—— NYCB Secures $1 Billion in Equity Support; U.S. Corporates May Buy Back $1 Trillion in Shares; Biden Proposes Higher Taxes on Corporates and Billionaires; Banks Face Billions for FDIC; 30-Year Mortgage Rate Drops for First Time in 5 Weeks; Consumer Confidence Rebounds, Kroger Earnings Strong; Rivian Scraps Plant Plan, Shares Soar
1. NYCB Secures $1 Billion in Equity Support
Today, New York Community Bank (NYCB) announced it has secured $1 billion in equity led by Steven Mnuchin’s Liberty Strategic Capital, Hudson Bay Capital, and Reverence Capital Partners.
Mnuchin said they carefully assessed credit risks when investing in NYCB, and the $1 billion injection will provide sufficient reserves.
Liberty will contribute $450 million, Reverence $200 million, and Hudson Bay along with other investors a combined $250 million.
The equity infusion is expected to close on March 11, with Jefferies appointed as the exclusive financial advisor.
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2. U.S. Corporates May Buy Back $1 Trillion in Shares
Goldman Sachs strategists Cormac Conners and David Kostin wrote that U.S. companies may repurchase over $1 trillion in shares for the first time in 2025.
In 2024, Goldman estimates S&P 500 companies will increase buybacks by 13% to $925 billion, with another 16% rise in 2025 to surpass $1 trillion.
Boosted by strong earnings from major tech firms, Goldman also raised its EPS forecasts for the S&P 500 for 2024 and 2025.
Rate cuts by the Fed, a better political environment, and resolution of the U.S. election may all help lift the stock market.
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3. Biden Proposes Higher Taxes on Corporates and Billionaires
Today, U.S. President Joe Biden unveiled a sweeping tax plan targeting billionaires and corporations, aiming to reduce America’s record-high national debt and gain support ahead of the November election.
Biden proposes raising the minimum corporate tax rate from 15% to 21% and increasing the minimum tax on billionaires to 25%.
The new plan is projected to reduce the national debt by $3 trillion over the next decade. As of the end of 2023, U.S. national debt stood at $26.2 trillion.
These proposals are unlikely to pass Congress, but Biden hopes to use them to signal his position.
An FT-Michigan Ross poll shows 60% of Americans disapprove of Biden’s handling of the economy.
Source：Financial Times – Joe Biden to propose big tax rises for billionaires and corporate America
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4. Banks Face Billions for FDIC
According to the FDIC’s annual report released at the end of February, the failures of Silicon Valley Bank and Signature Bank resulted in a total loss of $20.4 billion—25% higher than the $16.3 billion projected in November.
Major banks like JPMorgan and regional banks like PNC Financial Services Group will have to pay more to replenish the Deposit Insurance Fund (DIF), which covers depositor funds when banks collapse.
PNC said Tuesday it paid $515 million in Q4 and expects an additional $130 million in costs this quarter.
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5. 30-Year Mortgage Rate Drops for First Time in 5 Weeks
According to a statement from Freddie Mac today, the 30-year fixed mortgage rate fell to 6.88% last week—the first drop in five weeks.
Freddie Mac chief economist Sam Khater noted that mortgage rates remain the biggest barrier to homebuyers entering the market.
Realtor.com data shows homes priced between $200,000 and $350,000 rose 20.6% year-over-year in February, indicating some easing in inventory constraints.
Since May 2023, mortgage rates have hovered above 6.5%, limiting purchasing power for many buyers.
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6. Consumer Confidence Rebounds, Kroger Earnings Strong
During a call with analysts, grocery giant Kroger’s CEO said the company expects a clear improvement in consumer sentiment in 2024, though macroeconomic challenges remain.
Kroger forecasts FY2024 EPS between $4.30 and $4.50, above analyst expectations. Same-store sales are expected to grow between 0.25% and 1.75%.
In Q4 last year, Kroger also beat expectations as consumers prioritized groceries and essentials. The company reported increases in product sales and in-store foot traffic.
Following the earnings release, Kroger shares rose as much as 8.8%.
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7. Rivian Scraps Plant Plan, Shares Soar
Electric truck maker Rivian announced in a filing today that it is halting plans to build a multi-billion-dollar plant in Georgia and will instead release a cheaper EV.
Rivian said the decision would save $2.25 billion annually. The upcoming R2 model will now be produced at the company’s existing plant in Illinois and is expected to begin delivery in the first half of 2026.
Following the announcement, Rivian shares surged up to 16%, marking the largest jump since last July. However, year-to-date, the stock has fallen more than 50%.
Two weeks ago, Rivian announced layoffs and said it would not raise production targets for this year, triggering a selloff.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.