UBS shakeup, chipmaking cheer, SBF bribery charge - what's moving markets

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UBS shakeup, chipmaking cheer, SBF bribery charge - what's moving markets
Credit: © Reuters.

By Geoffrey Smith -- UBS sends for its own private Superman, two big chipmakers see an improvement in their fortunes (as does Lululemon) and stocks are back where they were before the U.S.'s regional banks began to wobble. Here's what's moving financial markets on Wednesday, March 30th.

1. Ermotti returns to UBS

UBS (SIX: UBSG ) brought back its Sergio Ermotti as chief executive, a sign of the difficulties it faces in implementing the takeover of Credit Suisse (SIX: CSGN ).

UBS’ $3.25 billion acquisition of its failing rival faces legal and political challenges in Switzerland, after the government hastily rewrote its own legislation to allow the deal to proceed without the approval of Credit Suisse’s shareholders. That has triggered a crisis of confidence in the stability of Switzerland as a jurisdiction, prompting massive withdrawals of savings by wealthy Asian customers in particular.

Ermotti’s return also signals the departure of Ralph Hamers, who was the star CEO of European banking when UBS plucked him from ING. The switch indicates that Ermotti’s unparalleled knowledge of the Swiss establishment is going to be more important for UBS over the next couple of years than Hamers’ plans, which had gained little traction since his arrival.

2. Chipmakers buoyed by Micron update

Semiconductor stocks got a boost from updates on either side of the Atlantic, which saw two big players raise their guidance.

Germany’s largest chipmaker Infineon (ETR: IFXGn ) raised its forecasts for the quarter and the year, citing “resilient business dynamics” from its key customers in the automotive sector.

Micron Technology (NASDAQ: MU ), a specialist in memory chips, also raised its guidance for the current quarter, as CEO Sanjay Mehrotra forecast “gradual improvements to the industry’s supply-demand balance,” as the inventory glut of recent months is worked off. Micron still took another $500 million hit in inventory writedowns and increased its planned job cuts.

3. Stocks recover to pre-SVB collapse levels; mortgage data, pending home sales due

U.S. stock markets are poised to open higher later, with updates from Micron and Lululemon (NASDAQ: LULU ) both supporting sentiment. The athleisure company reported better-than-expected earnings late on Tuesday and its guidance was also stronger than the market consensus.

By 05:30 ET (09:30 GMT), Dow Jones futures were up 240 points, or 0.7%, while S&P 500 futures were up 0.9% and Nasdaq 100 futures were up 1.0%, all three having recouped all – or nearly all – of their losses due to the spate of banking collapses earlier in the month.

Regional bank stocks continue to recover on confidence that the short-term crisis has passed.

Stocks likely to be in focus later include Lululemon, which was up 15.1% in premarket, and Apple (NASDAQ: AAPL ), which unveiled plans to introduce a Buy Now Pay Later service.

Cintas (NASDAQ: CTAS ) and Paychex (NASDAQ: PAYX ) are due to report earnings early, while the data calendar is light, with only pending home sales data and weekly mortgage statistics due.

4. SBF's charge sheet gets longer

The case against FTX's Sam Bankman-Fried gets bigger.

U.S. attorneys charged the founder of the collapsed crypto exchange with attempting to bribe Chinese officials to let him regain access to accounts with over $1 billion worth of cryptocurrency in them. The deposits were allegedly unfrozen in or around November 2021, allowing Bankman-Fried to carry on funding the trading activities of his hedge fund, Alameda Research.

The indictment is the 13th handed down to Bankman-Fried, who is scheduled to face trial in October.

This adds to the negative news flow around some of the kingpins of the crypto industry in recent days, following the CFTC's charges against Binance and its founder Changpeng Zhao. Crypto itself is shrugging off the newsflow, with Bitcoin rebounding back above $28,000 overnight.

5. Oil hits two-week high as economic pessimism fades, stockpiles fall

Crude oil prices hit their highest in two weeks overnight, as some of the pessimism over the economic outlook triggered by recent banking volatility continued to dissipate. Sentiment was underpinned by the biggest weekly drop of the year so far in U.S. crude stockpiles, which the American Petroleum Institute said had fallen by more than 6 million barrels last week.

The U.S. government's data are due at 10:30 ET, as usual.

By 06:07 ET (10:07 GMT), U.S. crude futures were up 1.1% at $74.04 a barrel, while Brent was up 0.8% at $78.75 a barrel.

The picture still isn't entirely bullish, however. S&P Global reported that refined product stockpiles at Fujairah, one of the most important transport hubs in the Persian Gulf, had risen to their highest in five weeks as exports slowed.

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