“We have to stop this now.” The First Republic support spreads economic contagion, says Ackman.

  gauge of equity volatility, rose twice up to 30 before falling back. 

Those moves illustrate the whipsaw action in stocks and bond yields as traders tried to gauge the severity of the unfolding banking crisis and how much it would compromise the ability of central banks to maintain their anti-inflation strategies.
Concerns that turmoil in the financial sector would have a bad impact on the global economy – and some over-long positioning – also caused oil prices to fall.
Still, the stock market rallied on Thursday and Friday’s tone is, at least on the surface, calm as investors appear to have been bailed out by authorities arranging support for Credit Suisse

CS,

and First Republic

FRC

in USA.
But hold on.

The Federal Reserve needs to expand its balance sheet again after it reported late Thursday that banks this week used their new Bank Term Funding Program to lend $11.9 billion. In addition, $153 billion was borrowed via the Fed’s discount window and $142.8 billion in bridging loans.
The market does not know who or how desperate these borrowers may be.

And others worry that the latest moves to help the banking sector are not just covering the cracks, but may be making things worse.

Hedge fund manager Bill Ackman is not happy that the systemically important banks (SIBs) have been convinced to recycle the deposits they received from First Republic Bank (FRB) back into the struggling lender.
“The result is that the FRB default risk is now spread to our largest banks. Spreading the risk of financial contagion to achieve a false sense of confidence in the FRB is bad policy. The SIBs would never have made this low return investment in deposits unless they were pressured to do so and without assurances that FRB deposits would be stopped if it failed.” Ackman wrote in a tweet late Thursday.
“The press release announcing $30B in deposits raised more questions than it answers. A lack of transparency makes market participants assume the worst. I’ve said before that hours matter. We’ve let days go by. Half measures don’t work when is a crisis of confidence.,” he added.
Ackman, who runs Pershing Square Capital Management and is not averse to an apocalyptic outbreak, said the banking sector needed a temporary deposit guarantee immediately until an expanded public insurance scheme is widely available.
“We have to stop this now. We are past the point where the private sector can solve the problem and are in the hands of our government and regulators. Tick tock.”

Markets

S&P 500 futures

ES00

rose 0.1% as 10-year Treasury yields

BX:TMUBMUSD10Y

fell 4.2 basis points to 3.542%. The dollar index

DXY

lost 0.3%, helping lift gold

GC00

up 0.7% to $1,936 per ounces.
Try your hand at Barron’s crossword and sudoku games, now running daily along with a weekly digital puzzle based on the week’s cover story. To see all puzzles, click here.

The sum

US economic data available today includes industrial production and capacity utilization in February, released at 9.15, followed by February’s leading economic indicator index and consumer sentiment report for March at 10:00 a.m. All times eastern.
It’s another quadruple Witching Friday, with $2.8 trillion worth of options contracts expiring.
Anyone who buys First Republic shares

FRC

at the open Thursday and selling at the close could have made about 60% for the day. The recovery came after a consortium of major banks pledged $30 billion in deposits to the lender. However, shares are down 5% heading into the opening bell on Friday after First Republic said it would have to suspend its dividend to save money.
FedEx shares

FDX

is up 11% in premarket action after the packager delivered results that showed cost savings and the ability to raise prices helped the bottom line.
Shares in Sarepta Therapeutics

SRPT

falling 20% ​​after the FDA said it would hold an advisory panel on the company’s Duchenne muscular dystrophy treatment.

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The diagram

Here is CNN’s Fear & Greed index. It is a compilation of seven indicators: market momentum, stock price strength, stock price breadth, put and call options, junk bond demand, market volatility and safe harbor demand.
Eagle-eyed readers may note that this week it dropped to ‘Extreme Fear’ – below the 25 line – before popping back up to just ‘Fear’. The last time the chart dipped this low, in October 2022, it marked a recent low for the S&P 500.

Top tickers

Here were the most active stock exchange tickers on MarketWatch from 6 a.m. Eastern.

Ticker	Security name
TSLA	Tesla
FRC	First Republic Bank
BBBY	Bed Bath & Beyond
GME	GameStop
AMC	AMC Entertainment
HUBC	Cyber ​​Security Hub
NVDA	Nvidia
CS	Credit Suisse ADR
AAPL	Apple
TRKA	Troika media

Random readings

Rolls-Royce and the nuclear powered moon base.
Spanish princess must wear camouflage for three years.
Rival Colorado towns fight over a frozen dead guy.
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