Futures Pointing To Higher Open On Wall Street As Banking Concerns Ebb

The major U.S. index futures are currently pointing to a higher open on Monday, with stocks likely to see further upside after moving notably higher over the course of the previous week.

Traders may look to build on last week's gains as fears of a global banking crisis have once again eased following the latest developments in the sector.

Shares of First Citizens BancShares (FCNCA) are soaring in pre-market trading after announcing an agreement with the FDIC to purchase substantially all deposits and loans of failed Silicon Valley Bridge Bank.

The FDIC said the transaction included the purchase of about $72 billion of Silicon Valley Bridge Bank's assets at a discount of $16.5 billion.

U.S.-listed shares of Deutsche Bank (DB) may also move back to the upside after German Chancellor Olaf Scholz noted the bank remains profitable and said there's no reason to doubt its future.

Overall trading activity may be somewhat subdued, however, with a lack of major U.S. economic data likely to keep some traders on the sidelines.

Later in the week, traders are likely to keep a close eye on a report on personal income and spending in the month of February, as it includes a reading on inflation said to be preferred by the Federal Reserve.

With the Fed signaling last week that it expects just one more interest rate increase this year, traders will look to the data for clues about the timing of the final rate hike.

Stocks came under pressure early in the session on Friday but staged a significant turnaround over the course of the trading day. The major averages climbed well off their lows of the session and into positive territory.

The major averages all moved to the upside as the day progressed, adding to the gains posted on Thursday. The Dow climbed 132.28 points or 0.4 percent to 32,237.53, the Nasdaq rose 36.56 points or 0.3 percent to 11,823.96 and the S&P 500 advanced 22.27 points or 0.6 percent to 3,970.99.

For the week, the Dow jumped by 1.2 percent, while the S&P 500 and the Nasdaq surged by 1.4 percent and 1.7 percent, respectively.

The early weakness on Wall Street came as renewed concerns about the health of the banking sector inspired some traders to cash in on yesterday's gains.

U.S.-listed shares of Deutsche Bank (DB) moved sharply lower in early trading amid a spike by the German lender's credit default swaps.

Credit Suisse (CS) and UBS Group (UBS) also came under pressure after a report from Bloomberg said they are among banks under scrutiny in a Justice Department probe into whether financial professionals helped Russian oligarchs evade sanctions.

UBS' state-backed acquisition of troubled rival Credit Suisse for 3 billion Swiss francs, or $3.2 billion, helped ease concerns about recent banking industry turmoil earlier in the week.

Selling pressure waned over the course of the session, however, as traders felt the banking concerns may have been overdone amid optimism the Federal Reserve is nearing the end of its tightening cycle.

"This rush to pessimism over everything in finance might be overdone as some companies are well positioned to weather this storm," said Edward Moya, senior market analyst at OANDA. "Good banks should survive this volatility, but developments over the next week will be key."

On the U.S. economic front, the Commerce Department released a report showing a continued slump in orders for transportation equipment led to an unexpected decrease in new orders for U.S. manufactured durable goods in the month of February.

The Commerce Department said durable goods orders slid by 1.0 percent in February after plummeting by a revised 5.0 percent in January.

Economists had expected durable goods orders to increase by 0.6 percent compared to the 4.5 percent plunge that had been reported for the previous month.

Excluding the steep drop in orders for transportation equipment, durable goods orders were unchanged in February after rising by 0.4 percent in January. Ex-transportation orders were expected to inch up by 0.2 percent.

Interest rate-sensitive utilities and commercial real estate stocks moved sharply higher over the course of the session, driving the Dow Jones Utility Average and the Dow Jones U.S. Real Estate Index up by 3.2 percent and 2.6 percent, respectively.

A sharp increase by the price of natural gas also contributed to significant strength among natural gas stocks, with the NYSE Arca Natural Gas Index jumping by 1.9 percent.

Gold stocks also moved notably higher despite a pullback by the price of the precious metal, resulting in a 2.3 percent gain by the NYSE Arca Gold Bugs Index.

Healthcare and pharmaceutical stocks also showed strong moves to the upside, while semiconductor stocks gave back ground following Thursday's rally.

Commodity, Currency Markets

Crude oil futures are surging $1.28 to $70.54 a barrel after falling $0.70 to $69.26 a barrel last Friday. Meanwhile, after sliding $12.10 to $1,983.80 an ounce in the previous session, gold futures are tumbling $30.70 to $1,953.10 an ounce.

On the currency front, the U.S. dollar is trading at 131.56 yen versus the 130.73 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0776 compared to last Friday's $1.0760.


Asian shares ended mixed on Monday as banking worries swirled and Chinese industrial profit data disappointed. A cautious undertone prevailed after Deutsche Bank shares fell heavily on Friday on the lender's surging cost of default cover.

German Chancellor Olaf Scholz offered reassurances about the bank, helping offer some respite to investors worried about the spillover effect of monetary policy shifts.

Investors also awaited more reassurances of stability from regulators and officials to stave off financial contagion.

Chinese shares closed lower as Sinopec posted disappointing earnings and data showed China's industrial profits slumped in the first two months of 2023 from the year before.

The downside remained somewhat limited after International Monetary Fund managing director Kristalina Georgieva said China is showing signs of a robust economic recovery.

The benchmark Shanghai Composite Index dropped 0.4 percent to 3,251.40. Hong Kong's Hang Seng Index tumbled 1.8 percent to 19,567.69.

Japanese shares eked out modest gains as a weaker yen helped offset declines in financial shares. The Nikkei 225 Index rose 0.3 percent to 27,476.87, while the broader Topix closed 0.3 percent higher at 1,961.84.

Uniqlo store operator Fast Retailing rose about 1 percent. Automaker Honda Motor gained 0.6 percent and Suzuki Motor climbed 1.4 percent as the yen pulled back from a nearly two-month high versus the dollar. Chipmaking equipment maker Tokyo Electron led losses to close 2.5 percent lower.

Seoul stocks ended slightly lower on renewed concerns over the health of the global financial system. The Kospi slipped 0.2 percent to 2,409.22.

Hyundai Motor, Samsung Electronics and SK Hynix fell 1-2 percent, while Korea Electric Power Corp. rallied 2.5 percent and SK Innovation soared 4.5 percent.

Australian markets finished marginally higher after suffering losses in the previous two sessions. Sentiment was helped after three regional Fed bank presidents said the U.S. banking system was not facing a liquidity crisis.

Financials posted broad-based gains, while fuel supplier Ampol declined 1.2 percent after it flagged a hit to gasoline production at its refinery in Queensland.


European shares have moved mostly higher Monday as an agreement for the takeover of the assets of failed Silicon Valley Bank (SVB) helped ease fears of a global banking crisis.

First Citizens BancShares has entered into a loss-share transaction for all deposits and loans of the SVB, the U.S. Federal Deposit Insurance Corporation (FDIC) said in a statement.

Sentiment was also underpinned after U.S. Fed officials said there was no indication that financial stress was worsening.

Meanwhile, the German Ifo business climate index improved to 93.3 in March versus 90.9 expected despite the turbulence at some international banks, a survey showed.

While the German DAX Index has jumped by 1.3 percent, the French CAC 40 Index is up by 1.1 percent and the U.K.'s FTSE 100 Index is up by 0.9 percent.

Deutsche Bank has jumped after German Chancellor Olaf Scholz said the bank remains profitable and there's no reason to doubt its future. Peers Commerzbank, Barclays and BNP Paribas have also moved to the upside.

Novartis has soared after the Swiss drug maker reported positive results from a trial of its Kisqali breast cancer drug.

Steel group Salzgitter Group has also moved sharply higher after forecasting better-than-expected earnings for 2023.

U.S. Economic Reports

The Treasury Department is scheduled to announce the results of this month's auction of $42 billion worth of two-year notes at 1 pm ET.

At 5 pm ET, Federal Reserve Board Governor Philip Jefferson is due to speak on Implementation and Transmission of Monetary Policy before an H. Parker Hill Lecture event hosted by Washington and Lee University.

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