US Stock Futures and Bank Stocks Ascend as First Citizens Bank Acquires Silicon Valley Bank Assets
US Stock Futures Ascend as Bank Stocks Get a Boost from First Citizens' Acquisition of Silicon Valley Bank Assets
U.S. stock futures experienced an upward movement before the opening bell on Monday, primarily driven by the banking sector's positive momentum. This followed the announcement that North Carolina-based First Citizens (FCNCA) would acquire a significant portion of Silicon Valley Bank's assets. Both the S&P 500 Index futures and DJIA futures increased by 0.6%, while Nasdaq Index futures grew by 0.3%.
In addition, gold futures markets saw a rise in open interest for the second consecutive session on Friday, increasing by nearly 16,000 contracts according to preliminary readings from CME Group. The volume followed suit, increasing by around 67,400 contracts, which added to the previous daily build. Despite recent gains, gold prices could potentially slip back to $1,930 per ounce in the near term.
As for the bond market, the yield on the benchmark 10-year U.S. Treasury note rose to 3.4% on Monday morning. Meanwhile, WTI crude oil prices climbed to nearly $70 a barrel.
Last week, the Federal Reserve raised interest rates by 0.25%, putting pressure on the U.S. and European banking sectors. Major stock market indexes, however, ultimately experienced gains, with the Dow Jones average increasing by 1.2%, the S&P 500 rising by 1.4%, and the Nasdaq Composite closing up 1.7%.
This week, the banking sector will continue to be in the spotlight as the Senate Banking Committee holds a hearing on bank failures on Tuesday. Key witnesses scheduled to testify include FDIC Chairman Martin Gruenberg, Federal Reserve Vice Chairman Michael Barr, and Treasury Undersecretary Nellie Liang.
Bank stocks such as First Republic Bank (FRC), PacWest Bancorp (PACW), Western Alliance Bancorporation (WAL), Zions Bancorporation (ZION), and Regions Financial (RF) experienced positive momentum on Monday morning. Major banks like Bank of America (BAC), JPMorgan Chase (JPM), Wells Fargo (WFC), and Citigroup (C) also saw gains.
On the economic calendar, the Conference Board's consumer confidence measure will be released on Wednesday, followed by the Fed's preferred inflation gauge, the PCE, on Friday. February's personal income is expected to come in at 0.3%, slightly lower than January's 0.6%. Personal spending is anticipated to reach 0.3%, down from January's 1.8% reading.
Earnings results from companies like Micron Technology (MU), Lululemon (LULU), RH (RH), and Cal-Maine Foods (CALM) are expected to be released this week.