stocks, news, banking fears ebb

Takeaway delivery service Just Eat announced it would be changing the employment model it currently uses in some parts of the U.K., which will result in 1,700 redundancies.

Just Eat will instead rely on gig economy workers, or a self-employment model, which is already in place across most of the U.K.

A spokesperson for Just Eat Takeaway.com said in a press release: “Our top priority now is to support impacted employees and couriers. We are hugely grateful to our talented colleagues and couriers who have been part of the worker model in the UK.”

The company returned to profitability in 2022 with an adjusted EBITDA of 19 million euros ($20.5 million) after a 350 million euro loss in 2021.

Shares of Just Eat were down 0.1% around 3.55 p.m. London time.

— Hannah Ward-Glenton

The European stock rally continued into the afternoon, with the Stoxx 600 up 1.7%, the U.K’s FTSE 100 and Germany’s DAX both up nearly 2%, and France’s CAC 40 up 1.8%.

All sectors had remained in positive territory through the session as of 2 p.m. in London, with banks up 4.3%, financial services up 3.6%, oil and gas up 3.4% and insurance up 3.1%.

UBS Group was the top riser among stocks, up 7.8% following its acquisition of Credit Suisse.

Other banks near the top of the pan-European index included Commerzbank, UniCredit, Natwest, Barclays, Standard Chartered and Deutsche Bank.

— Jenni Reid

Here’s how the major U.S. indexes opened: 

• The S&P 500 was recently up 1.1%
• The Dow Jones Industrial Average gained 333 points, or 1.05%. 
• The Nasdaq Composite added nearly 1%. 

Investors are showing optimism after Treasury Secretary Janet Yellen said Tuesday morning that the government is willing to backstop more bank deposits if necessary.

— Pia Singh

Carl Weinberg, chief economist and managing director of High Frequency Economics, says “while I feel bad about all these CoCos and AT1s who are losing their money … this is what the system was designed to do.”

European yields ticked higher on Tuesday, amid a pick-up in investor optimism and with eyes on the start of the Federal Reserve’s monetary policy meeting.

The benchmark Germany 10-year bond yield was up 17 basis points to 2.267% by early afternoon, with 2-year yields higher by 24 basis points.

The 10-year yield fell to a 13-week low of 1.923% on Monday, Reuters reported, as markets processed the UBS acquisition of Credit Suisse and news that major central banks were working with the Federal Reserve to boost dollar liquidity.

Italy’s 2-year yield was up 13 basis points, while the yield on short-dated U.K. gilts added 8 basis points.

Yields move inversely with prices.

David Benamou, chief investment officer at Axiom and Credit Suisse AT1 bondholder, discusses the controversial decision by Swiss authorities to write down $17 billion of AT1s as part of the bank’s emergency sale to UBS.

The U.K. recorded a £16.7 billion ($20.4 billion) budget deficit for February, the biggest loss for the month since records began in 1993.

Spending was higher in part due to the continued program of energy bill support being provided to businesses and households. Last February’s figure was £7.1 billion.

A poll of Reuters economists had expected public sector net borrowing, which excludes state-owned banks, of £11.4 billion.

But total tax receipts were also higher, coming in at £77.8 billion versus £72.8 billion last year.

Ruth Gregory, deputy chief U.K. economist at Capital Economics, said in a note that the full-year deficit was likely to come in below the official forecast of £152.4 billion, or 6.1% of GDP, and changes to student loan payments had not yet been accounted for.

This could give the treasury “more money to play with” in the next fiscal statement in the autumn, though turmoil in the banking sector could deepen broader economic concerns.

Samuel Tombs, chief U.K. economist at Pantheon Macroeconomics, said the ruling Conservative party would likely be tempted to loosen fiscal policy before the next election, expected in 2024.

— Jenni Reid

The European banking sector was up 3.6% at 9:50 a.m. London time, despite concerns over the wipe-out of Credit Suisse AT1 bondholders’ investments.

Stoxx 600 banks are down 13.06% in the month to date, according to Eikon data, amid the collapse of two U.S. banks, a sell-off of U.S. regional banks and the UBS buy-out of Credit Suisse.

EU and U.K. regulators on Monday said that they would maintain the established order of equity instruments being first to absorb losses, as they attempted to prevent a market rout.

Russ Mould, investment director at AJ Bell, said that the lack of fresh troubles in the banking sector over the last 24 hours had given markets hope that the crisis may have peaked — but nerves could be shaken up again by the Federal Reserve monetary policy decision due out Wednesday.

— Jenni Reid

Bob Parker, senior advisor at International Capital Markets Association, says “the situation today is totally different from that of 2008.”

While the European banking sector posted strong gains Tuesday morning, there was no such relief for Credit Suisse‘s battered share price, which fell 1.75% after yesterday’s 56% loss.

UBS Group, which moved from losses to slight gains yesterday, was up 3.7%.

Europe’s Stoxx 600 was up 0.8% shortly after the open, with banks shaking off recent worries to lead gains with a 1.85% rise.

With all sectors posting gains, auto stocks were up 1.25% and financial services rose 1.23%.

France’s CAC 40 was up 1.1% despite domestic turmoil after the government survived a vote of no confidence on Tuesday. Germany’s DAX was up 0.9%, while the U.K.’s FTSE 100 rose 0.7%.

The recent share price falls in European financial institutions have presented a buying opportunity, according to RBC Capital Markets.

The investment bank named five stocks to buy during the share price dip, noting that these financial institutions are not the type ever to face a bank run.

CNBC Pro subscribers can read more here.

— Ganesh Rao

European markets are set to open in positive territory Tuesday.

The U.K.’s FTSE 100 index is expected to open 16 points higher at 7,418, Germany’s DAX 92 points higher at 15,020, France’s CAC 33 points higher at 7,051 and Italy’s FTSE MIB up 104 points at 25,537, according to data from IG.

Earnings are set to come from RWE and on the data front, Germany’s ZEW survey of economic sentiment will be released, as will new car registration data for several European countries.

— Holly Ellyatt

Fears of contagion in the banking sector may have subsided with a rescue deal for Credit Suisse, but Goldman Sachs Chief Global Equity Strategist Peter Oppenheimer believes stocks are not out of the woods yet.

“Even if markets rebound from current levels in the short term, high uncertainty and lowered confidence levels are likely to mean an ongoing ‘fat & flat’ market given that valuations do not look particularly attractive,” he said.

Pro subscribers can read more here.

— Zavier Ong

It’s not just regional bank shares that have been hit by the recent banking crisis — large-cap bank stocks have also tumbled.

But some analysts say the selloff is overdone.

Kenny Polcari, chief market strategist at SlateStone Wealth, described the pullback as “an opportunity for those that have a strong stomach,” referring to stocks such as JPMorgan, Bank of America, Citi and Wells Fargo.

For those looking to invest, CNBC Pro takes a look at what analysts are saying about JPMorgan Chase and Bank of America in particular.

CNBC Pro subscribers can read more here.

— Weizhen Tan