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Your Quiver | Tuesday, March 21, 2023

CIO | Nadine Terman @SolsteinCapital details what she's seeing in global financial markets.

Stating the Obvious

Too many to share today. Goldman suspended its research rating on $FRC. JPM is advising $FRC on strategic options while being one of its most obvious buyers. Investors (especially bond holders) are going to think twice when considering Swiss assets in the future. Xi invited Putin to visit China—sounds like they haven’t agreed yet on how to circumvent sanctions and get a piece of Russian’s commodities and resources. Treasury Secretary Yellen changed her tune, and now she’s trying to figure out a way to guarantee all deposits, not just those at the first three banks to run into trouble (remember when she said they weren’t going to do that? Things must be pretty bad across small banks, right?).

A New #1 BFF

Russia overtook Saudi Arabia to become China’s top oil supplier. They’re shipping ~2mm barrels/day. For metals, China nearly doubled imports of Russian aluminum to 538.6k tons in the past year since the Ukraine invasion.


Scott Macklin, director of leverage loans at Alliance Bernstein called the primary loan market a “Scooby Doo ghost town—recently deserted and a bit haunted.” He’s talking about the trend for bank underwriters in the US and the EZ pulling sales and pausing future leveraged finance deals. Barclays withdrew an $880+mm loan for Ineos Enterprises, which was supposed to fund an acquisition. Remember, a lot of these folks have to offload billions of dollars of risky corporate debt still on their books after mistimed financings last year.


Yah, it’s back. Remember that combo sport resembling basketball, football, hockey and gymnastics organized for those with a shorter attention span? Plus, we’re going to see the financial version of it tomorrow during the Q&A after Powell tries to give a “dovish hike” or a “hawkish hold”, having to balance fighting high, sticky inflation with the world’s concerns for financial ecosystems. Whether or not your day job requires you to be watching central bank decisions, the results will affect you. In particular, we’re watching the Dot Plot. Will it shift higher? Project a decline in rates at some point, as futures are hoping?

Hanging Tight

That’s what most equity investors are doing ahead of Powell’s announcement. With macro-focused investors having an outsized impact on markets these days, it’s hard for investors to plow money into the market ahead of big announcements. So, there’s cash sitting on the sidelines. Today’s stats show an 83% chance for a 25bps hike in the US.

A Golden Opportunity

Gold may surpass the record set during the pandemic ($2,075.47/ounce back in Aug 2020) if the current financial stress continues and central banks pause their rate hikes, according to Sprott.

SPAC is Back

Braiin, an Australian ag tech and service co, is going public via a $215mm merger with a blank-check firm. Remember 2021? By this point we saw 73 transactions valued at around $47bn, and this year we’re at 50 deals valued at $4.1bn. So, looks like the party is still going, but it’s a small one.