Inventories were up 16% from the year prior after the company reported a 44% jump the previous quarter, Nike said on Tuesday.
4:45 p.m. ET, March 21, 2023
Dow closes up more nearly 300 points as regional banks rebound
From CNN's Nicole Goodkind
US stocks closed higher on Tuesday as shares of regional banks rebounded from record-breaking losses earlier in the month.
Shares of troubled lender First Republic led the way, soaring 30%, making back a large portion of the losses from its 47% plunge in the prior session. The SPDR Regional Banking ETF (KRE), which tracks a number of small and mid-sized bank stocks, gained 5.8% for the day.
The boost came after US Treasury Secretary Janet Yellen said on Tuesday at an event hosted by the American Bankers Association that the federal government was willing to guarantee more deposits should the current banking meltdown continue.
Investors were also buoyed by news that JPMorgan Chase CEO Jamie Dimon was advising the beleaguered First Republic Bank on next steps and strategy.
Wall Street will closely watch the Federal Reserve as the central bank announces its next monetary policy decision on Wednesday afternoon.
Investors are largely pricing in a quarter-point rate hike and will listen closely to see if Fed Chair Jerome Powell is able to justify hiking rates while reassuring panicked markets that the Fed can maintain the safety and security of the banking system.
As stocks settle after the trading day, levels might still change slightly.
2:28 p.m. ET, March 21, 2023
The Fed lent out $153 billion last week
From CNN's Alex Matthews
2:12 p.m. ET, March 21, 2023
First Republic shares surge 53% but top bank CEOs aren’t working on new rescue plan, source says
From CNN's Matt Egan and Allison Morrow
Leading bank CEOs are not working on a new rescue plan for regional bank First Republic, a person familiar with the matter tells CNN.
First Republic received a $30 billion lifeline just last week from 11 of the nation’s largest banks, including JPMorgan Chase, Bank of America and Citigroup.
Despite that industry-led rescue, First Republic’s share price kept plunging and its credit ratings were downgraded.
The Wall Street Journal reported Monday that JPMorgan CEO Jamie Dimon is leading talks among bank CEOs about fresh efforts to stabilize First Republic, including a potential investment by the banks themselves in First Republic.
The 11 bank CEOs have discussed the First Republic situation, the person familiar with the matter tells CNN. However, the source stresses there is no separate rescue plan for First Republic currently being worked on by the bank CEOs.
Meanwhile, major bank CEOs are gathering Tuesday and Wednesday in Washington for a previously-scheduled meeting, the person familiar with the matter said.
That meeting is being held by the Financial Services Forum, an alliance of the biggest eight banks that includes Bank of America, Goldman Sachs and JPMorgan.
First Republic and the broader stress in the banking system will be among the topics discussed at the bank CEO meeting, the source said.
After hitting a record low on Monday, shares of First Republic Bank surged 53% Tuesday afternoon as Wall Street anticipated another industry-led lifeline or potential sale of the beleaguered banks.
Bank stocks were broadly higher Tuesday.
2:14 p.m. ET, March 21, 2023
Swiss government tells Credit Suisse to suspend some bonus payments
From CNN's Olesya Dmitracova
Switzerland’s finance department has ordered Credit Suisse to suspend the payment of certain types of bonuses to the bank’s staff.
“This measure relates to already granted but deferred remuneration for the financial years up to 2022, for example in the form of share awards,” the country’s Federal Council said in a statement released late Tuesday.
Deferred payments that are already in the process of being made are exempt, it added.
The council cited a Swiss law that stipulates the imposition of “remuneration-related measures if a systemically important bank is directly or indirectly granted state aid from federal funds.”
As Credit Suisse teetered on the brink of collapse last week, it drew on a cash lifeline from the Swiss central bank. But that wasn’t enough to repair the lender’s shredded reputation and, over the weekend, the Swiss government brokered a rescue takeover of Credit Suisse by larger rival UBS.
As part of the deal, the Swiss government is offering to protect UBS against losses of 9 billion Swiss francs ($9.8 billion), and the Swiss central bank has said it will provide liquidity of up to 200 billion Swiss francs ($217 billion).
The Federal Council has also instructed the finance department to propose further measures on variable remuneration, or bonuses, for the financial years up to 2022 and onward.
1:20 p.m. ET, March 21, 2023
Wall Street waits with bated breath for outcome of Fed meeting
Wall Street was mostly quiet one day ahead of a rate announcement from the Federal Reserve. The Dow was up by around 0.5%, the S&P gained 0.7% and the Nasdaq was up 0.6% by the end of morning trade.
European stocks ended their day higher after mixed trading due to ongoing skittishness about the collapse of Credit Suisse.
Europe’s Stoxx Europe 600 index closed up 1.3%, while the FTSE jumped by around 1.8%. Shares in Credit Suisse rose by 7% and UBS rose 12%.
Shares of First Republic Bank bounced back sharply from a record low after JPMorgan Chase’s investment bank was hired to advise the ailing New York-based bank and to help management explore its options, including potentially raising additional capital.
Other regional banks also rallied: The SPDR Regional Banking ETF, which tracks a number of small and mid-sized bank stocks, got a 5.7% boost by the end of morning trading.
Investors expect the central bank to approve a quarter-point hike as Fed Chair Jerome Powell seeks middle ground, neither straining the economy to breaking point nor pulling too far back on his yearlong attack on inflation.
"Powell has been stuck between a rock and a hard place from the moment he became Chair," Ann Berry, founder of Threadneedle Ventures, told CNN's Christine Romans. "History won’t judge kindly the late start to Fed tightening and the failure to catch SVB’s obviously flawed risk management."
12:34 p.m. ET, March 21, 2023
Europe’s top regulator: US rollback of banking rules was "damaging"
From CNN's Anna Cooban
The European Central Bank’s top banking supervisor said Tuesday that the capital and liquidity positions of European banks was “solid,” while cautioning that signs of credit risk were appearing in parts of their loan books.
“Banks’ capital and liquidity positions remain solid and well above minimum requirements,” the ECB’s Andrea Enria told European Union lawmakers.
But European banks needed to be watching carefully for risks to their funding and liquidity that could arise from “the fast-paced adjustment of interest rates,” he said.
The ECB was also closely monitoring “increasing credit risk in certain sectors,” Enria said. While non-performing loans — loans where the borrower misses repayments — have declined overall, the central bank has seen “some upticks,” particularly in the area of consumer finance, Enria said.
But he emphasised the overall strength of European banks and drew a stark comparison with lenders in the United States. Enria said that the decision of US officials in 2018 to roll back some regulations applied to banks following the 2008 financial crisis had proved “damaging.”
Under the pared-back rules, small and mid-sized banks — those with assets below $250 billion, like now-collapsed Silicon Valley Bank — were no longer obliged to undergo annual tests by the Federal Reserve of their ability to withstand financial stress.
ECB President Christine Lagarde said in a press conference Monday that regulations for smaller-sized banks had not been weakened in Europe.
Basel III, a set of international standards developed in response to the 2008 crisis, applied to 2,200 European banks, compared with just 14 in the United States, Lagarde said.
10:40 a.m. ET, March 21, 2023
Yellen: We have a ‘very strong and resilient’ banking system and everyone needs to shore up confidence
From CNN's Matt Egan
US Treasury Secretary Janet Yellen emphasized Tuesday that the American banking system remains sound and called on the government and industry to boost public confidence in the banks.
“I do believe we have a very strong and resilient banking system and all of us need to shore up the confidence of depositors that that’s the case,” Yellen said at an event hosted by the American Bankers Association..
Yellen added that community banks in particular are healthy and urged them to reassure their customers.
The Treasury secretary reiterated that the federal government would be willing to rescue uninsured depositors at small banks if lenders suffer bank runs, raising the specter of contagion.
“We are ready and prepared to take the steps that are necessary to ensure depositors that the banking system and their deposits are safe,” Yellen said.
10:28 a.m. ET, March 21, 2023
Janet Yellen on bank failures: ‘This is different from 2008’
From CNN's Matt Egan
Treasury Secretary Janet Yellen stressed on Tuesday that the ongoing stress in the banking industry is quite different from the 2008 financial meltdown.
“This is different from 2008. 2008 was a solvency crisis. Rather what we’re seeing are contagious bank runs,” Yellen said in response to a question at an event hosted by the American Bankers Association.
In her prepared remarks, Yellen said even though officials don’t have all the details yet about the collapse of Signature Bank and Silicon Valley Bank, “we do know that the recent developments are very different than those of the Global Financial Crisis.”
“Back then, many financial institutions came under stress due to their holdings of subprime assets. We do not see that situation in the banking system today,” Yellen said.
Yellen added that the system is “significantly stronger” than 15 years ago, in large part due to post-crisis reforms like Dodd-Frank.
Yellen said it will be “vital for us to get a full accounting” of what happened in the recent bank failures.
The Federal Reserve has already launched a review into what happened with Silicon Valley Bank, the biggest bank collapse since 2008.
“We will need to reexamine our current regulatory and supervisory regimes and consider whether they are appropriate for the risks that banks face today,” Yellen said.