Wall Street Today | US Economy Stalls as Credit Narrows, Fed's Beige Book Says
MACRO
US Economy Stalls as Credit Narrows, Fed's Beige Book Says
The US economy stalled in recent weeks, with hiring and inflation slowing and access to credit narrowing, the Federal Reserve said in its Beige Book survey of regional business contacts.
The Beige Book likely reinforces the chances that Fed policymakers will pause their run of interest-rate hikes following an expected quarter-point increase at the next gathering May 2-3. It also may add to concerns that the economy is slipping into recession, an outcome forecast by Fed staff economists at the last policy meeting in March.
Fed's Williams Says Banking Stress Likely to Tighten Credit
"The banking system is sound and resilient," Williams said Wednesday in remarks prepared for an event organized by the Money Marketeers of New York University. "Nonetheless, these developments will likely lead to some tightening in credit conditions for households and businesses, which in turn will weigh on spending."
SECTORS
Beaten-Down Biotech Stocks Get Boost from M&A Boom, Lofty Prices
This week alone, large pharma companies logged two deals — $Merck & Co(MRK.US$'s $10.8 billion takeout of $Prometheus Biosciences(RXDX.US$ and $BELLUS Health(BLU.US$'s $2 billion sale to $GlaxoSmithKline(GSK.US$. The transactions carried premiums of 75% and 103% respectively, yielding lucrative returns for investors in the pair which have no approved products yet.
The renewed M&A appetite is a shot in the arm for the biotech industry. The $SPDR S&P Biotech ETF(XBI.US$ is up more than 8% this month, outperforming a gain of around 1% in a similar fund tracking the $S&P 500 Index(.SPX.US$.
Cathie Wood's Popular Touch Deserts Her in ARK Flows, Venture Fund
All but one US-listed ARK exchange-traded fund, the flagship $ARK Innovation ETF(ARKK.US$, have seen outflows in 2023, despite the fact that most funds have at least matched — and in some cases trounced — the performance of the S&P 500 Index, according to data compiled by Bloomberg.
COMPANY
Tesla Stock Falls 5% as Price Cuts Hit Quarterly Profit Margins
$Tesla(TSLA.US$ stock dropped more than 5% in the extended session Wednesday after the electric-vehicle maker narrowly missed quarterly expectations for its revenue and saw adjusted profit margins drop as it cut its EV prices.
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Microsoft Removes Twitter From Ad Program; Musk Threatens Suit
$Microsoft(MSFT.US$ said its social media planning and scheduling tools for advertisers will no longer support Twitter, after the Elon Musk-owned social network started charging for access to its programming interface. Musk responded to the announcement by accusing Microsoft of using Twitter data "illegally" and threatening a lawsuit.
IBM Earnings Top Estimates as Margins Expand
$IBM Corp(IBM.US$ issued stronger-than-expected first-quarter earnings on Wednesday even as the technology and consulting company reported disappointing revenue. Shares rose as much as 2% in extended trading.
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Snap Attracts 3 Million Paying Users to AI-Enhanced Service
$Snap Inc(SNAP.US$ has attracted more than 3 million users to its Snapchat+ subscription service, a $3.99-a-month offering that provided early access to features like its new artificial intelligence chatbot.
Source: Bloomberg, Dow Jones, CNBC
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