This failure marks the second-largest bank asset failure in U.S. history (the first being the collapse of Washington Mutual in 2008) and coming just months after the Silicon Valley Bank collapse.
So, what happened this time?
Back in March, 11 of the country’s largest banks sent First Republic $30 billion in deposits to try and prevent collapse. And it worked, for a while.
But the fact is that the bank continued to struggle and shares continued to drop.
Then last week the company released its earnings results and the Federal Deposit Insurance Corporation (FDIC) decided it was no longer sustainable on its own.
With the FDIC in control, officials accepted the bid from JPMorgan Chase. And according to California’s Department of Financial Protection and Innovation (DFPI), JPMorgan Chase will “assume all deposits, including all uninsured deposits, and substantially all assets of Frist Republic Bank.”
JPMorgan CEO Jamie Dimon went on to state that “this acquisition modestly benefits our company overall, it is accretive to shareholders, it helps further advance our wealth strategy and it is complementary to our existing franchise.”
And as for the future of First Republic shares, the stock was delisted today, meaning the NYSE has stopped listing its shares to be traded on the exchange.
Now, those who followed my Portfolio Grader would’ve known to stay far away from FRC before now. The stock fell to a D-rating last September, making it a “Sell” and stayed there until last month when it fell further to an F-rating, making it a “Strong Sell.”
So, in today’s Market 360, I’ll share the stocks my system flagged this week that should be avoided right now. And then, we’ll consider what these recent banking crises could mean for the future of your portfolio.
This Week’s Ratings Changes
After taking a close look at the latest data on institutional buying pressure and each company’s health, I decided to revise my Portfolio Grader recommendations for 122 big blue chips. 47 were downgraded to a “Hold” (C-rating) or “Sell” (D-rating) and are not the stocks you want in your portfolio right now.
I’ve listed the first 10 stocks that were downgraded to a D-rating below, but you can find the full list – including their Fundamental and Quantitative Grades – here. Chances are that you have at least one of these stocks in your portfolio, so you may want to give this list a skim and act accordingly.
|Ticker||Company Name||Total Grade|
|ACI||Albertsons Companies, Inc. Class A||D|
|CME||CME Group Inc. Class A||D|
|CNA||CNA Financial Corporation||D|
|CSL||Carlisle Companies Incorporated||D|
|DAL||Delta Air Lines, Inc.||D|
|IQV||IQVIA Holdings Inc||D|
|JD||JD.com, Inc. Sponsored ADR Class A||D|
|KDP||Keurig Dr Pepper Inc.||D|
Now, from 1978 to 1982 I worked for the Federal Home Loan Bank of San Francisco, which is essentially now part of the Federal Reserve. This gives me a unique insight to what is going on right now.
During the last banking crisis in 2008, I remember it was hell on earth for those who didn’t prepare. And I can’t let that happen to my readers…
So, stay tuned, folks! Later this week I’ll be sharing more on the current banking crisis and how to prepare your portfolio.
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