The Weekly Scan March 15, 2023

Welcome to the Weekly Scan. Here’s what we’re following for the week of March 15, 2023.

Trouble at SVB. You may have heard that over the weekend, two banks, Silicon Valley Bank (SVB) and Signature Bank, were closed and taken over by the federal government when it became clear that the banks were not able to support those who banked there. The market responded to the news with volatility, which is likely to continue for some time. 

Rest assured: the FDIC works. You’ve probably seen the Federal Deposit Insurance Corporation (FDIC) logo in banks, but you may not realize how important it is. In the case of SVB, after it collapsed, the government—via the FDIC—guaranteed up to $250,000 of deposits per customer. This should be reassuring because it proves that banking regulation works for the systems it is set up to protect. 

Our takeaway here is to make sure your bank or financial company keeps your cash in an FDIC-insured account. Note: Funds in your Stash banking account are FDIC-insured through Stride Bank N.A., member FDIC.¹ The funds in your portfolios have different protections. You can learn more here.

The banking sector in particular has seen a lot of movement in response to this news as well as the fact that the government stepped in and secured all assets beyond $250,000. Many are wondering if the sector, and in particular, regional banks, are vulnerable. We can’t know the future, but as always, our advice remains the same: the best thing for you to do as a long-term investor is to continue to follow The Stash Way.

• Buy and hold
• Diversify
• Invest on a regular basis (dollar cost average)

As part of a long term, diversified investing strategy, consider taking advantage of investments like TFLO ETF which now offers a 4.7% interest rate.² It’s a great place to park your cash in this rising interest rate environment by buying U.S. government securities.  

CNBC and New York Times

Here’s the drill. The Biden administration gave its approval for ConocoPhillips to kick off its Willow oil-drilling project in Alaska’s National Petroleum Reserve. The initiative is expected to result in up to 180,000 barrels of oil per day, or 40% of Alaska’s current crude production. ConocoPhillips will be permitted to drill in three out of five of the proposed drilling sites. While representatives from Alaska, such as Senator Lisa Murkowski, praised the decision, environmentalists argued that the move will set back Biden’s other plans to fight climate change. The drilling is expected to produce 270 million tons of CO2. 

Wall Street Journal

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Pfizer’s post-Covid plans. In preparation for an expected fall in sales from Covid-19 products, Pfizer announced that it had reached a deal to acquire Seagen, which has developed targeted cancer therapies, in a $43 billion deal. The deal will add 4 approved cancer treatments to Pfizer’s product lineup. Those treatments generated $2 billion in sales during 2022. Pfizer has used its earnings from its Covid-19 vaccine and treatment to make a series of acquisitions. Seagen is the largest addition in that series of purchases. Pfizer is buying Seagen at $229 per share, 16% higher than Seagen’s Monday trading price of $200.93.

Reuters

Boxed out. The box office bump, or the increase in sales at movie theaters for Oscar-nominated movies, is reportedly shrinking. The 10 movies that were nominated for Best Picture at the Academy Awards generated $82 million since they were announced at the end of January. In contrast, the 2020 Oscar nominees brought in $201 million during the period between the nominations and the awards. Demand for those movies may have moved to streaming, especially since some of the Best Picture nominees were released earlier in the year than they usually are. 

CNBC

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