MARKET WRAPS
Watch For:
Manufacturing PMI for April; ISM Report on Business Manufacturing PMI for April; Construction Spending for March; Canada Manufacturing PMI for April; earnings from Arista Networks, Global Payments, Norwegian Cruise Line, NXP Semiconductors, ON Semiconductor, Stryker, Vertex Pharmaceuticals
Most markets in Asia and Europe are closed for the May 1 holiday
Today's Headlines/Must Reads
- First Republic Bank Is Seized, Sold to JPMorgan
- Stock Market Calm Rekindles Debate Over Fed Tightening
- Big Tech's Rebound Plays to Growth-Stock Bets
- The Building Boom Is Prolonging Market Pain
- The Air Has Come Out of the Dollar
- China's Consumers Lead Recovery in April
Follow WSJ markets coverage here .
Opening Call:
Stock futures struggled for momentum on Monday after regulators seized First Republic and agreed to sell the bulk of its operations to JPMorgan.
The sale preempts a chaotic collapse of the lender that investors feared could reignite March's banking turmoil. JPMorgan shares rose 3% before the bell, while First Republic's stock fell another 35%.
Other regional bank stocks came under pressure too. PNC Financial, which had bid for First Republic over the weekend, fell 2% premarket, as did Western Alliance and PacWest Bancorp.
Other Stocks on the Move
Iveric Bio rose 18% after Japan's Astellas Pharma agreed to buy the biopharmaceutical company for about $5.9 billion. Astellas will be paying $40 a share for Iveric Bio.
Read more here .
NIO, XPeng and Li Auto are expected to report deliveries for April. U.S.-listed shares of the Chinese electric-vehicle makers were rising in premarket trading.
Week Ahead
Monday sees the start of another busy week of earnings that include figures from Apple, Ford, Advanced Micro Devices, Pfizer, CVS Health, Qualcomm and Moderna.
The economic event of the week will be the Federal Reserve policy decision on Wednesday, with futures markets overwhelmingly pricing in an increase of 0.25 percentage point in the federal-funds rate. The European Central Bank is expected to follow with the same move on Thursday.
There will also be plenty of data to parse including the April jobs report on Friday. Economists are forecasting a decline in both job openings and hiring. The forecast is for a gain of 185,000 nonfarm payrolls, down from 236,000 in March.
Forex:
Bitcoin and other cryptocurrencies were falling with traders watching the outcome of the Fed's decision this week as a catalyst for the further direction.
The 73% rally in Bitcoin prices this year has come amid expectations the Fed will be forced to loosen its policy.
Bitcoin has fallen 2.5% over the last 24 hours to $28,594. The drop marks a fall back from levels of close to $30,000 over the weekend for the largest cryptocurrency.
Read more here .
Energy:
Crude-oil futures were around 1% lower on consumer demand worries.
Goldman Sachs said worries over oil consumption can be seen in the distillates market, noting a sharp selloff from roughly $45 a barrel post-war to the mid-teens in dollars a barrel.
"Questions are being raised about global activity and demand, especially given the cyclical, and potentially leading, nature of industrial-driven distillate demand, versus the lagging and consumer-driven gasoline and petrochemical markets," Goldman Sachs said.
If demand is falling, industrial products historically have shown a drop in GDP growth also, it added.
Metals:
Cobalt prices are likely to remain depressed for at least a year or two on ample supply, UBS said.
It estimates CMOC Group has more than 15,000 metric tons of cobalt in hydroxide it can now export from its Tenke operation in Congo--about nine months' worth of that mine's production--after resolving a royalty dispute.
"We expect CMOC to be disciplined" but that supply combined with material production growth elsewhere should more than outweigh solid demand growth ahead, UBS said.
For stock exposure, UBS "prefers [Glencore] vs CMOC as it is more diversified, though CMOC is cheap/growing."
TODAY'S TOP HEADLINES
First Republic Bank Is Seized, Sold to JPMorgan in Second-Largest U.S. Bank Failure
Regulators seized First Republic Bank and struck a deal to sell the bulk of its operations to JPMorgan Chase & Co., heading off a chaotic collapse that threatened to reignite the recent banking crisis.
JPMorgan said it will assume all of First Republic's $92 billion in deposits-insured and uninsured. It is also buying most of the bank's assets, including about $173 billion in loans and $30 billion in securities.
Astellas Pharma to Buy Iveric Bio for About $5.9B
Astellas Pharma Inc. said Monday that it agreed to acquire Iveric bio Inc. for about $5.9 billion to strengthen its capabilities in the ophthalmology field.
The Japanese drugmaker said it would fund the planned acquisition with about 800 billion yen of bank loans and commercial papers, in addition to existing cash on hand, and that it expected to repay new debt within the next five to seven years.
SoftBank's Arm confidentially files for massive IPO
Arm Ltd., the British chip maker owned by Japan's SoftBank Group Corp., confidentially filed for its long-awaited initial public offering over the weekend.
Arm said Saturday that it submitted a draft registration statement for its IPO with the U.S. Securities and Exchange Commission, but did not reveal its size or price range.
Revlon Taps New Directors as Lenders Take Control in Bankruptcy
Revlon Inc. will emerge from bankruptcy under new ownership and a new board of directors that includes former executives from Bloomin' Brands Inc., Sephora and Walgreens Boots Alliance Inc.
The reorganized beauty products company's new board was selected by Glendon Capital Management LP, King Street Capital Management LP, Angelo Gordon & Co. and Nut Tree Capital Management LP, lenders to the business that are taking control in chapter 11.
Starbucks, Ford, Apple Lead Another Busy Earnings Week
Apple Inc., Marriott International Inc. and Starbucks Corp. are among the companies that will report quarterly results in coming days, offering a closer look at consumer spending habits in a slowing economy.
Ride-hailing company Uber Technologies Inc., auto maker Ford Motor Co. and pharmacy chain CVS Health Corp. are also scheduled to report, as consumers face steady price increases and inflation shows few signs of retreating.
Jack Dorsey Criticizes Sale of Twitter to Elon Musk
Elon Musk hasn't proved himself to be the best leader for Twitter, according to co-founder Jack Dorsey, who said "it all went south" when the company was sold to the billionaire.
Mr. Dorsey shared his opinion Friday in a series of posts on Bluesky, a social-media platform some have touted as a possible alternative to Twitter.
'The Super Mario Bros. Movie' Becomes the First Billion-Dollar-Plus Film of 2023
"The Super Mario Bros. Movie" surpassed $1 billion in estimated global box-office receipts on Sunday, the first movie to do so in 2023, according to research firm Comscore.
Through Sunday the film has grossed $490 million domestically and $532 million internationally. Only five films have crossed the billion-dollar mark since the onset of the pandemic, according to Box Office Mojo: "Avatar: The Way of Water," "Spider-Man: No Way Home," "Top Gun: Maverick" and "Jurassic World: Dominion."
Hollywood Braces for Potential Writers' Strike Spurred by Shift to Streaming
Hollywood is running out of time to script a happy ending.
The entertainment industry's writers and the major networks, streamers and studios are struggling to agree on their next contract. If a deal isn't reached by the end of Monday, the writers are expected to go on strike for only the second time in four decades.
Indeed's Price Changes Leave Small Businesses Feeling Burned
The largest job-search site has run afoul of the small-business community.
Indeed.com began changing how it charged employers for connecting them with job seekers, pitching the shift as better for small businesses because they could choose which applications to review and pay only for the ones they liked. Instead it created confusion and unexpected costs for many business owners, and now the company is trying to minimize the fallout.
EY Breakup Plan Is Really Dead
When Ernst & Young dropped its breakup plan, the firm's executives said they remained committed to achieving the split. Since then, it has become clear that the effort is dead, at least for the next few years, according to internal webcasts and people familiar with the matter.
Leaders of EY's dominant U.S. and U.K. operations are focused on repairing the damage from the 18-month effort to split the firm's auditing and consulting operations, known as Project Everest.
Elon Musk Expects SpaceX to Spend Around $2 Billion on Starship Rocket This Year
SpaceX anticipates spending about $2 billion on its Starship rocket program this year and might not need to raise additional outside funding as that work unfolds, according to founder and Chief Executive Elon Musk.
Mr. Musk outlined SpaceX's plans Saturday during an audio chat on Twitter about Starship, the powerful rocket the company launched for the first time earlier in April. The inaugural test mission ended after about four minutes when a flight-termination system on the vehicle destroyed it as the rocket began to tumble.
Exxon's Canadian Affiliate Struggles With Oil Sands Wastewater Leak
TORONTO-Exxon Mobil Corp.'s Canadian affiliate, Imperial Oil Ltd., is struggling to contain the environmental and social effects of a continuing leak of toxic wastewater at one of its projects in the oil sands of western Canada.
The full extent of the leak went unreported to nearby indigenous communities and Canada's federal government for nine months, according to indigenous leaders, Imperial Oil and government officials.
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05-01-23 0608ET
