May Jobs Report May Yield Clues for Fed’s Next Rates Move

admin June 2, 2023

0 6 minutes read

What to watch out for in today’s employment report

Market futures rose today after the Senate approved a bipartisan debt-restriction deal that averted a national financial crisis. (See below for details.)

Now that investors have shifted their focus to other immediate concerns — concerns over inflation, interest rates and recession — key data on the U.S. economy are due to be released this morning at 8:30 a.m. ET.

Attention will be focused on the employment statistics for May. Hiring has slowed in recent months, but the unemployment rate is still at a 53-year low despite a wave of layoffs in the tech, media and financial sectors.

Overall, the labor market appears to be returning to pre-pandemic conditions, analysts say. “Retirements and hiring have slowed dramatically, with more layoffs than in previous years in the 2010s,” Bill Adams, chief economist at Comerica Bank, wrote in a letter to clients. said.

The main figure to watch today is 190,000. Economists say this is the number of new jobs last month Poll by Dow Jonesdown from 253,000 in April.

But it’s worth remembering that economists have consistently underestimated the strength of the labor market. over it expectation in 13 of the last 16 months. (By the way, Comerica’s forecast is below consensus, with 175,000 new jobs.)

Also pay attention to salary. Wages rose an average of 6.5% on an annualized basis last month, according to data released this week by payroll firm ADP, suggesting workers still have plenty of purchasing power and prices may remain high. ing. (Speaking of which, keep an eye out for the latest consumer price index data coming out on June 13th.)

Fed officials will look for signs that inflation is picking up again. If today’s jobs report is strong, it could affect the central bank’s interest rate policy in the second half of this year, and that uncertainty is lurking in the market.

Traders this morning said they expected a rate hike to be off the table at the FOMC meeting in two weeks. But some market watchers warn that a pause is not a trade completion.

what is going on here

The Senate passes the Debt Limitation Agreement. Lawmakers approved the deal 63-36, ending weeks of political strife days before the Treasury Department was expected to run out of money. The bill is now on the desk of President Biden. He will address the nation tonight.

House Republican leader accuses FTC chairman of ‘abuse of power’ Rep. James Comer (Kentucky), who heads the House Oversight Committee, held a press conference. Investigation of Lina Khanciting concerns about his broad approach to antitrust regulation. The survey marks the latest backlash against the Biden administration’s tougher stance on mergers and acquisitions.

The judge overseeing Disney’s case against Ron DeSantis declined himself. Judge Mark Walker of the United States District Court for the Northern District of Florida reversed course after discovering that a “third-degree relative” owned a portion of Disney stock. In April, media giants sued Florida Gov. DeSantis over a dispute over oversight of the special tax zone surrounding Disney World.

A metaprivacy lawsuit is filed. Yesterday, a judge in the District of Columbia dismissed a lawsuit against the tech giant accused of deceiving consumers by improperly sharing data with third parties. The decision is a rare one for Facebook’s parent company, which faces lawsuits and regulatory scrutiny around the world following the Cambridge Analytica privacy scandal that exposed the potential leak and spread of user data. legal victory.

Customers say it’s difficult to withdraw money from Apple’s savings account. Savers flocking to high-interest accounts managed by Goldman Sachs told The Wall Street Journal: I had a hard time moving money. That’s a blow to Apple and Goldman, which have touted the service as a new beachhead for consumer finance.

Veteran activist investor resigns

The changing of the guard that has swept Wall Street has also reached one of the most notable activist investment firms. Ed Garden resigns As Chief Investment Officer of Trian.

Garden co-founded the company in 2005. With veteran investors Nelson Peltz (father-in-law) and Peter May. Mr. Tryon has become one of the most powerful activist investors, shaking up big names like DuPont, General Electric, HJ Heinz and Procter & Gamble. Most recently, the company had a brief battle with Disney.

Mr. Garden played a key role in Tryon’s campaign. This typically involved creating a detailed whitepaper outlining the strategy changes recommended by the company. He has also served as a Trian representative on the boards of directors of GE, Family He Dollar, His Stores, Wendy’s and others. His importance was so great that some on Wall Street had long hoped that he would eventually succeed Mr. Peltz as Trian’s leader.

Trian is developing the next generation of leaders. The company has named Matt Peltz, son of Josh Frank and Nelson Peltz, as Co-Chief Information Officer (CIO), and Brian Baldwin as Head of Research. (Nelson Peltz will remain CEO and May will remain president.)

This is the latest succession planning effort on Wall Street, following recent moves by Apollo, Carlisle, KKR and others.Among activist investors, Carl Icahn brought in his son Brett back to his investment vehicle The move in 2020 saw the appointment of a young Icahn as the company’s next leader, Watchers noted.

U.S. company rules in Supreme Court

Yesterday’s two Supreme Court rulings represent corporate victories and could have significant implications for companies’ listings and responses to strike workers.

Judges unanimously dismissed shareholder lawsuits against Slack. which I sued my workplace messaging app Ahead of the direct listing in 2019, we have reduced the number of misleading investors. Investor Fiyaz Pirani said the company had not properly disclosed relevant information, including outages and competition from Microsoft’s rival platform Teams.

Slack said lawsuit should be dropped Pirani bought unregistered shares that are not subject to a prospectus under securities law. Only SEC registered shares are issued pursuant to the company’s prospectus. But in a direct listing, which replaces a traditional initial public offering, both classes of shares start trading at the same time, including shares already acquired by employees like Pirani and individual investors.

Judges dismissed Pirani’s argument that a direct listing would require a rethink of securities rules. and sent him back to lower court to prove his shares were registered. This decision limits the class of shareholders who can easily sue over misleading registrations.

Some business leaders welcomed the ruling.Paul Grewal, chief legal officer of crypto exchange Coinbase, which is in dispute with the SEC over crypto regulation discussed on twitter He said the decision “was a warning to government agencies and others that federal securities laws are not what they want and that the restrictions imposed by Congress matter.”

Courts also made it easier for employers to sue striking workers. In another case, a judge upheld a concrete company that accused workers of intentionally damaging the company during industrial action.

The 8-1 ruling overturned the Washington state court’s ruling that the loss was accidental and protected under the National Labor Relations Act. Some legal experts said the case would deter workers from going on strike.

“I started in September 2000 as CFO of a publicly traded company. So I’ve been in this job for almost 23 years in three different industries and I’ve done close to 90 earnings calls. I think that’s enough. . That’s all.”

— Vasant Prabhu, Chief Financial Officer of Visa, said: explain one’s decision to retire The credit card company said it in rare and candid terms. Prabhu, who has been CFO since 2015, announced his resignation in February after Ryan McInerney took over as CEO.

Successful deal closing

The slowdown in mergers and acquisitions that has plagued Wall Street since last year shows little sign of abating, he said. new data. And it could have further implications for traders who profit from putting those deals together.

Announced M.&A worldwide, reaching $1.07 trillion by the end of May, According to Refinitiv. This is a 42% year-on-year decrease and one of the slowest annual starts in the last decade. (The only worst year was 2020, when the pandemic started, when trading activity didn’t exceed $1 trillion.)

The number of transactions also plummeted to 21,301, a three-year low, down 14% from the same period in 2022.

All of this despite several big acquisitions announced this year, including plans for Pfizer. $43 billion acquisition Oncology experts Siegen and Numonts $19 billion bid For Newcrest, a rival miner.

Lack of deals spurs job cuts Banks like Lazard and Morgan Stanley are cutting jobs to cut costs. Goldman Sachs President John Waldron said at a press conference yesterday that his own company: Plan more cuts Senior executives such as managing directors are expected to be affected due to a “tougher environment.”

speed reading

Information of sale

policy

The Department of Defense agreed that Buy a Starlink Satellite Internet Terminal It was offered by Elon Musk’s SpaceX company for use by the Ukrainian military, months after the two countries quarreled over costs. (Bloomberg)
Massachusetts Democratic Senator Elizabeth Warren has reiterated calls for a crackdown on the crypto industry, citing data on the use of digital currencies. Chinese fentanyl producer. (insider)

best of the rest

Ella IrwinThe second person to head Twitter’s trust and safety team has stepped down since Elon Musk bought the social network. (Tech Crunch)
Separately, a new poll found that Twitter one of the worst reputations Among prominent American companies, it surpasses only Fox Corporation, FTX and the Trump Organization. (Axios)
Shareholders rejected pay packages for Netflix’s top executives in a non-binding vote after a campaign by the Writers Guild of America. (New York Times)
Stocks of C3.ai Despite investor enthusiasm for AI companies, they plunged yesterday after business software firms provided overwhelming guidance. (insider)
Can you spell the winning word for this year’s Scripps Spelling Bee correctly? Hint: A creature that lives in the sand. (New York Times)