Raphael Stevens

Ron Baron, founder of Baron Capital
Anjali Sundaram | CNBC

Longtime investor Ron Baron said he bought the dip in Charles Schwab during Monday’s double-digit sell-off, CNBC’s Becky Quick reported.
The 79-year-old investor said he “modestly increased” his position in the financial name, seeing Monday’s pullback as a buying opportunity. He didn’t disclose how much he purchased. Baron Capital owned 7.8 million shares as of Dec. 31.

The stock jumped 13% in premarket trading Tuesday.
Schwab shares fell 11.6% on Monday as investors dumped the financial institution amid fears of a banking crisis in the aftermath of tech-focused Silicon Valley Bank’s and crypto-related Signature Bank’s collapses.
The Westlake, Texas-based financial company defended its financial position, saying it has plenty of access to liquidity and a low loan-to-deposit ratio. Schwab was taking hits along with other financial firms with massive bond holdings of longer maturities.

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A traveler walks toward the Uber rideshare vehicle pickup area at Los Angeles International Airport (LAX) on February 8, 2023 in Los Angeles, California. 
Mario Tama | Getty Images

Check out the companies making headlines before the bell:
First Republic Bank — The San Francisco-based bank stock jumped 45% after closing down 61.8% on Monday. First Republic shares rose amid a broader rebound in regional bank stocks. Western Alliance Bancorp and KeyCorp climbed 33% and 16%, respectively. Separately, Western Alliance rose after Wells Fargo reiterated its overweight rating on the stock, saying the risk/reward is attractive for the stock.

Uber, Lyft, Doordash — Shares of ride-sharing companies Uber and Lyft, and order delivery firm Doordash, rose more than 5% each after a California appeals court said the companies can continue to treat their drivers as independent contractors. That overturned a lower court decision that prevented them from doing so.
Credit Suisse — The bank stock fell by about 1.6% after Credit Suisse said it had found “material weaknesses” in its financial reporting processes for 2022 and 2021. Earlier Thursday morning, shares fell by 5% to hit a new all-time low.
United Airlines — The airline fell 5.4% in the premarket, a day after forecasting a first-quarter loss. United cited weaker demand growth compared with other months and higher fuel costs. It expects an adjusted quarterly loss of between 60 cents and $1 per share, more than its previous forecast of adjusted earnings of 50 cents and $1 per share.
Buzzfeed — Buzzfeed shares dropped 10% after the internet media company issued a weak first-quarter revenue outlook. Buzzfeed guided for revenue of $61 to $67 million, compared to expectations of $83.6 million, according to FactSet. Otherwise, the firm beat sales expectations in its fourth quarter results, according to FactSet.
Gitlab — Shares plunged 29% after GitLab issued a softer-than-expected outlook. It posted fiscal-year 2024 revenue guidance of $529 million to $533 million, lower than a Refinitiv forecast of $586.4 million. Otherwise, the firm reported a beat on the top and bottom lines in its fourth quarter results, per Refinitiv.

Honeywell International — Honeywell shares rose 0.4% after the conglomerate announced that Vimal Kapur, president and chief operating officer, will succeed Darius Adamczyk as CEO. The transition will take place on June 1.
Match Group — Shares added 2% after Barclays upgraded Match Group to overweight from equal weight, saying it’s transitioned to a value stock from an Internet growth stock over the past few years.  
Southwest Airlines — Shares rose 0.5% after Southwest Airlines CEO said it would increase winter staffing and equipment to avoid a repeat of mass cancelations over the holiday season.
Cvent, Blackstone — Cvent shares dropped more than 3% after the meetings and events tech firm said it would be acquired by Blackstone in a $4.6 billion transaction. Blackstone shares rose 1.8%.
— CNBC’s Michelle Fox contributed reporting

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The embattled Swiss lender published its annual report, which was scheduled for publication last Thursday, but ultimately delayed by a call from the U.S. Securities and Exchange Commission.
Following the completion of discussions with the U.S. regulator, Credit Suisse confirmed its 2022 results announced on Feb. 9, which showed a full-year net loss of 7.3 billion Swiss francs ($8 billion).
The bank’s shares fell a further 5% to a new all-time low during early trade in Europe on Tuesday.

The logo of Credit Suisse Group in Davos, Switzerland, on Monday, Jan. 16, 2023.
Bloomberg | Bloomberg | Getty Images

Shares of Credit Suisse fell by 5% in early Tuesday trade to hit a new all-time low, after the bank announced it had found “material weaknesses” in its financial reporting processes for 2022 and 2021.
Shares have slightly pared losses since, but remained down by more than 4% by 9:30 a.m. London time.

The embattled Swiss lender disclosed the observation in its annual report, which was initially scheduled for last Thursday, but was delayed by a late call from the U.S. Securities and Exchange Commission (SEC).
The SEC conversation related to a “technical assessment of previously disclosed revisions to the consolidated cash flow statements in the years ended December 31, 2020, and 2019, as well as related controls.”
In the Tuesday annual report, Credit Suisse revealed that it had identified “certain material weaknesses in our internal control over financial reporting” for the years 2021 and 2022.
These issues related to a “failure to design and maintain an effective risk assessment process to identify and analyze the risk of material misstatements” and various flaws in internal control and communication.
Despite this, the bank said that it was able to confirm that its financial statements over the years in question “fairly present, in all material respects, [its] consolidated financial condition.”

Credit Suisse further said its net asset outflows had declined but “not yet reversed.” The bank confirmed its 2022 results announced Feb. 9, which showed a full-year net loss of 7.3 billion Swiss francs ($8 billion).
Liquidity risk
In late 2022 the bank disclosed that it was seeing “significantly higher withdrawals of cash deposits, non-renewal of maturing time deposits and net asset outflows at levels that substantially exceeded the rates incurred in the third quarter of 2022.”
Credit Suisse saw customer withdrawals of more than 110 billion Swiss francs in the fourth quarter, as a string of scandals, legacy risk and compliance failures continued to plague it.
“These outflows stabilized to much lower levels but had not yet reversed as of the date of this report. These outflows led us to partially utilize liquidity buffers at the Group and legal entity level, and we fell below certain legal entity-level regulatory requirements.”

Credit Suisse acknowledged that these circumstances have “exacerbated and may continue to exacerbate” liquidity risks. The reduction in assets under management is expected to result in reduced net interest income and recurring commissions and fees, in turn affecting the bank’s capital position objectives.
“A failure to reverse these outflows and to restore our assets under management and deposits could have a material adverse effect on our results of operations and financial condition,” the report said.
Credit Suisse reiterated that it has taken “decisive action” on legacy issues as part of its ongoing massive strategic overhaul, which is expected to result in a further “substantial” financial loss in 2023.
The bank’s board collectively forewent a bonus for the first time in more than 15 years, the annual report confirmed, while taking home a combined fixed compensation of 32.2 million Swiss francs.

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The MSCI Asia Pacific index hit a low of 155.44 in afternoon trade – marking a decline of more than a 9% from its Feb. 2 high of 171.26 and wiping out its gains for the year so far.
It marks a sharp reversal after the index entered a bull market during the second trading week of the year, fueled by optimism from China’s reopening.

Allan Baxter | Photolibrary | Getty Images

Asia-Pacific’s leading index erased its year-to-date gains and is now flat in 2023 as bank stocks led declines Tuesday.
The MSCI Asia Pacific index hit a low of 155.44 in afternoon trade – marking a decline of more than a 9% from its Feb. 2 high of 171.26 and wiping out its gains for the year so far. The index closed at 155.74 on the last trading day of 2022.

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In January, the index entered a bull market during the second trading week of the year, fueled by optimism from China’s reopening.
MSCI’s broadest index of Asia-Pacific shares outside Japan meanwhile traded 1.47% lower Tuesday afternoon, also marking new lows for the year. Last month, traders saw room for the index to rally further despite near-term volatility.

Markets continued to see sharp losses Tuesday on concerns of a spillover effect from Silicon Valley Bank’s collapse, even after U.S. regulators stepped in to protect depositors over the weekend.
“Concerns of a global economic rout continue to put pressure on the region, which are more value-focused,” IG analyst Yeap Jun Rong said in a Tuesday note.
On Tuesday, bank stocks in Japan declined sharply, weighing on the wider Topix, which led the sell-off in Asia-Pacific. The index closed 2.7% lower as financials dipped 4.65%, Refinitiv data showed.

Tokyo-listed shares of Mitsubishi UFJ Financial Group fell 8.59%, Sumitomo Mitsui Financial Group shed 7.57% and Mizuho Financial Group dropped 7.14%. Technology giant SoftBank Group also saw losses of more than 4%.

Yeap also noted indexes such as the Straits Times Index in Singapore has close to 45% of its weightage in bank stocks. Shares of DBS, United Overseas Bank and Oversea-Chinese Banking Corporation led declines Tuesday.
On Monday, the Monetary Authority of Singapore said its exposure to failed U.S. banks was “insignificant.”
“Banks in Singapore are well-capitalized and conduct regular stress tests against interest rate and other risks,” it said, adding that their liquidity positions are healthy and supported by a “stable and diversified funding base.”

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Nomura equity strategists including Chetan Seth reiterated their February call and still expect more gains for the index.
Strategists wrote in a Monday note, “Although we do not think there is any material fundamental impact on Asian stocks from US banking sector issues, there is always risk of some ‘skeletons emerging from the closet.'”
“We are inclined to believe that these issues will not be systemic to the health of the banking sector,” he said.

Stock picks and investing trends from CNBC Pro:

‘Special situation’

Societe Generale’s head of Asia equity strategy Frank Benzimra said a rise in systemic risk is widely seen as part of a pattern at the end of a Fed cycle.
“When inflation rises, the first order effect is higher rates, the second being a rise in systemic risk – the SVB episode is part of this framework,” he said, adding that threats to financial stability “typically happens at the late stage of the Fed cycle.”
“Having said that, SVB is very much a special situation in terms of its funding, not being subject to coverage and funding ratios (LCR/NSFR rules), and MBS/UST portfolios being Available-For-Sales,” he said.

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VCs and an analyst told CNBC that Silicon Valley Bank’s collapse is unlikely to affect fundraising for tech startups in Southeast Asia.
“I think it’s a watch out, but I don’t think that contagion spreads,” said David Gowdey, managing partner at Southeast Asian venture capital firm Jungle Ventures, on CNBC’s “Squawk Box Asia.”
Constellation Research analyst Ray Wang also told CNBC that VCs will still be able to fund tech entrepreneurs.

People wait outside the Silicon Valley Bank headquarters in Santa Clara, CA, to withdraw funds after the federal government intervened upon the bank’s collapse, on March 13, 2023. 
Nikolas Liepins | Anadolu Agency | Getty Images

The collapse of U.S.-based Silicon Valley Bank is unlikely to hit fundraising for tech startups in Southeast Asia, venture capitalists and an analyst told CNBC.
The bank served many venture capital firms and venture capital-backed startups. But last week, depositors rushed to withdraw their funds as panic over the bank’s financial situation spread, causing it to collapse.

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“I think [the impact on fundraising is] a watch out, but I don’t think that contagion spreads,” said David Gowdey, managing partner at Southeast Asian venture capital firm Jungle Ventures, on CNBC’s “Squawk Box Asia” on Tuesday.
“I think Secretary Yellen and the government did a fantastic job of stepping in and taking away a lot of that risk, creating a lot of stability in the markets,” he said. On Sunday, U.S. officials including Treasury Secretary Janet Yellen announced plans to backstop depositors of the bank.

Gowdey said SVB was the firm’s primary bank, but added, “We pull a lot of that money into Southeast Asia, into Singapore banks. And so for us, the exposure to SVB was not large.”
Golden Gate Ventures, which also invests in Southeast Asian startups, said the SVB fallout is an opportunity for the region.
“This has actually been helpful to Southeast Asia. It now looks like a golden child to U.S. investors. Investors are starting to say: I want to diversify to different bank accounts, different geographies, different currencies,” Vinnie Lauria, managing partner at Golden Gate Ventures, told CNBC’s “Street Signs Asia” on Tuesday.

“And this is where Southeast Asia has the time to shine, in light of the situation,” added Lauria.
When asked if the situation makes fundraising more difficult, Gowdey said funds in Southeast Asia are well capitalized.
“I think it’s being selective because of the macro environment. [Accessing] the capital will get harder, but the capital is there and it’s getting deployed,” said Gowdey.

VC firms previously told CNBC that economic uncertainties have made them pickier with investments in 2023.
“[In terms of] access to capital to tech entrepreneurs, the VCs will still be able to fund them,” Ray Wang, founder and chairman of Silicon Valley-based Constellation Research, told CNBC’s “Street Signs Asia” on Tuesday.
“But it’s the question about taking bank loans, having operating capital, being able to actually run operations and having a bank that understands how a technology company works or biotech company works. That’s really what’s being lost here,” added Wang.

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