Bloomberg - Evening Briefing - What banking crisis?

Retail investors have joined the growing chorus saying that the banking crisis may be over. Individual investors have been pouncing on battered bank stocks, pouring money into heavyweights. Net purchases of Bank of America stock this year soared to $769 million, catapulting the financial giant past former stock darlings like Netflix and Rivian. Retail traders even bought more than $200 million of embattled First Republic Bank. But on Wall Street Wednesday, there was a whiff of caution, as traders worry softening economic data may mean something other than a soft landing. Here’s your markets wrap. —David E. Rovella

Professional stock pickers who feasted on last year’s volatility were positioned for more of the same heading into 2023. They got something else entirely, and are paying for it in their returns. Only one in three actively managed mutual funds was ahead of equity benchmarks during the first quarter, the worst performance since the end of 2020. 

UBS pulled off one of the biggest bank deals ever in a matter of days. But the groundwork had been laid for years. When Colm Kelleher became chairman last April, he inherited feasibility studies by predecessor Axel Weber dating back to at least 2020 on what a takeover of  Credit Suisse would look like. And early this year, after clients pulled tens of billions of dollars from its rival, Kelleher called on a small group of top advisers from his alma mater (Morgan Stanley) to ramp up contingency planning. The timing, as everyone now knows, was auspicious.

UBS Chairman Colm Kelleher at the company's annual shareholders meeting in Basel, Switzerland, on Wednesday. The bank is said to be planning to terminate as many as 36,000 workers in the aftermath of its Credit Suisse takeover. Photographer: Stefan Wermuth/Bloomberg

When Tim Cook made his first public appearance in China since the onset of the Covid-19 pandemic, the Apple chief executive approached it as a high-stakes diplomatic visit. He took colleagues to an Apple retail store in Beijing and met privately with high-ranking government officials, seeking to smooth things over, given tense US-China ties. But all the while, his people were busy planning on moving much of Apple’s production elsewhere. 

Tesla’s last few years have been remarkable on several fronts, and not just because of the antics of its erratic co-founder. The company built and  sold far more electric vehicles than other manufacturers with just a handful of models. Not only that, it kept growing volume without substantially redesigning those models. But now Tesla is starting to pay the price for its lassitude.

French President Emmanuel Macron said China can play a “major role” in Ukraine while adding that he opposes moves to decouple from the world’s second-biggest economy, as he pushes Europe to take a more moderate stance toward Beijing than the US is demanding. In Moscow, Vladimir Putin said the US encouragement of democracy in former Soviet states forced him to wage war on Ukraine.

Republicans have a big problem, Jonathan Bernstein writes in Bloomberg Opinion. The most significant election of 2023 went to the Democrats on Tuesday, as a liberal Wisconsin judge defeated her conservative rival to flip the 4-3 majority on the state Supreme Court. Her win continues a pattern of Democratic successes seen since Donald Trump captured the White House in 2016, Bernstein writes. The results are especially remarkable given President Joe Biden’s unpopularity nationally.

A total of 49 leading brands were on exhibit at this year’s Watches and Wonders expo in Geneva, with more companies crammed into hotel suites and lobbies throughout the Swiss city. It’s a lot of timepieces to take in, but here are the most interesting debuts, along with who you’re most likely to see wearing one.

Source (from left): Chanel; Rolex; Jaeger-LeCoultre

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• Why Trump’s next prosecution, if it happens, could come in May.
• Israel faces blowback over attacks on Muslim worshippers at holy site.
• Thanks to Putin, business booms for Germany’s defense contractors.
• Silicon Valley executive killed in San Francisco stabbing.
• Top tax mistakes to avoid if you make more than $100,000.
• “London Is Over.” A billionaire abandons Belgravia for Dubai.
• This is the final mission for a defunct California military base.

There’s the old saw about how Americans live to work (while Europeans work to live), but it turns out folks in the US are spending less time working than they did before the pandemic. While that may be good for many of those frazzled worker bees, it’s not necessarily great for the inflation-fighting Federal Reserve.

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