Fed Balance Sheet, Jobless Claims May Shed Light on Economic Damage Wrought by Banks

Good morning contrarians! It is Thursday, March 16.

Yesterday was another volatile day, led again by financials. This time it was the European banking sector that spooked investors, with Credit Suisse (CS 0.00%↑) stock cratering on news that its largest investor would not be supplying additional funds.

State of Play

As of 0630 a sense of calm has settled over markets. You have largely the Swiss government to thank for this, with the central bank and other regulatory bodies supplying much needed liquidity that CS says it will preemptively tap. The stock surged in European trading and continental bourses are a bit higher:

• In the US, stock futures are mixed. The S&P 500 is flat while Nasdaq and Russell 2000 which tracks small caps pointing to small gains;

• Bonds are selling off a bit at the short end of the curve, an indication of relief. The 2-year yield is up 5 basis points to move north of 4% again. The 10-year is flat at 3.51% (yields move inversely to prices);

• Commodities are rebounding a tiny bit, with WTI crude oil up 1% to trade around $68/barrel and copper up 1%.