Macro
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| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
|---|---|---|---|---|---|---|---|---|---|---|---|
| +0.25 | +0.30 | +0.30 | +0.06 | +0.13 | +0.20 | +0.15 | -0.30 | -0.11 | -0.05 | +0.10 | +0.20 |
The Asian crisis metastasized into Russia's August default and the LTCM near-collapse, a systemic scare that blew out credit spreads and threatened counterparty banks, sending the Dow down 512 in a day.
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Citicorp and Travelers Group agreed to combine in what was then the largest corporate merger in history, creating Citigroup and uniting commercial banking with insurance and securities businesses. The deal effectively tested the limits of Glass-Steagall separations between banking and other financial services. It helped spur the eventual legislative repeal of Glass-Steagall the following year.
NationsBank agreed to acquire BankAmerica in a roughly $60 billion stock deal, creating the first coast-to-coast bank in the United States under the Bank of America name. The merger capped a decade of interstate banking deregulation. It was among the largest bank mergers completed during the era's consolidation wave.
In September 1998, the Federal Reserve facilitated a $3.6 billion private-sector rescue of highly leveraged hedge fund Long-Term Capital Management (LTCM) by 14 creditor banks to prevent a disorderly fire sale. Though the Fed did not use public funds, it intervened due to systemic risks posed by LTCM's massive derivatives positions and global market linkages. The event highlighted vulnerabilities in financial markets and raised calls for better mechanisms to manage failing institutions.