U.S. Bank Collapse Causes Market Chaos

Author

Euan Marshall
March 14, 2023

Good Morning,

More government policies have been rolled back in the face of inflation, NZ food prices are increasing at the fastest rate since 1989, "Everything Everywhere All at Once" has dominated the Academy Awards, top-end NZ suburbs see house prices fall by $300,000 or more, and Bitcoin rallies following announced plans to limit the fallout from the collapse of Silicon Valley Bank.

Let's jump in.

Before The Bell

Markets

  • New Zealand's share market was down on the day as investor confidence took a hit following the failure of Silicon Valley Bank during the weekend (Stuff)

  • Australian shares fell 0.5 per cent on Monday as an increasing number of locally listed companies reveal they had exposure to Silicon Valley Bank amid its collapse (AFR)

  • The drop in US yields has sent the US dollar sliding against its major peers. The Australian dollar is leading the charge with a gain of 1.4%, with the euro and the pound both up more than 0.7% and the yen about 0.6% stronger (BBG)

  • A quieter week ahead is expected for local markets after the bustle of the last month's earnings season (NBR)

  • Silicon Valley Bank's collapse is having ripple effects across the New Zealand market, with NZX-listed Comvita and ikeGPS joining Nasdaq-listed space company Rocket Lab in disclosing exposure to the failure (NBR)

  • All eyes are on Allbirds' stock as the Nasdaq-listed shoe and apparel company's stock fell 47% on Friday due to lacklustre results (NBR)

  • Bitcoin and other cryptocurrencies rallied on Monday after U.S. authorities announced plans to limit the fallout from the collapse of Silicon Valley Bank (RT)

Earnings and Data

  • Stats NZ said food prices rose 12% in February when compared with the year earlier, the biggest rise since September 1989 (NBR)

  • On Thursday morning, fourth quarter GDP figures will be released, with a 0.3% quarter-on-quarter contraction expected by ANZ and a 0.5% fall expected by ASB (NBR)

  • Median house prices in some of the country's wealthiest suburbs have fallen $300,000 or more over the past year, CoreLogic data shows (Stuff)

News Summary

  • The government is scrapping the clean car upgrade scheme as part of a suite of measures to free up money to help households deal with cost-of-living pressures (NBR)

  • Prime Minister Chris Hipkins has announced that benefits, superannuation payments and student support payments would increase by 7.22% on April 1st (NBR)

  • Silicon Valley Bank's collapse could force both the Australian Reserve Bank and the US Federal Reserve to pause planned rate rises if actions by US regulators fail to limit financial contagion (AFR)

  • U.S. authorities launched emergency measures to shore up confidence in the banking system after the failure of Silicon Valley Bank threatened to trigger a broader financial crisis (RT)

  • Everything Everywhere All At Once, a film made for less than $20 million was the big winner at the 95th Academy Awards, picking up best picture and six other trophies over some of the highest grossing pictures in Hollywood history (BBG)

  • Nuclear-armed North Korea test-fired two strategic cruise missiles from a submarine on Sunday, just as U.S.-South Korea military drills were set to begin (RT)

Deal Flow

Investments / M&A

  • Qualtrics International Inc said on Monday it will go private after the customer survey software maker's controlling shareholder, SAP SE, accepted a $12.5 billion bid from an investor consortium led by Silver Lake and Canada Pension Plan Investment Board (RT)

  • HSBC Holdings Plc is set to buy the UK arm of Silicon Valley Bank, the culmination of a frantic weekend where ministers and bankers explored various ways to avert the SVB's unit collapse (BBG)

  • Australia's Newcrest Mining and suitor Newmont Corp have agreed terms for a round of early-stage takeover talks, ending a four-week standoff that threatened to spoil a potential AUD$20 billion-plus deal (AFR)

VC & Fundraising

  • Better Beer, the fast-growing zero-carb beer brand which is 42 per cent owned by a pair of comedians, is embarking on a capital raising of up to $20 million AUD to help underpin ambitious plans to increase volumes by a factor of five (AFR)

  • Capital-hungry AirTrunk has been back in funding markets, returning with another $650 million sustainability linked loan and an undisclosed equity injection from its shareholders Macquarie Asset Management and PSP Investments (AFR)

Daily Picks

  • Check out NBR's analysis on the economic cost of NZ's natural disasters here

  • Read AFR's rundown on the Silicon Valley Bank collapse here 

Job Board

New Zealand

  • Murray & Co Investment Banking Intern and Grad Roles

    • Apply here for internships

    • Apply here for graduate roles

Australia

  • Goldman Sachs Investment Banking Intern

    • Apply here by 18th July for Melbourne and Perth and August 1 for Sydney

  • Macquarie gradate roles

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