STOCK MARKET NEWS: Amazon adds 9K job cuts, Jamie Dimon helps First Republic, Epstein lawsuit update
Amazon plans more job cuts, Jamie Dimon reportedly raising capital for First Republic Bank, JPMorgan and Deutsche Bank to face Epstein lawsuits, Starbucks new CEO. FOX Business is providing real-time updates on the markets, commodities and all the most active stocks on the move.
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A U.S. judge said on Monday JPMorgan Chase & Co and Deutsche Bank AG must face lawsuits accusing them of enabling Jeffrey Epstein's sex trafficking.
The decision by U.S. District Judge Jed Rakoff in Manhattan could expose the banks to additional financial and reputational damage for keeping Epstein as a client, even after the late financier registered as a sex offender.
In a six-paragraph order, Rakoff said JPMorgan must face a lawsuit by the U.S. Virgin Islands accusing it of missing red flags about Epstein's abuse of women on Little St. James, a private island he owned there.
The judge also ruled that both banks must face proposed class actions by women who said Epstein sexually abused them.
U.S. stocks rebounded in a broad advance as banking contagion fears ease with the exception of First Republic Bank which continues to hemorrhage as its future hangs in the balance. Material, energy and industrial shares led the S&P’s top sectors, while tech rose the least. In commodities, oil gained 1% to $67.54 per barrel and in currencies Bitcoin held just below the $28,000 level.
First Citizens Bancshares will submit bids to the Federal Deposit Insurance Corp (FDIC) to acquire parts of Silicon Valley Bank, one source with knowledge of the matter said on Monday.
The bank, which has around $109 billion in assets and total deposits of $89.4 billion, also delivered a bid on Sunday to the FDIC for the full SVB. Bloomberg reported earlier on Monday First Citizens' interest in SVB.
The French government has survived two no-confidence votes in the lower chamber of parliament, proposed by lawmakers who objected to its push to raise the retirement age from 62 to 64.
National Assembly lawmakers rejected both motions Monday — one from the far-right National Rally and the other, more threatening one from a small centrist group that gathered support across the left.
The first motion, by the centrists, garnered 278 votes, falling short of the 287 needed to pass. The far-right initiative won just 94 votes.
With the failure of both votes Monday, the pension bill is considered adopted.
Norwegian Cruise Line Holdings Ltd said on Monday CEO and company veteran Frank Del Rio has decided to retire and would be succeeded by insider Harry Sommer.
Frank Del Rio, who has been in the cruise industry for 30 years and took the helm at Norwegian Cruise Line in 2015, will step down from the role at the end of June, but would serve as a senior adviser to the company's board through 2025.
Sommer, 55, has served as CEO of Norwegian Cruise Line brand since 2020 and president (international) for some of the company's brands including Oceania Cruises and Regent Seven Seas Cruises.
The company said David Herrera, 51, who has served as chief consumer sales and marketing officer of Norwegian Cruise Line brand since 2021, will succeed Sommer as president of the brand, effective April 1.
JPMorgan Chase CEO, Jamie Dimon, is trying to raise more capital for First Republic Bank, The Wall Street Journal reported on Monday.
Trading of First Republic stock was paused after losing 37% of its value on Monday, but trading resumed in the early afternoon Eastern time, with the stock down about 31%.
Currently, First Republic is trying to convert $30 billion in deposits from 11 different banks last week into a capital raise, said the WSJ report, which cited people familiar with the situation.
The WSJ also reported the banks may make an investment in First Republic as part of a capital injection.
Oatly Group and McDonald‘s Austria, announced a new partnership to bring Oatly Barista Edition to all McDonald’s McCafé locations in Austria.
Starting this month, Oatly Barista becomes the first oat drink product ever to be made available to McCafé locations across Austria, where coffee specialties and seasonal beverage highlights are served daily.
The partnership is expected to further support Oatly’s mission to convert new consumers from dairy to plant-based alternatives.
According to Oatly, the Barista Edition is an allergen-friendly milk alternative that has the same creamy taste, frothy feel, and functionality as traditional dairy, and in general, is better for the climate compared to cow’s milk.
JPMorgan Chase & Co CEO Jamie Dimon is leading talks with the chiefs of other big banks about fresh efforts to stabilize First Republic Bank, the Wall Street Journal reported on Monday, citing people familiar with the matter.
Shares of First Republic fell 46% to $12.41 as investors fretted that the $30 billion deposited by several big U.S. banks into the lender would not be enough to ease its troubles.
The banks are considering an investment into First Republic, the WSJ report said, adding that the plan could involve converting some or all of the $30 billion of deposits into a capital infusion.
JPMorgan and First Republic declined to comment on the report. A spokesperson for First Republic pointed to an earlier statement where the bank said it was "well-positioned to manage short-term deposit activity".
On Sunday, ratings agency S&P Global downgraded First Republic deeper into junk status, citing persistent risks to the lender's liquidity.
Starbucks has a new chief executive officer. Laxman Narasimhan has assumed the role and will join the company’s board of directors.
Narasimhan was named incoming CEO on Sept. 1, 2022, succeeding company founder and now former CEO, Howard Schultz.
Over the past five months, he has embarked on a unique immersion experience, traveling to work with partners (employees) in over 30 stores, manufacturing plants and in support centers around the world, earning his barista certification along the way.
Since Schultz returned last year, Starbucks unveiled a company-wide reinvention strategy and continued to deliver on more than $1 billion in investments in retail partners and stores for prioritized areas such as increased pay and sick time accrual, new financial well-being benefits, modernized training and collaboration, store innovation and equipment and the celebration of coffee.
Schultz shared a letter to the company’s senior leadership team on the eve of the announcement – viewable here.
Satellite launch company Virgin Orbit Holdings Inc VORB.O has begun drawing up detailed contingency plans for its insolvency days after halting its operations and furloughing its workforce, Sky News reported on Sunday.
Richard Branson's Virgin Group is working with restructuring firms Alvarez & Marsal and Ducera about fallback plans if they cannot secure new funding, the report added.
Last week, Reuters reported that Virgin Orbit Chief Executive Dan Hart told staff in a meeting that the furlough was intended to buy the company time to finalize a new investment plan to help pull it out of its financial woes, while the duration of the furlough remained unclear.
Virgin Orbit did not respond to a Reuters request for comment.
The major U.S. benchmarks are up and down on Monday as volatile tech shares pull the Nasdaq lower.
The Dow Jones Industrial, S&P 500 and Nasdaq are mixing as shares of Apple, Nvidia, Microsoft and Amazon wobble.
In commodities, oil is off approximately 0.48% to $66.42 a barrel as gold moves up roughly 0.65% to $1,986.40 an ounce.
Meanwhile, the price of silver is up around 0.50% to $22.57 an ounce.
Amazon CEO Andy Jassy, in a note to employees Monday, said the company will be laying off more workers.
"As we’ve just concluded the second phase of our operating plan (“OP2”) this past week, I’m writing to share that we intend to eliminate about 9,000 more positions in the next few weeks—mostly in AWS, PXT, Advertising, and Twitch. This was a difficult decision, but one that we think is best for the company long term..."
This is on top of the 18,000 positions being eliminated, announced earlier this year.
Foot Locker Inc. on Monday reported fiscal fourth-quarter profit of $19 million.
On a per-share basis, the New York-based company said it had profit of 20 cents. Earnings, adjusted for asset impairment costs and non-recurring costs, were 97 cents per share.
The results topped Wall Street expectations . The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of 52 cents per share.
The shoe store posted revenue of $2.34 billion in the period, also exceeding Street forecasts. Seven analysts surveyed by Zacks expected $2.15 billion.
For the year, the company reported profit of $342 million, or $3.58 per share. Revenue was reported as $8.76 billion.
Foot Locker expects full-year earnings in the range of $3.35 to $3.65 per share.
Credit Suisse and UBS could benefit from more than 260 billion Swiss francs ($280 billion) in state and central bank support, a third of the country's gross domestic product, as part of their merger to buffer Switzerland against global financial turmoil, documents outlining the deal show.
Swiss authorities announced on Sunday that UBS had agreed to buy rival Swiss bank Credit Suisse in a shotgun merger aimed at avoiding more market-shaking turmoil in global banking.
UBS said it will pay $3.2 billion for the 167-year-old flagship while the government said UBS would also take on the first $5.4 billion in losses from unwinding derivatives and other risky assets.
The deal, however, involves a large amount of public support, with three tranches of liquidity and loans, as well as a pledge from the Swiss government to absorb up to 9 billion francs in potential losses from the takeover.
The total of 259 billion francs of support is equivalent to a third of Switzerland's entire economic output, which stood at 771 billion francs last year.
In a memo seen by Reuters that was sent to staff on Sunday after the deal announcement, Credit Suisse reassured staff that their bonuses would be paid in full.
Warren Buffett is reportedly advising the Biden Administration on the current banking crisis, leaning on his experience from 2008, Bloomberg reports.
Buffett famously provided critical liquidity to Bank of America and Goldman Sachs during the height of the crisis. His Berkshire Hathaway is the largest shareholder in BofA.
The Federal Deposit Insurance Corporation (FDIC) has extended the bidding process for Silicon Valley Bridge Bank, National Association, Santa Clara, California.
Due to substantial interest from multiple parties, the FDIC bidders need more time to explore additional options to maximize value and achieve an optimal outcome.
The FDIC will also allow parties to submit separate bids for Silicon Valley Bridge Bank, N.A., and its subsidiary Silicon Valley Private Bank.
Meanwhile, qualified, insured banks, and qualified, insured banks in alliance with nonbank partners, will be able to submit whole-bank bids or bids on the deposits or assets of the institutions. Bank and non-bank financial firms will be permitted to bid on the asset portfolios.
The FDIC is seeking bids on Silicon Valley Private Bank by 8:00 P.M. EDT on Wednesday, March 22, 2023, and on Silicon Valley Bridge Bank, N.A. by 8:00 P.M. EDT on Friday, March 24, 2023.
Standard & Poor’s has downgraded First Republic Bank’s credit rating, despite its recent $30 billion cash infusion from a group of large banks.
S&P Global Ratings lowered First Republic to 'B+' from 'BB+'. The cut moves the bank one notch deeper into “junk bond” territory. A BB rating is the highest non-investment grade ranking.
“The deposit infusion from 11 U.S. banks, the company's disclosure that borrowings from the Fed range from $20 billion to $109 billion and borrowings from the Federal Home Loan Bank (FHLB) increased by $10 billion, and the suspension of its common stock dividend collectively lead us to the view that the bank was likely under high liquidity stress with substantial deposit outflows over the past week,” S&P said.
As of Mar. 15, First Republic reported a cash position of $34 billion, not including the $30 billion it will receive in deposits from the 11 banks.
Bitcoin, the largest cryptocurrency by market value, topped $28,000 as investors handicap what could be a more dovish Federal Reserve decision expected later this week making this crypto one of the best performing asset classes of 2023.
Shares of New York Community Bank jumped Monday after agreeing to purchase a significant portion of defunct Signature Bank in a $3.25 billion deal, the Federal Deposit Insurance Corporation announced late Sunday. Several firms upgraded the stock as they see an immediate benefit to NYCB.
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