Bond Market screaming for Fed Cut, JP Morgan warns of Doom in Commercial Real Estate & Coinbase apologizes for FUD towards $PEPE [Bulls, Bears & Blockchain May 11, 2023]

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Join us on Twitter spaces for today’s Bulls, Bears & Blockchain show, where we’ll be tackling some of the most pressing topics in the financial world.

Be sure to join the conversation as we discuss:

  • Fed to Pause, Cut or Hike again?
  • JP Morgan Warns Commercial Real Estate Loans are an Issue
  • #DeleteCoinbase Trending after top US Exchange spreads FUD about $PEPE

Don’t miss out on this exciting discussion! Tune in to our Twitter Spaces show today at 5:30 pm EST and join the conversation.

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Will the Fed Pause, Cut or Hike again?

The Federal Reserve’s monetary policy has been a hot topic among economists and investors, with many speculating whether the Fed will cut, pause, or hike rates in the near future.

The upcoming June 14th meeting will provide some insight into the Fed’s thinking, with a possibility of a stated pause in interest rate hikes, a different stance than the one taken in the previous week.

However, the bond market is giving a different signal, with many predicting a rate cut by September.

Despite this, the Fed seems to be unmoved by the bond market’s prediction. Investors are approaching the market with caution, positioning their equity portfolios for the next two quarters.

Nevertheless, the market is showing signs of returning to an appetite for risk, which could be an encouraging sign for those invested in the market. It remains to be seen how the Fed will act in the coming months, but investors will undoubtedly be keeping a close eye on its actions and decisions.

Do you think the FED will pause, cut or hike again?

Join us today live on twitter as our market masters Marc Lopresti and Jon Najarian discuss their thoughts.

JP Morgan Warns Commercial Real Estate Loans are an Issue

The Federal Reserve has released its latest Financial Stability Report, which highlights the risk that commercial real estate (CRE) poses to US banks, particularly smaller, regional lenders that are most exposed to the sector.

Of the 60% of CRE loans held by banks, more than two-thirds of those are held by lenders with less than $100 billion in assets as defined by the Fed.

These lenders collectively have nonfarm, nonresidential CRE loan portfolios totaling $1.55 trillion, of which $500 billion is invested in office and downtown commercial real estate.

Losses on CRE loans will depend on the borrower’s degree of leverage, as property owners with high equity cushions are less likely to default.

Also, banks that issue loans with higher loan-to-value (LTV) ratios are more likely to experience financial difficulty as these loans are harder to refinance or modify. Among regional banks, exposure to commercial real estate as a percentage of total loans ranged from 15.8% at KeyCorp to 40.2% at East West Bancorp.

The report suggests that office properties are disproportionately issued by the smallest lenders, which have greater exposure to the sector than big banks and mid-sized regional lenders. While many economists have warned about commercial real estate, most of the worst distress has been confined to office properties, which make up 24.2% of the $10 trillion CRE market.

Overall, the report concludes that losses on CRE loans could be significant, particularly for smaller regional banks, but the crisis is not systemic, and big banks and most regional lenders have little exposure to the sector.

PacWest Punishment Continues

Regional bank stocks took a hit on Thursday after California-based lender PacWest reported a loss of 9.5% of deposits last week due to increasing pessimism surrounding the industry. PacWest first grabbed investors’ attention following Silicon Valley Bank’s failure in March and reports of its consideration of a sale or capital raise. This caused concern for the safety of customer deposits, leading to the majority of the deposit drop on May 4 and May 5. PacWest’s stock fell by 33% on Thursday.

Other regional banks, such as Western Alliance, also experienced pressure from depositors and investors. Western Alliance reported a $600 million increase in deposits between May 2 and May 9, but recently denied rumors of exploring a sale of parts of its business. Despite optimism from Wall Street and Washington insiders, investors still punish regional banks that share similarities with the three mid-sized banks already seized by regulators. This situation has led to calls for a ban on short selling or investigations into investor behavior

Join us live today on twitter spaces as our market masters Marc Lopresti and Jon Najarian discuss what this all means.

#DeleteCoinbase Trending After Top US Exchange Coinbase Spreads FUD About $PEPE

Coinbase has raised concerns about the rise of Pepecoin (PEPE) and Bitcoin-based meme coins.

The recent decline in the crypto market has left traders hunting for profits by focusing on jokes instead of fundamental plays, leading to an increase in extremely large gas fees on the Ethereum blockchain.

Last week, trading volume on meme coins jumped to $2.3 billion, more than six times higher than the previous week, and the highest level since May 2021. Coinbase’s newsletter noted that the ongoing meme coin mania was led by the rise of PEPE, which has grown nearly 55,000% since its issuance in mid-April, reaching a $1.8 billion market capitalization in just under three weeks.

However, the newsletter has come under fire from some Crypto Twitter community members for pointing out that the Pepe the Frog meme, which serves as the mascot for Pepecoin, has been used in racist ways on the internet. The Anti-Defamation League notes that although the meme has proliferated on controversial internet forums associated with alt-right politics, the majority of uses of Pepe the Frog have been non-bigoted.

Join us live on twitter spaces today as our crypto expert Alex Mascioli discusses this and a whole lot more in the latest blockchain news.

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With so much at stake, it’s crucial to stay informed and involved in these discussions.

Join us today at 5:30 pm EST on our Twitter Spaces, where we’ll delve deeper into each topic, exploring the implications of Hedge funds positioning towards US Treasuries, Data industries thoughts towards inflation and Ethereum gas fees mooning with the meme coin mania.

Don’t miss this opportunity to engage with experts and make your voice heard in this critical conversation.

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