Good morning, here’s what you need to know today…
Zuckerberg is on another spending spree; BHP wants to buy Anglo American; Biden will continue to use TikTok; and UBS is not “too big to fail”…
Treasury Yields Rise in Preparation of New GDP and PCE Data
On Tuesday, the S&P Global Flash Manufacturing PMI for the US signalled a contraction in the sector in a sign that the economy may be slowing. Q1 GDP is due to be released today and the Personal Consumption Expenditures price index is due on Friday – yields rose in anticipation. The next Fed meeting is in five days.
UBS Not TBTF
The chair of the bank said UBS is not too big to fail amid a report from the Swiss government that singled out the bank as one to strengthen its capital requirements. New legislation on increased capital requirements could reduce global competitiveness for Swiss banks.
This comes as shareholders voted to approve a change to AT1 bonds that protects them from a Credit Suisse-style wipeout. The bonds now use an equity conversion structure that triggers if capital ratios fall below a certain level, instead of writing them down.
Shares of UBS fell to a two-month low yesterday.
In Other News
- KPMG UK recalled job offers to foreign students as the government clamps down on visa rules to try to curb immigration.
- Biden’s election campaign will continue to use TikTok despite his endorsement and signing of the divest-or-ban law yesterday.
- BHP has approached Anglo American to propose a takeover that would help the Australian miner expand its portfolio of copper mines, especially in Peru and Chile.
- Citi downgraded Molson Coors Beverage Company to "sell" after they lost market share to Anheuser-Busch as the Bud Light boycott fades.
Earnings
- Lloyds Banking Group profits fell by 28% after strong competition caused mortgage rates to fall in the UK.
- Boeing reported a $355m loss in Q1, a smaller loss than analysts expected. Shares were up in the pre-market but finished down 2.87% in the session.
- Meta beat Q1 revenue and EPS targets, but shares fell 10% as their earnings crossed the wire last night due to higher-than-expected spending forecasts as Zuckerberg looks to spend big on AI infrastructure. The Street was looking for spending cuts.
Some of today’s earnings: Microsoft, Alphabet Inc., Intel Corporation, Snap Inc., BNP Paribas, Barclays