Marcus Today Pre-Market Podcast – Friday 12th May

Global stocks slumped after Disney’s results, and regional banks, such as PacWest, reported falling deposits. This decline in bank deposits has renewed concerns about the banking industry following the recent collapse of three regional lenders. US jobless claims increased, and producer prices rose modestly, suggesting a slowing economy, which led to Treasury yields dropping. Tesla shares rose by 2.1% in after-hours trading after Elon Musk announced he had found a new CEO for Twitter. Markets remain anxious as Washington struggles with raising the U.S. debt ceiling. Dow Jones down 222 points (-0.66%). Dow at worst down 404. S&P 500 down 0.17%. NASDAQ up 0.18%. VIX Volatility Index down 0.1%. In European markets Stoxx 50 +0.1%, FTSE -0.1%, CAC +0.3%, and DAX -0.4%. SPI Futures are down 8 points (-0.11%).

The number of Americans filing new claims for unemployment benefits rose to a 1.5-year high last week, pointing to cracks in the labour market as demand slows. Claims rose by 22,000 to 264,000 for the week ended May 6th, the highest reading since October 2021. Despite this, the labour market remains tight, with 1.6 job openings for every unemployed person. On the other hand, the US inflation pressures are subsiding as demand cools. Economists predict that claims in the 270,000-300,000 range would signal a deterioration in the labour market.

PacWest Bancorp plummeted 22.7% following news that its deposits fell 9.5% or US$1.5bn, after reports the bank was exploring options to bolster its finances, including a sale. Shares of PacWest and other regional lenders dropped following the FDICs announcement that ~113 of the country's largest lenders will bear the cost of replenishing the $16bn hit to its deposit insurance fund caused by recent bank failures.

HEADLINES

• ASX to slip; Wall Street fears collapse of another US bank.
• Dow, S&P 500 fall with Disney; PacWest leads regional banks lower.
• Stocks, yields fall after data seen halting more Fed rate hikes.
• European shares run out of steam by close as Bayer, energy stocks weigh.
• Disney shares fall most since Iger's return after streaming subscriber losses.
• Pfizer CEO calls US drug price plan 'negotiation with a gun to your head'.
• Hindenburg shorts Icahn Enterprises bonds as battle with billionaire heats up.
• EV maker Rivian takes bold bet with higher-priced vehicles amid heating competition.
• Big U.S. banks to pay billions to replenish failure fun.
• US weekly jobless claims hit 1-1/2-year high; inflation subsiding.
• Gold retreats as dollar gains upper hand.
• Weak China inflation data pushes copper prices to a five-month low.
• Oil falls 2% on weak US and Chinese economic data.
• OPEC holds global oil demand view steady, cites US debt ceiling risks.

ON THE CALENDAR

• Domestic data: n/a
• China Data: FDI, Current Account
• UK data: GDP Growth Rate, Manufacturing Production, Goods Trade Balance.
• US data: Import and Export Prices.

Tune in to Henry Jennings’ Pre-Market Podcast to get in the know for the day ahead.

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