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IPFS News Link • Stock Market

Futures Surge Above 4,000 As Bank Crisis Fades Amid Growing Deposit Insurance Speculation

•, by Tyler Durden

S&P futures spiked above 4,000 on Tuesday as fears about turmoil in the global banking sector subsided, following a Bloomberg report that the Biden admin was considering insuring all deposits (unclear exactly how they will credibly insure all $18 trillion in deposits, some 75% of US GDP but whatever) followed by an FT article this morning previewing Janet Yellen's speech at the American Bankers Association on Tuesday in which the Treasury Secretary will signal further US government backing for deposits at smaller American banks if needed, "a shift that seeks to protect parts of the country's banking system struggling in the recent financial turmoil."

Contracts on the S&P 500 were up 0.8% by 7:45 a.m. ET paced by European shares with Estoxx50 +1.8% on the day as  risk appetite has been stoked by report that US officials are studying ways to temporarily guarantee all bank deposits; Nasdaq 100 futures gained 0.7%. Both underlying indexes had risen on Monday. European and Asian markets were solidly in the green. As a result of the jump in risk sentiment, traders are also firming up bets on the Fed raising rates another 25bp on Wednesday with ~20bps currently priced in — versus less than 10bp at one stage on Monday.%. The Bloomberg Dollar Spot Index was down for the second day as treasury yields edged higher, mirroring moves in the UK and Europe. Gold fell and oil rose, while Bitcoin retreated for the first time in nearly a week.

Among notable movers in US premarket trading, First Republic Bank advanced more than 20%, rebounding from a slump to a record low as investors weighed a proposal from JPMorgan to help the struggling mid-size lender. Meta Platforms Inc. rose after Morgan Stanley raised its recommendation to overweight from equal-weight.