Game over for Silvergate, labor data, JPMorgan sues Staley – what’s moving markets


By Geoffrey Smith — Crypto shudders as Silvergate shutters. Initial jobless claims and the Challenger job cuts survey flesh out the picture of the labor market. U.S. President Joe Biden will outline his administration’s budget plans, including a raft of measures that would put downward pressure on stock prices. JPMorgan pins the blame on Jes Staley for being tarred by the Jeffrey Epstein affair, and Europe’s natural gas prices fall to their lowest in over 18 months as the Freeport LNG plant gets the go-ahead to resume exports. Here’s what you need to know in financial markets on Thursday, 9th March.

1. Crypto falls as Silvergate announces liquidation

Cryptocurrencies fell, along with stocks exposed to the asset class, after Silvergate Capital (NYSE:SI) said it will wind down operations and return cash to depositors.

Silvergate has been a key provider of banking services to crypto exchanges in the U.S. and it is far from clear how they will find anyone else to facilitate the transfer of money between the crypto and fiat currency universes.

Bitcoin fell to its lowest in a month before recovering slightly to trade at $21,632 by 06:30 ET (11:30 GMT), while Ether, Cardano, and Solana all fell too. Other indicators suggested that crypto investors continued to pull their money out of the space, with the value of Binance USD‘s outstanding circulation falling to barely $8 billion – a drop of 50% in the last month – despite Binance saying that it has no exposure to Silvergate.

2. All not quite quiet on the labor market front

The U.S. labor market remains front and center on Thursday after two reports on Wednesday that showed only patchy evidence of a cooling off.

Initial claims for jobless benefits are expected to bump along below 200,000 again, while the Challenger Job Cuts survey is due an hour before that at 07:30 ET.

On Wednesday, ADP’s monthly survey of private hiring had come in well above expectations at 242,000 in February, while its wage tracker continued to show pay growth well above official estimates. The Labor Department, meanwhile, reported that job openings fell in January – but only from an upwardly revised 11.23 million, which was a nine-month high.

3. Stocks drift in post-Powell daze; JPMorgan tries to claw back $80M from Epstein associate Staley

U.S. stock markets are set for a mixed opening, struggling to develop any momentum after Federal Reserve chair Jerome Powell’s warnings of more rate hikes to come in two days of testimony on Capitol Hill.

By 06:30 ET, Dow Jones futures were essentially flat, while S&P 500 futures were down 0.2% and Nasdaq 100 futures were down 0.5%. That’s a mirror image of the big three cash indices’ performance on Wednesday when the Nasdaq outperformed.

Stocks likely to be in focus later include JPMorgan (NYSE:JPM), which is suing former private bank head Jes Staley for any damage it incurs from links to the deceased sex trafficker Jeffrey Epstein. JPMorgan is seeking $80M from Staley, his entire compensation between 2006-2013. ADRs in Barclays (NYSE:BCS), where Staley was CEO until November 2021, fell in premarket trading.

Oracle (NYSE:ORCL), Ulta Beauty (NASDAQ:ULTA), DocuSign (NASDAQ:DOCU) and Gap (NYSE:GPS) all report earnings after the close

4. Biden to present budget plans 

U.S. President Joe Biden will lay out some $3 trillion of deficit-cutting measures in his administration’s new budget plans, as his Democrat allies prepare for a showdown in Congress over the debt ceiling.

Various reports indicated that Biden will renew his call for a tax on billionaires’ wealth, as well as taxing stock buybacks and private equity’s internal returns. Those measures have failed to gain any traction in previous initiatives, leaving cynics wondering whether the budget is not really just a stunt to profile Republican opponents as defenders of a small, wealthy minority.

5. European gas prices hit new low as Freeport LNG gets restart OK

European natural gas fell to their lowest since the summer of 2021, after a major LNG plant in the U.S. received the all-clear from regulators to resume exports.

Freeport LNG has been out of action for months while it repaired damage from a fire. That fire choked shipments to Europe at the peak of last year’s energy scare.

Front-month TTF futures, the reference price for northwest Europe, fell as low as €40.50 a megawatt-hour before bouncing to trade at €41.73/MWh by 06:45 ET, down 1.4% on the day.

Elsewhere in energy, U.S. crude futures were up 0.1% at $76.75 a barrel, while Brent was up 0.1% at $82.77 a barrel.


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