I’m back from doing the civic duty/jury duty thing, but markets don’t seem to be back to their winning ways. Equities are lower in the early going along with crude oil. Treasuries are mostly flat along with the dollar, while gold and silver are mixed.
On the news front...
The First Republic Bank (FRC) saga came to an end when the FDIC helped organize a weekend takeover of the bank by behemoth JPMorgan Chase (JPM). JPM is assuming $173 billion of loans, $30 billion of securities, and $92 billion in deposits, while the FDIC and JPM will share losses and potential recoveries on select loans.
The question is, won’t this just make the “Too Big to Fail” problem worse? After all, JPM already holds more than 10% of U.S. deposits and...theoretically...shouldn’t be able to buy any more banks. But the rule is waived in times of crisis when a failing bank is involved.
In layoff news, Morgan Stanley (MS) is cutting another 3,000 jobs by the end of this quarter amid a slump in Wall Street dealmaking. Walt Disney (DIS) is also now carrying out the 7,000 layoffs it previously promised. Several high-level executives in the entertainment conglomerate’s streaming division, Disney+, are reportedly among those getting the axe. The company wants to save $5.5 billion through those and other cuts. Troubled retailer Gap (GPS) is also in the midst of 1,800 layoffs.
Finally, Super Mario Bros. became the first movie to top $1 billion in box office sales this year. The animated movie appeals to the nostalgia all of us of a certain generation have for the title character Mario, his brother Luigi, Princess Peach, and a host of other characters.
