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The US banking sector keeps tumbling

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Last Week’s Highlights

First Republic Bank falls on suspending dividend

During the last sessions, the US bank First Republic has suffered several drops in its shares. For that reason, the entity received a rescue package with $30 billion in deposits injected by large US banks. Despite this, the bank’s shares plunged 33%, which marks an accumulated fall of more than 80% in the last 10 sessions. According to information from the New York Times, First Republic was in talks to raise money from other banks or private equity firms through the sale of new shares. In the newspaper report, there is also talk that the bank could negotiate its sale. First Republic declined to comment on the matter.

SVB Financial looks for bankruptcy protection

With the growing problems in the banking sector, SVB Financial Group filed for bankruptcy. Last Friday, it announced that it filed for Chapter 11 bankruptcy protection to seek buyers for its assets. This comes after the Silicon Valley Bank unit has already been placed in receivership by US regulators. This comes at a time when fears of financial contagion are growing as shares of major banks fell between 1.5% and 3% in early trading. Since the collapse of Silicon Valley Bank and Signature Bank last week, financial stocks have lost more than billions of dollars and the credit environment has worsened for many Wall Street banks.

Coming Up This Week

FedEx shares rise on optimistic forecast

Recently, FedEx has been gradually reducing its operating costs by closing offices, eliminating certain jobs, reducing flights, grounding aircraft, and canceling Sunday deliveries in remote areas. Thanks to this, and despite the poor conditions the market is going through, the US company raised its profit forecast for the fiscal year 2023. The company announced that its plan included cutting $3.7 billion, which boosted its shares by more than 11%. “Our cost measures are taking hold, leading to an improved outlook for the current fiscal year,” FedEx CEO Raj Subramaniam explained in a statement.

Meta’s new subscription service

Meta Platforms on Friday launched a subscription service that allows users of both Facebook and Instagram to pay for account verification. The service known as Meta Verified will be available for the US only and will award a blue badge to users after they verify their accounts using a government ID. The subscription will be priced at $11.99 monthly from the web, or $14.99 from iOS and/or Android. This is similar to what Twitter already does since the Elon Musk acquisition, who launched their subscription service called Blue. At its inception in November last year, many users were impersonating celebrities and brands on the platform. For that reason, Twitter Blue was suspended for a while and returned with the distinctive feature of having different colored brands to distinguish individuals from companies, governments, and/or public figures.

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