Bank Stocks Rebound Ahead of Key Inflation Read 📈

Stocks closed with mixed results on Monday, despite widespread concerns about the health of the U.S. regional bank sector. The Nasdaq added 0.4%, while the S&P 600 lost 0.1% and the Dow fell 0.2%. The small-cap Russell 2K underperformed its large-cap cohorts, tumbling 1.6% on the trading session.

This morning, futures are trending higher in early premarket trading. Dow and S&P 500 contracts are currently up 0.4%.

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🏛 Regional Bank Stocks Rebound. Yesterday's regional bank rout is beginning to reverse course in the premarket, but most stocks in the sector are still trading well below their usual trading range. The SPDR Regional Banking ETF is up 7.1% in the premarket after falling 12.3% on Monday.

First Republic Bank is rebounding from its Monday sell off in dramatic fashion.

The regional bank stock plummeted 61.8% as part of a broad sell-off in bank stocks on Monday.

However, JPMorgan Chase [JPM] and the Federal Reserve extended emergency loans to the bank over the weekend.

The Fed also announced a new term loan facility for banks that should provide additional protection against insolvency for America's regional banking system.

In an appearance on CNBC yesterday, First Republic's CEO said that they're not seeing extreme outflows from customer accounts.

Nonetheless, shares sold off yesterday, but the market is regaining its reason today. Shares are up 46.2% on active trading volume in the premarket.

My Take: I thought this sell off looked overdone yesterday, so this rebound gives me some satisfaction. However, the stock is still trading for well below its usual trading range. Investors aren't totally reassured about the bank's future just yet, so there could be more upside ahead if FRC can stay afloat.

KeyCorp is also rebounding after a brutal Monday sell-off.

The Ohio-based bank stock tumbled 27.3% yesterday, as investors dumped small bank stocks in favor of less riskier assets.

Yesterday, Bank of America Securities lowered its price target on KEY to $17 from $20, but maintained its "buy" rating on the stock.

BoA analyst Ebrahim Poonawala cited a difficult environment for regional banks moving forward, and said "interest rates pose significant risk" for the sector.

Odeon Capital also downgraded the stock from "buy" to "hold".

However, KEY is reversing course in this morning's pre-bell session. Shares are up 18.0% on active trading volume.

My Take: I don't see any specific reason KEY sold off yesterday, aside from being a regional bank stock. It appears that it was just sucked into a broad sell off.

A new collaboration is boosting shares of Ainos Inc.

The healthcare company signed a memo of understanding (MOU) with Merdury Biopharmaceutical to jointly explore and develop a strategic relationship.

Under the agreement, the companies will evaluate Merdury's potential investment in the completion of Ainos' Phase 3 clinical trial for VELDONA drug candidate.

VELDONA is being considered as a potential treatment of oral warts in HIV-seropositive patients.

The companies will also explore the possibility of Ainos licensing Merdury's new drug development platform.

Ainos also announced a $3 million private placement of convertible notes early this morning.

AIMD is this morning's top performer with an 83.3% gain in early trading.

My Take: This could be a big step forward for AIMD. It could see more gains if it can successfully get VELDONA to market.

A buyout deal is rocketing shares of Momentive Global ahead of the open.

The SaaS firm announced late Monday that it has agreed to be acquired by a consortium led by Symphony Technology Group in an all-cash $1.5 billion deal.

Under the terms of the deal, MNTV shareholders will receive $9.46 for every share of common stock in their possession.

The deal will also take Momentive Global private, so its stock will no longer trade on public exchanges upon closing.

Momentive's board has already approved the transaction, which is expected to close in Q2 or Q3 of 2023.

News of the buyout rallied MNTV to a 19.8% premarket gain, and it's one of this morning's most actively traded stocks.

My Take: This is a nice pop for MNTV shareholders, but it's too late to make any real moves on this stock. The potential downside outweighs any potential upside at this point.

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