"It's very unfortunate, it's time-consuming, hopefully it won't happen, but it affects contracts, collateral, clearing houses, clients," Dimon said. The threat of more panic in the banking world is alarming just as reverberations from the March regional bank quake rumbled on.
PacWest shares were the latest to lunge on Thursday, dropping more than 20% after the Los Angeles-based lender said its deposits declined and that it had posted more collateral to the Federal Reserve to boost its liquidity. Bank stocks generally fell back after the U.S. Federal Deposit Insurance Corporation said around 113 of the country's largest lenders will bear the cost of replenishing the $16 billion in coverage the agency has forked out for the crisis. Against all that, markets have also been absorbing fresh signs of U.S. disinflation, a decent corporate earnings season and a spur to Big Tech stocks from artificial intelligence breakthroughs. Lifting the Nasdaq on Thursday, shares of Alphabet rose 4% a day after Google rolled out more AI products to take on competition from Microsoft . Shares of Tesla jumped in late trading after Elon Musk tweeted that he had found a new chief executive for Twitter. U.S. stock futures were higher again ahead of the open, with European stocks buoyed as well and the VIX volatility gauge subdued. Chinese stocks underperformed, with the G7 meeting mulling restrictions on investment to the world's second-biggest economy. One month Treasury bills yields remain elevated around 5.75% due to debt ceiling concerns, but three-month yields were more normal at 5.19% - indicating hopes all will be resolved in that time frame.
The dollar has also picked up steam, hitting its highest levels in more than a week.
The Fed may need to raise interest rates further if
inflation stays high, Fed Governor Michelle Bowman said on
Friday, adding that key data so far this month has not convinced
her that price pressures are receding.
Events to watch for on Friday:
* U.S. April import/export prices, University of Michigan May
consumer sentiment survey
* G7 finance ministers and central bankers meet in Japan
* San Francisco Federal Reserve President Mary Daly, Fed Board
Governor Philip Jefferson and St Louis Fed chief James Bullard
all speak. Bank of England chief economist Huw Pill speaks
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U.S. debt problem at G7 Jobless claims Small cap stocks underperform A push for liquidity ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(By Mike Dolan, editing by Christina Fincher,
mike.dolan@thomsonreuters.com. Twitter: @reutersMikeD)
