—— Fed May Cut Rates in March to Rescue Banks; Pfizer Acquires Cancer Drugmaker; Morgan Stanley Urges Profit-Taking on Rallies; China Produces 77% of Global Cobalt; HSBC Buys SVB’s UK Unit; Schwab Loses $2.9B in Wealth; NYC Mayor Backs Office-to-Residential Projects
1. Fed May Cut Rates in March to Rescue Banks
On Sunday, the U.S. government stepped in to take over Signature Bank, prompting investors to shift capital toward safer assets like Treasuries.
An increasing number of analysts now expect the Federal Reserve to pause rate hikes this month. Analysts at Nomura even predict a 25-basis-point cut at the March 22 meeting to ease financial sector turmoil.
Today, the S&P 500 Bank Index—which includes 18 major banks—fell 7%, its worst drop since June 2020. The S&P 500 Regional Bank Index, made up of 13 smaller banks, fell 14.9%.
At this point, the health of the banking sector may matter more to the Fed than the direction of CPI.
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2. Pfizer Acquires Cancer Drugmaker
Today, pharma giant Pfizer announced it will acquire Seagen Inc. for $229 per share—about one-third above its Friday closing price.
Seagen is a leader in antibody-drug conjugates (ADCs), a targeted cancer therapy that improves efficacy while reducing side effects.
Post-COVID, Pfizer’s vaccine revenue has dropped sharply, prompting the search for new growth. CEO Albert Bourla noted that while this deal is smaller than previous acquisitions, it positions Pfizer to expand in the fast-growing oncology space.
Pfizer plans to issue $31 billion in long-term acquisition debt, with the remainder funded by short-term financing and cash.
Seagen is expected to contribute $10 billion in annual revenue by 2030.
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3. Morgan Stanley Urges Profit-Taking on Rallies
Following the SVB collapse, Morgan Stanley strategist Michael Wilson advised investors to sell into any market rally triggered by government intervention, and to wait for new lows before buying.
Wilson, who accurately predicted last year’s major selloff and the October rebound, said SVB and Signature Bank’s failures highlight the risks of the Fed’s tightening cycle. While a 2008-style systemic crisis is unlikely, bank failures could still hamper economic growth.
Pre-market today, First Republic Bank shares plunged 70%, and PacWest Bancorp dropped over 40%.
Wilson expects more depositors will shift funds to higher-yielding securities unless banks are forced to raise deposit rates—cutting into bank profitability.
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4. China Produces 77% of Global Cobalt
According to Darton Commodities, China’s share of global cobalt production is expected to rise from 44% to at least 50% in the next two years.
Despite Western efforts to secure supplies of critical metals like cobalt, lithium, and nickel, China continues expanding its dominance.
In 2022, China produced 140,000 tons of cobalt—more than double its output five years ago. That accounts for 77% of global production, with the rest of the world producing just 40,000 tons.
Cobalt prices have fallen 60% from last May’s high of $40/lb to $16/lb, due to easing supply chains and weaker EV demand.
Global output rose 23% last year—twice the growth in demand.
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5. HSBC Buys SVB’s UK Unit
Today, HSBC CEO Noel Quinn and UK Chief Ian Stuart announced the bank will inject £2 billion into Silicon Valley Bank UK to ensure normal operations.
An HSBC UK subsidiary acquired SVB UK for £1. Quinn said the strategic purchase strengthens HSBC’s presence in tech and life sciences.
HSBC did not confirm whether SVB UK would continue to operate independently.
As of March 10, SVB UK held £6.7 billion in deposits and about $5.5 billion in loans.
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6. Schwab Loses $2.9B in Wealth
SVB’s collapse wiped out $2.9 billion in wealth from 85-year-old billionaire Charles Schwab over just a few days—more than any other individual on the Bloomberg Billionaires Index. He now ranks 183rd, with a net worth of $10 billion.
Since last Wednesday, shares of Schwab’s firm, Charles Schwab Corp., have fallen 32%, heavily affected by SVB’s contagion. The good news: most of Schwab’s deposits are insured.
Schwab, who founded the company in 1971, holds a 6% stake, which accounts for most of his fortune.
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7. NYC Mayor Backs Office-to-Residential Conversion
Developer Vanbarton Group recently secured $273 million in construction loans to convert a Manhattan office building on Water Street into residential units. The project received public support from Mayor Eric Adams, who hopes to lower legal barriers for office-to-residential conversions.
Set to be completed in two years, the project will offer 588 market-rate units, with studio apartments renting at $3,000/month. While it doesn’t qualify for 421a tax incentives or include affordable housing, Adams believes it still helps alleviate NYC’s housing shortage.
Adams said there are currently no effective incentives for developers to build affordable housing until new 421a policies are introduced.
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本文内容来自《Financial Times》、《Bloomberg》，以及《The Real Deal》等多家财经新闻媒体。