🍗 US Bank Lending Drops Over $105 Billion, Largest Decline Since 1973
Morning Tendies
April 11, 2023
Bank lending suffers largest decline in 50 Years, Apple's Mac shipments Fall 40%, Tesla price cuts, Charles Schwab brings in $53 Billion of Core Net New Client Assets, and is Pioneer Natural Resources being bought-out by Exxon Mobil?
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Market Overview 📈
U.S. Bank Lending Drops By Most on Record 🏦
What Else is Happening 🔮
Tendie Time 🍗
Market Overview 📈
Market Movers:
U.S. Bank Lending Drops By Most on Record 🏦
Loans by commercial banks declined by nearly $105 billion in the two weeks ended March 29th.
Deposits at U.S. banks decreased for a 10th-straight week
Why does this matter?
The business model of banks is centered around the cash outflows (loans) being backed by cash inflows (deposits).
No Deposits = No Loans = No Revenue
However, the decrease in deposits isn’t the only reason for the largest decline in commercial bank lending since 1973. Banks don’t pull back on lending unless there are major fears that people won’t be able to pay the loans back.
On Thursday, the American Bankers Association Credit Condition Index fell to the lowest level since the onset of the pandemic. This signifies bank economists see credit conditions weakening and banks are more likely to become more cautious about extending credit.
Pay Attention to the rest of the week in the market. It will be interesting to see how some of the largest banks report earnings this week.
What Else is Happening? 🔮
🚘 Tesla falls after the firm announces its fifth price cut since the start of the year. Tesla cut the prices of its two most expensive cars: The Model S and Model X, both are now $5,000 cheaper. Not to mention, the Model Y is also $2,000 cheaper.
This comes after the U.S. Treasury Department and IRS issued new guidance last month on what EV models qualify for tax credits. The new rules go into effect this month.
🛢 Shares of Pioneer Natural Resources jump after the WSJ reported that there is a potential buyout with Exxon Mobil. Keep in mind, This is all rumors and discussion is said to be “informal”.
💰 Charles Schwab brought in $53 billion of core net new client assets in March. Along with this, Schwab says deposit flows “have remained fairly consistent” throughout the banking uncertainty in the overall economy.
🖥 Apple’s Mac shipments fall more than 40% in the first quarter. This plunge in PC shipments is the steepest among major computer makers. Shipments by all PC makers combined dropped 29%.
📱 Micron stock rises after Samsung chip production cuts. Micron Technology finished the trading session gaining +8.04%.
Tendie Time 🍗
The Best Roundup of Random Stuff from Around the Web:
📉 Short Mania: March was a huge month for shorting bank stocks. Hedge funds made a total of $7.25 billion dollars shorting bank stocks. This makes March the most profitable month for short sellers in the banking sector since the 2008 financial crisis.
🗽 Let’s Hear it for New Yooorkkk: New York tops the list of cities where ultra-wealthy individuals own properties:
Quote of the Day:
“To get what you want, you have to deserve what you want. The world is not yet a crazy enough place to reward a whole bunch of undeserving people”
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