Coffee With Greta: Debt Ceiling Crisis Looms
DJIA Futures: +124 (+0.4%)
SPX Futures: +14 (+0.3%)
NASDAQ Futures: +26 (+0.2%)
Good morning friends!
Futures are higher as regional bank stocks attempt to rebound.
Let’s get right to it!
Debt Ceiling Meeting Delayed
A meeting on the debt ceiling originally slated for today has been pushed to early next week.
President Biden was set to host the big four Congressional leaders at the White House today for the second round of talks this week.
But sources say the meeting has now been pushed to next week.
This comes after negotiations on Tuesday failed to make any progress.
House Speaker Kevin McCarthy is demanding spending cuts in exchange for a debt ceiling hike while Democrats says that’s a non-starter.
Sources told NBC that the delay in today’s meeting is a positive sign.
They said, “Meetings are progressing. Staff is continuing to meet and it wasn’t the right moment to bring it back to principals.”
Treasury Secretary Janet Yellen says the U.S. will run out of money as early as June 1.
Regional Bank Bounce Back
Regional bank stocks are rebounding today after tumbling again on Thursday.
PacWest Bancorp (PACW) shares are up 0.4% in premarket trade after plunging 22.7% on Thursday.
The SPDR S&P Regional Banking ETF (KRE) is up 0.7%.
Regional banks have seen extreme volatility in recent weeks as traders wonder which might be the next to fail.
Tesla Jumps After Musk’s Twitter CEO Announcement
Tesla (TSLA) shares are up 2.3% ahead of the open after CEO Elon Musk said in a tweet that he has hired a new CEO for Twitter.
Musk said, “Excited to announced that I’ve hired a new CEO for X/Twitter. She will be starting in ~6 weeks! My role will transition to being exec chair & CTO, overseeing product, software & sysops.”
The news is good for Tesla shareholders who have previously felt like Twitter is a distraction for Musk.
In April, a group of shareholders publicly called for Tesla’s board to ensure he would dedicate more time to the electric vehicle company.
Import Prices Jump
U.S. import prices rose more than expected in April.
The Bureau of Labor Statistics’ import price index rose 0.4% vs 0.3% expected.
It was the first monthly increase of 2023 but prices were still down 4.8% annually.
Imported fuel prices jumped 4.5% last month, the first increase since June 2022.
Import prices excluding fuel were flat.
Export prices also rose 0.2% in April but were down 5.9% year over year.
In Case You Missed It
- Peloton (PTON) shares tumbled 8.9% on Thursday after 2.2 million of its fitness bikes were recalled in the U.S. The Consumer Product Safety Commission issued the recall over injury and fall concerns. The CPSC claims the seat post on the Model Number PL01 bikes can detach and break unexpectedly during use. Peloton has reportedly received 25 reports of unexpected breakages since January 2018, including 12 reported injuries.