US pre-open: Futures slightly lower as banks remain in focus
By Iain Gilbert
Date: Monday 20 Mar 2023
(Sharecast News) - Wall Street futures had stocks opening slightly lower ahead of the bell on Monday as fears surrounding the current state of the global banking system remained firmly in focus.
As of 1220 GMT, Dow Jones futures were down 0.07%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.10% and 0.14% softer, respectively.
The Dow closed 384.57 points lower on Friday as the banking sector weighed on major indices.
Banks continued to drive market sentiment into the ground prior to the open on Monday after the Swiss government engineered a forced CHF 3.0bn (£2.64bn) takeover of Credit Suisse by UBS, another attempt by policymakers to stop a crisis threatening the banking sector.
Regional banks were still drawing an amount of investor attention amid calls to shore up their deposit bases following the shuttering of Silicon Valley Bank earlier in March, with analysts expecting that more actions will likely be needed if the Federal Reserve can restore confidence in the banking system after it backstopped SVB's uninsured deposits and offered new funding for troubled banks.
First Republic shares traded sharply lower in premarket after shedding a whopping 72% in the previous week, with further losses coming even as a consortium of banks vowed to deposit $30.0bn with the struggling San Francisco lender or at least 120 days.
Zaye Capital's Naeem Aslam said: "US and European futures are swinging between gains and losses today as the Swiss government arranged a forced takeover of Credit Suisse by UBS. The lawmakers are trying their best at this stage to put off fires which is in their backyards, and the purpose is to quell any potential crisis that is threatening their banking sector.
"After two weeks of tumult in the financial markets, Wednesday's interest rate decision by the Federal Reserve is more consequential than ever. It is widely anticipated that a quarter-point hike by the Fed is expected to take in the Fed's meeting. Some speculators believe that Jerome Powell may even begin to ease his aggressive tightening campaign that began in March 2022 as such measure is needed to ease off concerns surrounding financial contagion risk."
In terms of earnings, Foot Locker posted fourth-quarter earnings of $0.97 per share, beating estimates by $0.46, on revenues of $8.76bn, which were at the top end of consensus.
No major data points were scheduled for release on Monday.
Reporting by Iain Gilbert at Sharecast.com
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