UBS’s UBS CH:UBSG CEO in the aftermath of the global financial crisis and stepped down in 2020 after nine years in the role–will become effective on April 5, the bank said.
Mr….
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Judging by the major indexes, it will take more than the Federal Reserve raising interest rates in the midst of the worst banking mess since the 2008 financial crisis for stock-market investors to lose their cool.
“Investors are broadly assuming that regulators are going to step in and ringfence the sector if need be, and that’s what keeps it from spilling over to the broader market,” said Anastasia Amoroso, chief investment strategist at iCapital, in a phone interview.
There’s also a second reason. Investors see the banking woes forcing the Fed to pause the rate-hike cycle or even begin cutting as early as June, she noted. An end to the yearlong rise in rates will remove a source of pressure on stock-market valuations.
But gains last week, which came amid volatile trading, aren’t sending an all-clear signal, stock-market analysts and investors said.
Banking worries haven’t gone away after the failure of three U.S. institutions earlier this month and UBS Group AG’s
UBS,
UBSG,
agreement to acquire troubled Swiss rival Credit Suisse
CS,
CSGN,
in a merger forced by regulators. Jitters were on display Friday when shares of German financial giant Deutsche Bank
DB,
It’s the fear of runs on U.S. regional banks that still keep investors up at night. Markets might face a test Monday if investors react to Federal Reserve data released after Friday’s closing bell showed deposits at small U.S. banks dropped by a record $119 billion in the weekly period ended Wednesday, March 15, following Silicon Valley Bank’s collapse the preceding Friday.
That sensitivity to deposits was on display last week. U.S. Treasury Secretary Janet Yellen was blamed for a late Wednesday selloff that saw the Dow end over 500 points lower after she told lawmakers that her department hadn’t considered or discussed a blanket guarantee for deposits. On Thursday, she told House lawmakers that, “we would be prepared to take additional actions if warranted.”
Deposits are “the epicenter of the crisis of confidence” in U.S. banks, said Kristina Hooper, chief global market strategist at Invesco, in a phone interview. Anything that suggests there won’t be full protection for deposits is bound to worry investors in a charged environment.
See: Is the deposit insurance system broken? 9 things you need to know.
Cascading runs on regional banks would stoke fears of further bank failures and the potential for a full-blown financial crisis, but short of that, pressure on deposits also underline fears the U.S. economy is headed for a credit crunch.
Speaking of a credit crunch. Deposits across banks have been under pressure after the Federal Reserve began aggressively raising interest rates roughly a year ago. Since then, deposits at all domestic banks have fallen by $663 billion, or 3.9%, as money flowed into money-market funds and bonds, noted Paul Ashworth, chief North American economist at Capital Economics, in a Friday note.
“Unless banks are willing to jack up their deposit rates to prevent that flight, they will eventually have to rein in the size of their loan portfolios, with the resulting squeeze on economic activity another reason to expect a recession is coming soon,” he wrote.
Meanwhile, activity in U.S. capital markets has largely dried up since Silicon Valley Bank’s collapse on March 10, noted Torsten Slok, chief global economist at Apollo Global Management, in a recent note.
There was virtually no investment-grade or high-yield debt issuance and no initial public offerings on U.S. exchanges, while merger and acquisition activity since then represents completed deals that were initiated before SVB’s collapse, he said (see chart above).
“The longer capital markets are closed, and the longer funding spreads for banks remain elevated, the more negative the impact will be on the broader economy,” Slok wrote.
The Dow Jones Industrial Average
DJIA,
rose 1.2% last week, ending a back-to-back run of declines. The S&P 500
SPX,
rose 1.4%, recouping the large-cap benchmark’s March losses to turn flat on the month. The Nasdaq Composite
COMP,
saw a 1.7% weekly rise, leaving the tech-heavy index up 3.2% for the month to date.
Regional bank stocks showed some signs of stability, but have yet to begin a meaningful recovery from steep March losses. The SPDR S&P Regional Banking ETF
KRE,
eked out a 0.2% weekly gain but remains down 29.3% in March. KRE’s plunge has taken it back to levels last seen in November 2020.
Look beneath the surface, and the stock market appears “bifurcated,” said Austin Graff, chief investment officer and founder of Opal Capital.
Much of the resilience in the broader market is attributable to gains for megacap technology stocks, which have enjoyed a flight-to-safety role, he said in a phone interview.
The megacap tech-heavy Nasdaq-100
NDX,
was up 6% in March through Friday’s close, according to FactSet, while regional bank shares dragged on the small-cap Russell 2000
RUT,
down 8.5% over the same stretch.
For investors, “the expectation should be for continued volatility because we do have less money flowing through the economy,” Graff said. There’s more pain to be felt in highly levered parts of the economy that weren’t prepared for the speed and scope of the Fed’s aggressive rate increases, including areas like commercial real estate that are also struggling with the work-from-home phenomenon.
Graff has been buying companies in traditionally defensive sectors, such as utilities, consumer staples and healthcare, that are expected to be resilient during economic downturns.
Invesco’s Hooper said it makes sense for tactical allocators to position defensively right now.
“But I think there has to be a recognition that if the banking issues that we’re seeing do appear to be resolved and the Fed has paused, we are likely to see a market regime shift…to a more risk-on environment,” she said. That would favor “overweight” positions in equities, including cyclical and small-cap stocks as well as moving further out on the risk spectrum on fixed income.
The problem, she said, is the well-known difficulty in timing the market.
Amoroso at iCapital said a “barbell” approach would allow investors to “get paid while they wait” by taking advantage of decent yields in cash, short- and long-term Treasurys, corporate bonds and private credit, while at the same time using dollar-cost averaging to take advantage of opportunities where valuations have been reset to the downside.
“It doesn’t feel great for investors, but the reality is that we’re likely trapped in a narrow range for the S&P for a while,” Amoroso said, “until either growth breaks to the downside or inflation breaks to the downside.”
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U.S. stocks finished Friday higher, despite a jump in the cost of Deutsche Bank’s credit-default swaps helping to reignite banking-sector worries. The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite each booked weekly gains.
For the week, the Dow gained 1.2%, while the S&P 500 rose 1.4% and the Nasdaq advanced 1.7%, according to FactSet data. The Dow snapped two straight weeks of losses, while the S&P 500 and Nasdaq each booked back-to-back weekly gains.
U.S. stocks ended modestly higher Friday to notch weekly gains even as worries over the banking system lingered.
Bank concerns have cast a “heavy cloud over the market,” with investors worried about “weak links,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management, in a phone interview Friday. Ma said he expects investors will be looking to sell, potentially into any rallies, “until some of these clouds are lifted.”
Shares of Germany’s Deutsche Bank AG
DBK,
DB,
dropped Friday, after the cost of insuring the bank against a credit default jumped. The bank’s credit-default swaps had risen to the highest level since late 2018, according to a Reuters report Friday.
Treasury Secretary Janet Yellen announced Friday she called an unscheduled meeting of the Financial Stability Oversight Council or FSOC which was created in the wake of the 2008 financial crisis to help the government combat threats to financial stability. The FSOC issued a short statement after the market closed Friday saying that “while some institutions have come under stress, the U.S. banking system remains sound and resilient”.
“Clearly, somebody thinks there are some concerns there,” said Randy Frederick, managing director of trading and derivatives at Charles Schwab. The problems facing European banks stem back to the era of negative interest rates, which set banks up for large losses on their bond holdings, he said.
The selloff in Deutsche Bank shares weighed on banks in the U.S. and Europe, as banking-sector fears reemerged. Shares of UBS Group
UBS,
which recently agreed to buy rival Credit Suisse Group, fell Friday.
Other major European lenders, including Italy’s UniCredit S.p.A
UCG,
and Spain’s Banco Santander SA
SAN,
also saw their shares sink.
“The thing that’s important to know about financials is there probably are banks that have problems, but there are others that don’t,” Frederick told MarketWatch during a phone interview. “People need to do some research.”
The S&P 500’s financial sector fell 0.1% Friday, according to FactSet data.
While banking-sector woes have hammered the financial sector this month, the outperformance of megacap technology stocks and other sectors have helped prop up the broader U.S. equities market. So far this month, the S&P 500 index is up less than 0.1%, FactSet data show.
Concerns about the fragility of the banking sector have been percolating following a year of the Federal Reserve’s aggressive interest rate hikes. On Wednesday, the Fed announced that it hiked its policy rate by a quarter point to a range of 4.75% to 5% while projecting it could deliver one more 25 basis-point hike in 2023.
In his first comments since the rapid collapse of Silicon Valley Bank two weeks ago, St. Louis Federal Reserve President James Bullard said Friday the latest drop in Treasury yields could help cushion some of the stress facing the banking sector.
Yields on the 2-year Treasury note
TMUBMUSD02Y,
and 10-year Treasury note
TMUBMUSD10Y,
each fell Friday in their third straight week of declines, according to Dow Jones Market Data. Two-year yields slid to 3.777% on Friday, the lowest level since September based on 3 p.m. Eastern time levels, while 10-year Treasury yields dropped to 3.379%, their lowest rate since January.
Read: ‘Red alert recession signals.’ Gundlach expects the Fed to cut rates substantially ‘soon.’
In U.S. economic data, a report Friday on sales of durable goods showed orders fell 1% in February, largely because of waning demand for passenger planes and new cars. Meanwhile, the S&P Global Flash U.S. services-sector index rose to an 11-month high of 53.8 in March.
The role of regional banks in the U.S. economy is “huge,” said Sandi Bragar, chief client officer at wealth management firm Aspiriant, in a phone interview Friday. Bragar said she worries that recent regional bank failures will result in a pullback in lending that leads to slower economic growth and potentially a recession.
“Our stance has been to be very diversified and we have been remaining on the defensive side of things,” she said.
Within equities, that has meant holding “high-quality companies” that should be resilient in “poor economic times,” including stocks in areas such as healthcare, information technology and consumer staples, said Bragar.
DB,
shares dropped 8.5% but finished off lows seen when the German bank’s credit default swaps jumped without an apparent catalyst.
–Steve Goldstein contributed to this report.
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