Gary franchi here with a Next News Economic report JP Morgan Chase's Takeover of First Republic Bank could be A turning point in the ongoing banking Crisis but the financial Fallout is far From Over the largest U.S Bank by assets Reached a deal to take over the 14th Largest financial institution averting a Broad collapse in the sector however the Crisis is not over yet former Chief Operating Officer at Goldman Sachs Gary Cohn warns of other issues in the Banking world that could arise with Financial services covering a wide swath Of activities in the 26.5 trillion Dollars U.S economy the failures of Silicon Valley Bank signature bank and Now First Republic Bank will undoubtedly Reverberate the Takeover kicks off an Important week on Wall Street with a key Decision on interest rates looming along With earnings from apple and a jobs Report that is expected to show a Further deceleration in hiring despite Stocks nudging higher on hopes that the Worst of the banking crisis has passed Experts warn that The Chronic phase is Only in its early stage tighter credit Conditions are ahead which could weigh On consumer spending making up 68 Percent of all economic activity the Federal Reserve meeting is one of the First places markets can turn to gauge The larger impact
Traders are now intensifying their bets That the central bank will enact another Quarter percentage Point interest rate Hike as the first Republic resolution Provides some clarity to the question of Regional Bank health however the broader Impact of the fed's rate hiking cycle Will continue to be felt If the Fed Follows through on the increase it will Mark five percentage points worth of Hikes in a 14-month period the fastest Tightening cycle since the early 1980s Larry McDonald founder of the bear traps Report warns that anything the FED does On the hawkish side will cause much more Financial instability an indication on Wednesday of more hikes is not something Investors want to see particularly in The midst of a jumbled earnings season And ahead of a looming jobs report S P 500 profits are tracking at a loss of 3.7 percent for the first quarter even With 79 percent of companies beating Wall Street estimates according to Factset Apple earnings are on tap this Week with the Silicon Valley Bellwether On Thursday expected to post profit of 1.4’ cents a share down from 1.88 cents The previous quarter Quincy Crosby Chief Global strategist at LPL Financial States that apple is crucial as it gives Perspective on global Demand on the Following day the labor Department's Non-farm payroll report for April is
Projected to show job growth of 180 000 Down from two hundred thirty six Thousand in March and what would be the Smallest monthly gain since December 2020. policymakers however could be more Keyed on wage numbers and the impact on Inflation so a soft payrolls Report with Softening wages might be greeted Positively by a market looking for a Less aggressive fed Nevertheless stresses are still present In the banking system which puts Pressure on the FED to hold the line on Monetary policy despite inflation that Policy makers see is still too high Gross domestic product increased just 1.1 percent annualized in the first Quarter well below expectations and Another signal that a Slowdown or Outright recession is ahead Markets expect the central bank will be Forced to cut by at least half a Percentage point before the end of the Year to combat the possible contraction According to the CME group's fed watch Tracker of Futures pricing Krishna guha Head of global policy and Central Bank Strategy for evercore isi says the Seizure and subsidized on sale of First Republic completes the obvious Unfinished business from the initial Acute phase of the bank stress but we Think this is only the very early stages Of The Chronic phase for every First
Republic or Silicon Valley Bank there Will be hundreds of smaller and Mid-sized U.S banks that will act more Conservatively in the months ahead in Order to minimize any risk that they end Up in the same situation In conclusion JP Morgan's takeover of First Republic Bank May have ended the Panic phase of the banking crisis but Experts warn that the financial Fallout Is far from over tighter credit Conditions and the looming possibility Of a recession could weigh on the Economy despite the central bank's Efforts to combat inflation that's your Top economic news right now follow next News for more daily breaking economic News