What to Watch in Today’s Jobs Report

Critical Job Report

The US labor market appears to be slowing. But will the economy still be strong enough to avoid a recession, as Fed Chairman Jay Powell argues? A big issue with today’s payroll that is due to be announced in the next minute.

Employers added about 180,000 jobs last month, economists predict. If correct, these numbers would be well below Q1’s monthly average of 345,000.

Forecasters have repeatedly underestimated the strength of the post-pandemic labor market. They underperformed their payroll numbers for the 12th straight time, assuming businesses hold back on hiring because the Federal Reserve has raised borrowing rates to keep inflation in check. Instead, employers have added about 4.5 million jobs since the central bank started his March 2022 rate hike. This comes despite a wave of layoffs in the tech and retail industries and a banking crisis that has led to the failure of his three banks in the region since March. .

Another hot job number could affect the Fed’s interest rate policy. The Federal Reserve has signaled Wednesday’s rate hike will be the last one for some time, but the central bank is determined to cut inflation to its 2% target. Vanguard Chief Global Economist Joe Davis said in a report ahead of today’s report, “We are determined to keep prices down at the expense of broader macro conditions, especially as the labor market remains tight.” Stated.

Pay attention to wages. The Labor Department’s Cost of Employment Index recently showed wages rising more than expected last quarter, which could be pushing up inflation. So far, the Fed has failed to “create a slowdown in wages,” Mr. Davis said.

this is what is happening

Goldman Sachs is investigating jobs at Silicon Valley banksThe Wall Street giant revealed in a regulatory filing that officials are investigating. This includes advice given to lenders to sell large portfolios of securities at a loss. Within days he said the SVB had collapsed, creating a greater crisis for local banks.

Ed Sheeran wins lawsuit for copyright infringement. A New York federal court has ruled that Marvin Gaye’s hit “Thinking Out Loud” is not a rip-off of Marvin Gaye’s “Let’s Get It On.” The verdict is seen as a victory for songwriters who fear a surge in copycat copyright lawsuits.

New York and California investigate NFLThe state’s attorney general has launched an investigation into the league over workplace discrimination and pay inequity following The Times’ 2022 report on the league’s treatment of female employees. He said the league is working together.

Berkshire Hathaway investors flock to Omaha. Shareholders are expected to ask Warren Buffett and his lieutenants about company policy. Big bets on oil and his “favorite childauto insurer Geico said at the conglomerate’s annual investor day on Saturday. Berkshire’s stock has been broadly flat over the past year, but remains above the S&P 500.

Clarence Thomas and his wife are facing greater financial scrutiny. A Supreme Court justice did not disclose that billionaire Republican donor Harlan Crow paid school tuition for his great-nephew. ProPublica surveySeparately, The Washington Post report A conservative judicial activist arranged to pay Mr. Thomas’ wife, Ginny Thomas, for consulting services, but left her name on the papers.

Local Banks Wobble, Short Selling Spotlight

Shares of a group of high-profile regional lenders rallied in pre-market trading this morning led by PacWest and Western Alliance after crashing Thursday. But analysts warn that the cataclysm is far from over, especially as short selling continues.

Stocks of PacWest and Western Alliance plummet Even if lenders open their books and show a relatively healthy deposit base. Their finances are not a concern, analysts say. A crisis of confidence has swept the sector since the Silicon Valley Bank collapse in March, exacerbating the risk that falling stock prices could trigger bank runs.

From Wall Street to Washington, short sellers are under scrutiny. Those investors, who are profiting from the stock price declines of their target companies, made about $7 billion in 2023 betting on local banks, according to data from S3 Partners. Jim Reid, head of global fundamental credit strategy at Deutsche Bank, said in an investor note on Friday: “Another scary thing is that as attacks look increasingly speculative, The risk is becoming self-sufficient,” he wrote.

White House Press Secretary Carine Jean-Pierre told reporters on Thursday that the Biden administration was closely monitoring “short-selling pressure on sound banks.”

Wall Street wants more. Wachtell Lipton Rosen & Katz, a prominent law firm, Leading companies facing short-selling attacks Banks such as Adani Group have asked the SEC to reinstate a 2008 emergency rule that imposed a 15-day short-selling ban on banks.The company also suggested reverting Law of Ascensiona trading limit designed to limit volatile stock price declines. “A coordinated, short-term attack that puts our economy at great risk requires a swift and coordinated response by the SEC,” the company said in a statement. and, In a letter to SEC Chairman Gary Genslerthe National Bankers Association urged regulators to “consider all existing tools” to protect banks from short selling.

Gensler vowed to pay attention to market fraud. However, an SEC spokesman said the SEC is not considering measures to limit short selling.

The FDIC is reportedly seeking payment from major banks. Agencies will introduce in the next few days New pricing Bloomberg said it was meant to replenish deposit insurance funds that were depleted in March’s run on Silicon Valley and Signature banks. Banks with less than $10 billion in assets are exempt from payment.

Nelson Peltz, activist investor and CEO of Trian Fund Management, has another idea for how to replenish the fund. he told the Financial Times.

“I think DeSantis would be a great president. If he were the Republican candidate, I would strongly endorse him in 2024…but I know that just focusing on the issues that woke me up as Ground Zero wasn’t enough. Concerned.

— Peter ThielA tech mogul and prominent Republican donor, he advised Florida Gov. Ron DeSantis to campaign on economic policy, not “identity politics,” if he ran for the White House.

Apple defies the apocalyptic

Apple beat first-quarter earnings expectations on the back of soaring iPhone sales, weathering supply chain disruptions and expanding into large emerging markets.

It wasn’t all good news: It’s the second quarter in a row that revenue has declined, and the company’s third consecutive decline in a decade. But shares are up more than 2% in premarket trading after the company announced a $90 billion share buyback program and increased its dividend by 4%.

New markets and services fueled growth. Sales in the U.S. and China declined, but Apple’s finance chief Luca Maestri said growth in India, Indonesia, Latin America and the Middle East helped the company “offset macroeconomic challenges.” Told.

India is of particular interest. Apple has expanded manufacturing, opening its first retail store in the country of 1.4 billion people last month. Management said he mentioned India 20 times in a conference call with analysts, and Apple CEO Tim Cook said: called it a priority“I really feel that India is at a tipping point with a lot of people entering the middle class,” he said.

Cook said little about artificial intelligence. of Tech earnings season has been dominated by questions about how AI fits into companies’ growth plans. Compared to Microsoft and Google, Apple is less explicit about its vision for technology.Mr Cook recognized great potential But he warned that we need to be “careful and thoughtful” in how we implement AI. “And there are a lot of issues that need to be sorted out,” he added.

what next? The company is reportedly looking to diversify its supply chain away from China, and plans to unveil its much-anticipated augmented reality device at next month’s developer conference.

speed lead

bargain

• Silver Lake Reportedly Raised Its Bid Software AG After Bain Capital submitted a rival offer. (Bloomberg)

• Alibaba reportedly U.S. Initial Public Offering For e-commerce businesses outside of China. (Bloomberg)

• Toronto-Dominion Bank and First Horizon canceled the proposed $13.4 billion merger After struggling to convince regulators. (WSJ)

• Warner Bros. Discovery shares fell in premarket trading after media giant report A larger than expected quarterly loss. Good news: We expect the streaming business to be profitable by the end of the year. (CNBC)

policy

• Chief of Intelligence, Avril Haynes, warned that China and Russia are seeking to exploit US debt defaults. (C-span)

• President Biden plans to appoint Air Force Chief of Staff Gen. Charles Q. Brown Jr. as the country’s most senior military officer. (NYT)

• hedge fund billionaire Lewis Bacon Awarded $203 million in lengthy defamation lawsuit against disgraced Canadian fashion executive. (FT)

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