Coffee With Greta: Banks Rally, Inflation Week Begins
DJIA Futures: +82 (+0.2%)
SPX Futures: +6 (+0.1%)
NASDAQ Futures: -22 (-0.2%)
Good morning friends!
Futures are mixed as bank stocks extend Friday’s rally and traders look ahead to inflation data this week.
Let’s get right to it!
Regional Banks Extend Rebound
Regional bank stocks are rallying again today after bouncing back on Friday.
PacWest Bancorp (PACW) shares are leading the trend, up 35.2% ahead of the open.
That adds to the bank’s 81.7% gain on Friday.
PacWest slashed its dividend late Friday evening to just $0.01 per share vs $0.25 previously.
The CEO also said the bank’s businesses remain “fundamentally sound”.
Western Alliance Bancorp (WAL) shares are up 14.7% with the SPDR S&P Regional Banking ETF (KRE) up 2.5%.
Tyson Foods Drops On Surprise Loss, Lower Outlook
Tyson Foods (TSN) shares are tumbling 10% in premarket trade after reporting a surprise fiscal Q2 loss and cutting its full-year outlook.
Here’s how the meat company’s results compared to analysts’ estimates:
- Adjusted loss per share: $0.04 vs $0.79 earnings per share expected
- Revenue: $13.1 billion vs $13.6 billion expected
Tyson said beef and pork sales declined year over year while chicken and prepared foods sales rose.
The company cut its fiscal 2023 revenue outlook to between $53 billion and $54 billion vs $55 billion to $57 billion previously.
Inflation Week
Traders are gearing up for the latest inflation data later this week.
The April consumer price index will be released before the market open on Wednesday.
Then the producer price index will be released Thursday morning.
This data comes after the Fed seemed to hint last week that it was ready to pause rate hikes.
But the Fed Chair emphasized that the bank will remain data-dependent for future decisions.
Yellen’s Debt Ceiling Warning
Treasury Secretary Janet Yellen continued to call on Congress over the weekend to raise the debt ceiling.
She warned that a failure to do so would cause a “steep economic downturn” in the U.S.
Yellen said, “Our current projection is that in early June, a day will come when we’re unable to pay our bills unless Congress raises the debt ceiling, and it’s something I strongly urge Congress to do.”
She said the Treasury Department is already using “extraordinary measures” to avoid default.
President Biden has invited the House Speaker, House Minority Leader, Senate Majority Leader, and Senate Minority Leader to a meeting at the White House on Tuesday to discuss an agreement on the debt ceiling.