Wednesday, August 2, 2023

🏦Is This the Most Insolvent Bank in the United States?

Good morning. Over the weekend, regulators at the FDIC closed Heartland Tri-State Bank. While not...
It's the monthly jobs numbers today and they're not going to be pretty and will be possibly the tip of the iceberg as we head into May.

Good morning. Over the weekend, regulators at the FDIC closed Heartland Tri-State Bank. While not the headline collapse of Silicon Valley Bank or First Republic Bank, it's a reminder that the banking sector still has some issues that need to be resolved.

The biggest problem could come from our central bank, the Federal Reserve. While it's best known right now for raising interest rates, the bank's balance sheet makes Silicon Valley Bank look responsible. Rising yields have cut into the central bank's bond portfolio, with about $910 billion in losses on paper at the moment.

Of course, unlike a local bank, the Fed won't get a depositor rush. And their ability to create money as needed is why they're absorbing the losses so far. But it's clear that the Fed is juggling a lot right now, and any small move here could lead to a further banking crisis or another resurgence in inflation. While markets have been holding up well, traders may still want to look for some downside opportunities – they may just pay off now that they're not expected.

Now here's the rest of the news:

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MARKETS
DOW 35,630.68 +0.20%
S&P 4,576.73 -0.27%
NASDAQ 14,283.91 -0.43%
*As of market close
Markets closed mixed on Tuesday, with tech stocks trending slightly down.
Oil dipped 0.3 percent, closing at $81.58 per barrel.
Gold slid 1.4 percent, last going for $1,982 per ounce.
Cryptocurrencies traded mixed, with bitcoin at $29,229 at the stock market close.

Today's TOP TIPS
Don't Overlook Profit Opportunities In the AI Software Space
So far, this year has been kind to semiconductor companies. That's because most of them can benefit from the exploding interest in AI technology. However, the hardware companies may have run up a bit too quickly.

The software companies behind AI likely have more room to run. There's a good amount of competition, both in AI prompts, and for developing AI software tools that can combine and leverage the power of multiple pieces of AI software.

» FULL STORY

Insider Activity Report: Northwest Bancshares (NWBI)
Scott Watson, CIO at Northwest Bancshares (NWBI), recently bought 5,000 shares. The buy increased his stake by 20 percent, and came to a total cost just over $61,000.

This marks the first buy since a company director bought 1,675 shares back in June. And a cluster of directors bought back in May, and the company CEO picked up shares in late April. A few EVPs have been sellers of shares in small amounts in the past few months.

» FULL STORY

Unusual Options Activity: C3.ai (AI)
Artificial intelligence software company C3.ai (AI) has nearly quadrupled since the start of the year. one trader sees a short-term pullback in the coming weeks.

That's based on the September 15 $42.50 puts. With 44 days until expiration, 5,021 contracts traded compared to a prior open interest of 123, for a 33-fold rise in volume on the trade. The buyer of the calls paid $7.11 to make the bearish bet.

» FULL STORY

IN OTHER NEWS
Citigroup Gives S&P 500 Price Target of 5,000

Analysts at Citigroup (C) have increased their price target on the S&P 500 to 5,000. The index is currently at about 4,600, so that implies another 7 percent move higher this year. The index has already rallied about 20 percent since the start of the year, far in excess of its historic returns closer to 10 percent.
Banks See Tightening Loan Conditions Ahead

The Senior Loan Officer Opinion Survey, conducted by the Federal Reserve, indicates that banks have tightened standards for credit card and consumer loans, and are likely to continue tightening as interest rates continue to rise. The consumer loan space amounts to about $1.9 trillion, and a steep cutback in consumer borrowing could lead to slower economic growth.
Coinbase CEO Reveals Reason Behind SEC Lawsuit

Brian Armstrong, CEO at cryptocurrency brokerage Coinbase (COIN) revealed that the Securities and Exchange Commission (SEC) wanted the company to shut down trading on all cryptocurrencies except bitcoin. That move would have shut down the crypto industry in the U.S. if carried out. The SEC subsequently sued Coinbase.
Mall Valuations Continue to Plunge

As stores vacate and malls become more empty than full, even after adding in space such as coffeehouses and churches, valuations have dropped. The Crystal Mall in Connecticut was valued at $150 million in 2012, but just sold earlier this year for $9.5 million. Many malls are looking to convert into mixed use space.
GM Ships Chevy Blazer EV

General Motors (GM) has shipped its first EV version of the Chevy Blazer. The electric SUV's model is coming in with a higher price point that expected, but GM is confident that it can scale up EV sales and potentially even topple Tesla Motors (TSLA) as early as 2025.

S&P 500 MOVERS
TOP
ANET 18.76%
GPN 9.578%
CAT 8.376%
ETN 6.892%
LDOS 6.693%
BOTTOM
ZBRA 17.756%
NCLH 11.781%
ROK 7.669%
ZBH 4.654%
CCL 4.459%

Quote of the Day
Earnings coming in not as bad as feared, clearly that's a good thing for the market. Part of the reason the market's rallied… is that in addition to the good news to the economy that we've seen all year, we're also seeing that corporate earnings really seem to have not been impacted as much as people have been concerned about. If [big tech stocks] give really good guidance, we could see this bull market really continue to pick up speed and even see some momentum heading into the fall.
- Chris Zaccarelli, analyst at Independent Advisor Alliance, on how big tech earnings this week could cause the market to continue higher, potentially even making new all-time highs in the next few days, even before moving toward an end-year rally.

Sponsored Content
Worse than a Market Crash?
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Now he's coming forward with a new prediction…

Only this time, he's not predicting a crash. He's forecasting something that could be even more painful — and last even longer — than a crash.

Click Here for All the Details — Including His Unique Solution.


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