To The Moon

U.S. stock index futures struggled for direction on Monday as investors weighed a state-backed takeover of Credit Suisse aimed at averting a banking crisis and odds of the Federal Reserve keeping interest rates unchanged at its next meeting.

Market Snapshot

At 7:51 a.m. ET, Dow e-minis were down 31 points, or 0.10%, S&P 500 e-minis were down 4.25 points, or 0.11%, and Nasdaq 100 e-minis were down 11.25 points, or 0.09%.

Pre-Market Movers

Credit Suisse (CS), UBS (UBS) - American depositary receipts of Swiss bank Credit Suisse plunged 58% after larger rival UBS agreed to buy Credit Suisse in a deal valued at about $3.2 billion. The merger of Switzerland’s two largest banks—engineered over the weekend by Swiss authorities—comes against a backdrop of industry turmoil. U.S.-listed shares of UBS were down 3%.

First Republic Bank (FRC) - First Republic Bank was falling 20% in premarket trading. The regional lender was downgraded deeper into junk territory by S&P Global. Last Wednesday, S&P Global cut the bank’s credit rating into speculative-grade territory. The stock has been tumbling as the collapse of Silicon Valley Bank and two other U.S banks has triggered concerns about the health of the U.S. banking system.  JPMorgan Chase (JPM) and other big banksstepped in last week to shore up First Republic Bank to the tune of $30 billion.

PacWest (PACW) - PacWest Corp is in talks about a liquidity boost with Atlas SP Partners and other investment firms, people familiar with the matter said, in the latest case of a U.S. regional bank exploring such an option in the wake of Silicon Valley Bank's failure. PacWest shares jumped 18% in premarket trading.

New York Community Bancorp (NYCB) - Flagstar Bank, a subsidiary of New York Community Bancorp, agreed on Sunday to acquire much of what was once Signature Bank. Starting Monday, Signature Bank’s 40 branches will operate under Flagstar Bank. Signature Bank collapsed just over a week ago, days after Silicon Valley Bank faced the same fate. Shares of New York Community Bancorp also were upgraded to Outperform from Market Perform at Keefe Bruyette. Shares were rising 37%.

Pinduoduo (PDD) - Pinduoduo reported quarterly earnings of $1.21 per share which met the analyst consensus estimate. This is a 31.52 percent increase over earnings of $0.92 per share from the same period last year. The company reported quarterly sales of $5.77 billion which missed the analyst consensus estimate of $5.95 billion by 2.97 percent. This is a 35.10 percent increase over sales of $4.27 billion the same period last year. The shares tanked 15% in premarket trading.

Crypto Stocks (Bit Digital, Riot Blockchain, Marathon Digital, Microstrategy, Coinbase) - Crypto stocks jumped as bitcoin near 9-month high. Bit Digital rose 10%; Riot Blockchain, Marathon Digital and Microstrategy rose 5%; Coinbase rose 4%.

Market News

UBS Buys Credit Suisse for $3.2 Billion

UBS agreed to buy its embattled rival Credit Suisse for 3 billion Swiss francs ($3.2 billion) Sunday. The terms of the deal will see Credit Suisse shareholders receive 1 UBS share for every 22.48 Credit Suisse shares they hold. The Swiss National Bank also pledged a loan of up to 100 billion Swiss francs ($108 billion) to support the takeover.

Microsoft Plans Mobile Games Store to Rival Apple and Google

Microsoft is preparing to launch a new app store for games on iPhones and Android smartphones as soon as next year if its $75bn acquisition of Activision Blizzard is cleared by regulators, according to the head of its Xbox business.

New rules requiring Apple and Google to open up their mobile platforms to app stores owned and operated by other companies are expected to come into force from March 2024 under the EU’s Digital Markets Act.