worst week for the year for the major average, and we're certainly key ued up to see nex week. >> how much of a valuation reset do we all get, not just silicon valley that's a big person, what's potentially happening with startups there we'll continue to track it. >> we will that does it for overtime. >> "fast money" starts now right now on "fast", wall street heading into the weekend wondering what the biggest bank failure since the financial crisis will mean for the markets and days and weeks to come we're going to head out west to find out the collapse of silicon valley bank and how it's affecting customers, bcs, and more plus, a not so obvious ripple effect, biotech taking it on the chin today and all this week, in fact we're going to explain why this silicon valley bank is so intertwined with the sector. late terk housing trade held up pretty far, but as the fed signals for hikes and credit

gets tighter, could this be a spring of pain for sellers in the sector i'm sarah eisen in for melissa lee. on the desk, tim seymour, courtney, jeff mills and steve grasso we're going to start with the latest on silicon bank federal regulators shutting down the and taking control of deposits scb's stock halted before the market open after falling another 60% in the premarket that on top of yesterday's 62% drop a month ago this was a $18 billion stock. now may be worth nothing let's get more on what's next for the bank and the industry. danny fortsen joins us, west coast correspondent for "the sunday times". danny, you're going to have a busy weekend following what comes next the fallout for startups and of course what happens to svb tell us what you're looking into.

>> it's going to be a very big weekend, right because as you have seen in the market, companies like first republic, some of these other regional banks, they have all seen their strocks crash as well because the fear is this is the sign of something bigger, that there is contagion what i think is happening now is there are going to be round the clock talks all weekend so monday morning they can come out and say, this company has been bought by a white knight, and everybody's deposits will be covered on a one to one basis, and that is very important so they can send a clear signal this is not the sign of something much deeper and bigger here. >> that would be very positive if they could find that, if the fdic could find a buyer. give us a little perspective on silicon valley bank. 16th largest bank in the country. the size quadrupled in the last five years talk a little bit about the influence out there and the size and scope here. >> yeah, so it is a unique bank,

right? it's a niche bank but an important niche. they market themselves as having half of all startups as their clients. but what that means is they're very exposed what we've seen in the startup market especially with zero% interest rates there have been flood of money coming in from venture capital, creating all these new companies, all on the book of silicon valley bank, and now everything's gone into reverse. they've started to pull their money out, interest rates have gone up, bond rates have gone down, and they've found themselves in a real crunch. >> hey, danny. >> hey, danny, it's -- >> what do you think is the most dislocated stock action you saw today on the back of svb was it first republic, charles schwab, or do you think this has the ability to cascade further and the story grow from here >> i think the hope obviously is

that it stops here, right? because this is -- it's a unique bank and also that it doesn't have many individual customers these are startups and so they're all controlled by basically a handful of venture capital funds. all of them said all at once, pull your money out before it's too late and what it really shows the herd mentality out here. once a few venture capital firms tell their companies get out, everybody starts doing it. and they have less than 40,000 commercial client. so it doesn't take much, doesn't take that big accounts to start a run. >> jeff? >> hey, danny. jeff mills just a quick question about potential bank regulation. i know it might be a littler here, but are there any rumblings around what the implications could be about regulation coming down the pipe once all this is handled >> i think it's a little early for, that but again, that's why

this weekend is going to be so important, because if they can say, look, this was a liquidity crunch, it was a cash crunch, we have figured it out, we've put this into receivership, and accounts are going to be covered on a one to one basis, then i think that will be a job done -- people can breathe a sigh of relief, but that's why this weekend is critical as a message to the market and of course to the wider banking sector. >> danny, we appreciate it keep us posted on your reporting. we'll follow it all weekend long gad to talk to you today tim, there are a lot of ripple effects to talk about, whether it's in the banking sector -- how about the startups they funded half of american startup, and now some of these uninsured depositors are waiting to figure out if they get the cash. >> there was news it was sidelined before this news, and they were working off money and capital in the coffers from last year as you said, they are the

banking partners to 50% or more of the firms that listed -- and again we're talking tech and health care. you say, what are the collateral effects? we're going to talk later about biotech. to me, there are different places where i think you have enormous exposure to this. when you look at the overall risk to the market, this is where people are here. we hadn't been weighing tail risk everybody knows this is the second largest banking failure since the crisis everybody knows this is the largest banking failure since the crisis, excuse me, and everybody knows where we are in the stock market the 50, 100, and 200-day, and you've got dynamics where people are evaluating the dynamics. that's the ripple effect going into a weekend doesn't surprise me because as we just talked about and danny talk about, this weekend's got a lot of news. >> steve, does it change your mind on anything one thing we've heard from all the bank interests is this is

idiosyncratic. doesn't necessarily reflect the fundamentals of the banking system. >> that's why i asked that question to danny. made me want to step in and buy first republic. >> should have bought it when it was down 50%. >> my crystal ball was foggy you don't know how long this is going to last, when it's going to cascade, what the stories are going to be monday, who's going to get pull into the this, what the next ongoing risk is going to be. but the trader in me wanted to take a flyer and make sure it's only a six and a half hour flier. i don't want to stay long these names. too much exposure to the downside >> courtney, what about you? >> i don't see this necessarily as something we need to be concerned about. i think it's too preemptive. they're primarily lending to vc companies and larger banks are much better diversified than that i think what's interesting is if you look at the bond mark, look at the credit spreads, that did not expand today, which is interesting because people are not putting a ton of extra risk

in a corporate bond than treasury bond. >> doesn't seem quite systemic, is that what you're saying >> correct. >> what about for regional banks, though? the big banks are well capitalized. we know that. >> j.p. morgan was up on the day. >> and received funds from this bank. >> right, they're taking market share, getting deposits. but what about regional banks? that's a pain spot, and a lot of them are in this pain. they're funding their long-term treasure holdings with these deposits that are leaving. >> no doubt, but they have a different funding base, and we just all said this if you think about the people that have been funding svb, it's a very different -- we talk about this last night. you've got main street more or less, i think, and community trust banks, they're going to argue this is actually their strength, that they're fund in the a very different way you're talk about funding liabilities and also the pressure that's going to be on net interest margins when in fact people can go to treasuries in six months. we know what you can earn on

that it's going to hit them at some level. the other side of this that could hurt a lot of banks is one of the events that i think was brought this cascade out for svb, which is a mark to market on this securities portfolio that if you're levered and have an outflow and have to meet liquidity, you have to sell at a loss in a world where there's been a lot of pressure they clearly were overleveraged, and this was a risk management issue. everyone wants to blame that on the fed, and i think that's absurd i don't defend the fed, although they moved quickly here, this was not the fed. >> they weren't diversified. >> i guess the question is, were those other banks -- are we going to see -- >> first republic came out and said the average account size is lower than 200,000 the business is lower than 500,000. any sector is not greater than 9% a their total deposits within

their business sector, within their business deposits. so they're already separating themselves from what we're dealing with on the news flow today, and as far as the major banks, courtney said it -- make mayo on this morning on a competitor liquidity up 50% -- everyone wants to compare this to the financial crisis. liquidity is 50% better than it was, capitalization 50% to 100% better than it was, and to tim's point, leverage in the bigger banks is nowhere near what it w was, and sub prime is not a blip on the screen. >> all things to be grateful for. one thing did remind me of crisis times when janet yellen put out a statement, said, everything's fine, quconvened a meeting, there's faith in the system and regulators can take care of out. jeff, any changes in the outlook to financials big or small as a result >> no, not particularly. i agree with what everybody else

is saying and i don't want to keep leaning into first republic full disclosure, it is a name unfortunately we do own. but i have a partner who has startup accounts at the bank, and once they move those out, that's where the money is going. first republic bank. so companies with relationships in california it could be a wind fall for them. that's pure speculation, but i think there's a potential for some opportunity in these names that might not have direct exposure and could stand to benefit from money moving in their direction. >> yeah, sit san francisco based. meantime, markets sinking to end the week even as a slowdown in hiring bolstered hope for a less aggressive rate hike next meeting. the economy did manage to add 300,000 jobs in february, but less than 500,000 added in january. ten-year seeing its biggest

basis drop since november. two-year posting its biggest fall since the 2008 financial crisis two-year shot up earlier this week till, the trouble hastened sell-off s&p got within seven points of going negative for the year, courtney are the broad markets overreacting >> i think the markets are reacting much more to what's happening in the banking sector, which we talked about, it's probably more knee jerk than anything else. but at this time jobs report had good data in there, especially since wage growth is not increasing as much as we thought. leaning into that there will be a 25 point hike. >> agree, the wages gave powell cover to not go 50 in march. when we come back, is the housing mark the next sector the market needs to worry about? diana takes us through the numbers. and later, more on the svb

failure. how the biosector is getting hit hard more "fast money" in two minutes. ♪ you know you make me wanna...♪ and then we looked around and said, wait a minute, this isn't even our stroller! (laughing) you live with your parents, but you own a hoin the me? mhm. cool...i don't get it. here's to getting financially ready for anything! and here's to being single and ready to mingle. who's ready to cha-cha?! ♪ yeah, yeah ♪

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welcome back to "fast money. today's sell-off dragging rates

lower. the 30-year fixed mortgage rate still hovering at 7%, and now home inventories are surging as a lack of affordability curbs demand diana with details. >> right below 7% but still bouncing up and down and new inventory and pricing data is showing why we're seeing a uniquely volatile market the monthly payment required to purchase a home jumped by $100 at the end of february at current income levels it takes over 33% of the median income to make those payments. 24% is the 30-year average according to black knight. that's nationally but some of the least affordable markets are las vegas, nashville, seat and lau los angeles. we went to an open house two sets of buyers came in three hours. the agent there said inventory is rising fast.

>> las vegas, a lot of people moved from california thinking this could be where they'd live in their no state income tax haven and got the call from work after covid saying, no, you got to come back home. >> in fact, inventory in las vegas is now up 200% from a year ago, and prices dropped in january, but then rose into the first week of march according to parcel why? those are closing, so contracts sign in the january when mortgage rates hit 6%. along with vegas, parcel is seeing homes go well below list price in phoenix, tampa, and charlotte, all of which were some of the hottest markets in the first part of the pandemic now, not so much. >> thank you so much tim, mortgage rates, we thought they had seen the top. now climbed up again now with this banking trouble they're going back down. >> they're linear and connect on the way up on the way down, there's credit and lending dynamics that suffer in the back of what's going on

banks are not giving more money away now on the account of what's happened over the last couple of days there's no question about it standards will tighten up. i think if you consider, it's great that the fed funds went from 469 down to 428 in one day. that does not mean the housing market changed the affordability dynamics diana just talked about are the ones we're talking at you can see that we know, and it's nice when the market has a rational reaction to the news that bad news was not good news for housing, and i think all that's what's going on the wealth effect across -- silicon valley is not u.s., not main street, but i think some dynamics are slowly playing out, and i don't see why you want the own the builders even on any weakness. >> everybody's been trying to find the bottom on builders and on rates. >> the problem is on tim's point

affordability, who's going to be putting your home up for sale if you have a 3% mortgage you have to own that period for some amount of time to have equity in it to make it worthwhile to turn it around and buy something for a 7% mortgage. >> doesn't that make it more attractive for a home builder? there aren't existing homes being sold there's millennials out there. 5.5 million households create. now people are lacking to buy homes and the existing homes aren't there. >> are there enough, though in enough people going out? what's really moving the market are people who are buying homes for cash now that to me is a very, very small population that can buy a home. >> some other part of input costs, labor markets haven't softened up. copper prices are almost near 10 to 20-year highs labor prices are down. stickiest part in the ppi cycle has been resurging

there's not a whole lot of relief on the gross margin side. is this a market where you want to be paying, i think at least on a relative basis, above to where they trade to the s&p? i don't think so. >> i feel like the housing trade has been all about mortgage rates for the last year and a half or so, and now today is the kind of day where you rethink the whole soft landing and what's going to happen to the economy, right and whether the hard landing comes more into focus. already the market was there, watching the yield curve this week. >> it is i do think these are all valid concerns i think you're having a standstill in the housing market but i continue to remain optimistic home builders have done very well, and i just think the supply/demand issue -- there's been so many less houses build because of the housing crisis. that's not going to get resolved and i think the home builders are going to continue to have a floor under where they are. >> we have a new development in the svb a gam one streaming company taking a leg ler iown

the fterhours. we'll tell you why when "fast money" comes right back. [office sounds] ♪upbeat music♪ ♪♪ ♪when the day that lies ahead of me♪ ♪♪ ♪seems impossible to face♪ ♪a lovely day (lovely day)♪ ♪(lovely day) (lovely day)♪ ♪(lovely day)♪ a bank that knows your business grows your business. bmo.

we have a market flash on roku shares dropping in the afterhours >> sarah, roku filed a s.e.c. filing saying it has funds at svb bank as of march 10th, they amounted to $487 million, which of course largely uninsured. that represents 26% of the company's cash, they say, but they have $1.4 billion in cash and cash equivalents distributed across multiple large institutions they say their deposits with svb

are uninsured and at this point the company does not know at what point they'll be able to recover the cash on svb. notwithstanding they believe they have existing liquidity balance and cash flow from operations will be sufficient to meet working capital, cash expenditures and ma rterial cas requirements at the moment there you can see share taking a big leg down. >> they were down 5%, now down 4. svb is being removed from the s&p 500. not surprisingly med tech community insulet is going to be replacing it jeff, roku, is this a risk factor we're about to find out a lot of companies and who's exposed. >> yeah, i mean, i think ultimately they end up getting the money back the question is, how long does it take? seems to be okay this is a stock we've talked about a number of times.

fairly high valuation. growth is slowing. it rallied hard up to the downward slope and 200-day moving average failed. it's not a stock i wanted to own before this. this just puts more hair on it i'd be staying away. >> down 3.5% biotech also getting hit 12s or of the company's deposits coming from life care and health sciences companies over 7% since yesterday, so how deep will the rippbo who's fundg biotech? we're not talking about gilead and engine we're talk at small startup vc, and this is the same train at high multiple tech and internet. it's been having a decent rally back some of this is a lot of high multiple names have had a great run. if you think about it, funding is just not there for companies

that money at one point was free we all know that story changed dramatically, but the story has changed again. >> if you're a public company and you'll probably get paid back, it's a matter of time. if you're a startup, a smaller company that relies on the funding and you don't have to it meet payroll or whatever your costs are, then you've got a problem. >> but a lot of those companies in the xbi, different to me than the ibb, don't make money. spec health care, public companies, they're there to burn cash, go out and fund the next big thing. >> it's time for the final trades >> come on >> that's fast. >> time flies when you're having one. jeff >> jeff? >> obviously a lot of damage here macy's is one of those casualties it's down back below support i think there's quite a bit more downside. >> steve >> j.p. morgan was okay with the terrible headlines today

j.p. morgan. >> courtney? >> i'm going against consensus i like the home buyers dr horton. >> i like. that thank you for joining us. i know you're work hard all day. coca-cola makes money. in this case, a company that's been growing its payouts the name you're finding in this environment. >> you always pick names i cover. >> especially when you're here. >> don't go anywhere we're going to have "options action" coming up next that's what you get from the morgan stanley client experience. you get listening more than talking, and a personalized plan built on insights and innovative technology. you get grit, vision, and the creativity to guide you through a changing world. ♪

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right now on "o.a.", the sil silicon valley bank failure. tonight we'll look at how the options market is pricing the action and what it's signaling for big banks the broad market and a lot more. plus, an economic bellwether reporting next week. fedex has had a strong run so far this year, but can it keep delivering as the consumer shows sign of slowing down the semis have been highway good place to hunk you are down. i'm sarahizen in for