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S&P futures are flat as regulators work to thwart any contagion from SVB’s demise: Live updates

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Traders work on the floor of the New York Stock Exchange (NYSE) during morning trading on February 01, 2023 in New York City.

Michael M. Santiago | Getty Images

S&P 500 futures were flat Sunday evening as investors awaited details on the next steps in the Silicon Valley Bank crisis.

S&P 500 futures were flat and Nasdaq 100 futures gained 0.4%. Futures tied to the Dow Jones Industrial Average were off by about 60 points.

On Sunday the Federal Reserve and the Federal Deposit Insurance Corporation were in discussions about potentially creating a backstop for uninsured deposits at Silicon Valley Bank, a source told CNBC, for the event that the FDIC is unable to find a buyer for SVB, or at least key parts of it.

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Federal regulators are conducting an auction for Silicon Valley Bank. Final bids were due Sunday, according to a report from Bloomberg News.

The major indexes are coming off a losing week after the collapse of SVB sent shockwaves through the stock market. The Dow on Friday dropped 345 points, or 1.07%. The S&P 500 shed 1.45% and the Nasdaq Composite fell 1.76%. All of the major averages posted weekly losses, with the Dow finishing its worst week since June. 

“Bears came out of hibernation after waking up to a warning shot from the banking space,” said Adam Turnquist, chief technical strategist for LPL Financial. “Contagion risk stemming from the collapse of SVB Financial triggered a sell now — ask questions later backdrop for stocks.”

The yield on the 2-year Treasury note fell sharply last week, posting its biggest 2-day drop since 2008 as SVB’s shutdown sparked a flight to safer assets like government bonds.

“While Treasury yields pulled back sharply this week and violated several key support levels, there is little silver lining as the downside was largely driven by safe-haven flows related to rising recession risk and fear over the fallout from the banking sector,” Turnquist added.

On Friday Silicon Valley Bank was taken over by regulators after massive withdrawals a day earlier created a bank run. Investors are now monitoring news out of Washington, waiting to see how regulators will manage the fallout.

Elsewhere, investors are watching various economic reports this week. Tuesday’s consumer price index report on Tuesday is the last major inflation data release ahead of the Fed’s next meeting, ending March 22. February retail sales and the producer price index are also on deck.

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“For the week ahead, it’s going to be about how fear and economics play out,” said Amit Sinha, head of multi-asset design at Voya Investment Management. “If the market feels that SVB is an isolated event, then the fear and contagion driven selling may abate. And if that happens then it’s all back to the Fed and inflation.”

Source: CNBC

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