Good morning to yet another day of the bank crisis. Phil Rosen here — can you believe it's been almost two months since Silicon Valley Bank collapsed?
But here we are still talking about which banks could be next to fall.
Yesterday, shares of both Western Alliance and PacWest banks saw steep sell-offs, and the former endured wild swings after the bank denied a report that it was exploring a sale.
On the day, Western Alliance dropped as much as 62% before cutting those losses in half by the close of Thursday trading.
Get this — a new Gallup poll found nearly half(!) of Americans are currently worried about the safety of their money being stored in their banks.
Today we're looking at what some of Wall Street's top investors and commentators say has to happen to curb the banking tumult.
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1. Billionaire investor Bill Ackman said that banks across the US will be under threat unless regulators move to insure all deposits.
In his view, the entire regional banking sector will remain at risk until the FDIC steps up its insurance regime.
"We are running out of time to fix this problem," Ackman said Wednesday, two days after First Republic was taken over by JPMorgan.
The shuttered bank had disclosed in its first-quarter earnings report that customers pulled over $100 billion of deposits in three-months.
"How many more unnecessary bank failures do we need to watch before the FDIC, US Treasury, and our government wake up?" Ackman said. "We need a systemwide deposit guarantee regime now."
The FDIC guarantees deposits of up to $250,000, meaning that customers who keep more than that in their accounts won't get back any money above that limit in the event of a collapse.
But even if the regulator did insure more money, former FDIC chair Jelena McWilliams said Thursday a move like that would only cost banks' customers more.
"The cost will be borne by somebody," she said. "It will be the bank, and inevitably that cost will be borne by its customers. I'm just warning lawmakers and policymakers, whatever they do, there's going to be a cost associated with that."
Deposit insurance aside, a lot of people are blaming the Fed for this mess, DoubleLine Capital chief Jeff Gundlach among them.
The famed bond investor said this week that money's going to keep flowing out of banks until policymakers cut interest rates and loosen up monetary policy.
Recall that much of the weakness that ultimately toppled Silicon Valley Bank last month was caused by large losses on its bond holdings, which plummeted in value as interest rates increased with aggressive Fed tightening.
Americans today have "absolutely no reason to keep their money in" banks, and that trend will continue as credit conditions remain tight, Gundlach said.
What does the future hold for US banks? Is the worst of the crisis over or is there more to come? Tweet me (@philrosenn) or email me (prosen@insider.com) to let me know.
In other news:
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2. US stock futures rise early Friday, after Apple's latest earnings report gave investors reason for optimism. Meanwhile, the latest data on US jobs is due to be released later today. Check out the latest market moves.
3. Earnings on deck: HSBC, Dominion Energy, and Adidas, all reporting.
4. Bank of America detailed which retail stocks have more than 20% upside. These names look poised to benefit from the mass closures of Bed Bath & Beyond stores, strategists said, and they could see higher market share. Buy into these three names now.
5. The US and China are on a collision course that will worsen the geopolitical economic depression. That's according to "Dr. Doom" economist Nouriel Roubini. See what else he had to say.
6. A stock market portfolio created by ChatGPT is outperforming the top UK investment funds. The finance website Finder asked the large language model to pick names using investing principles from competing funds — and it boasted Meta, Microsoft, and Intel as top performers.
7. Stock market investors should keep an eye out for five key indicators with volatility set to ramp up through the end of the year. Turbulence is likely to accelerate in the markets and economy amid bank troubles, tighter credit conditions, and elevated interest rates, Comerica Wealth Management says. Here's what to watch.
8. A 30-year-old, part-time real estate investor pulls in $20,000 a month from Airbnb. She explained three strategies she used to start making money on the platform in less than a year — and how she aims to hit her long-term goal of $1 million annual revenue.
9. This contrarian investor shared two vital lessons he learned from his highly profitable association with legend Paul Tudor Jones. Brandywine Asset Management's Mike Dever spoke about watching Jones deliver massive returns and the lessons learned from their time together.
Markets Insider
10. Shopify soared 28% Thursday after it reported strong earnings and announced it sold its logistics business. The e-commerce giant also revealed plans to slash headcount by 20%.
Curated by Phil Rosen in New York. Feedback or tips? Tweet @philrosenn or email prosen@insider.com.
Edited by Max Adams (@maxradams) in New York and Hallam Bullock (@hallam_bullock) in London.