Ticking Toxic Timebomb
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Welcome to May!
Hollywood writers are on strike, JPMorgan Chase bailed out a bank, and Rihanna graced the Met Gala carpet in a white gown, making us wonder if we’re caught in a time warp back to 2007 or 2008. But we checked the calendar and nope, it’s still 2023 and the economy is still on edge. Here are a few articles we’ve found helpful for understanding the major market news of the week:
- Interest rates peaked (maybe): Yesterday, the Federal Reserve raised interest rates for the tenth time in just over a year. The quarter-point rise is unwelcome news for anyone looking for a loan (as The New York Times explains), but the Fed did hint that this could be its last hike for a while. That said, in a press conference (which wasn’t a prank), Fed Chair Jerome Powell said it would still “take some time” to get inflation back down to 2% and did not completely shut the door on future increases.
- Bank fire sale: If you haven’t read all the details of JPMorgan Chase’s buyout of First Republic Bank yet, the AP breaks down what led to the fire sale. While we all hope the worst of the banking crisis is behind us, Axios explains why the banking system might feel shaky for a while.
- TFW your wallet’s empty: Treasury Secretary Janet Yellen warned the US may run out of cash to pay its bills sooner than expected (by June 1), a familiar predicament for some of us on the FWIW team. The Brookings Institution walks through the possible impacts if Congress fails to reach a deal to lift the debt limit.
- Earnings season rolls on: Pfizer and Uber both beat analyst expectations in their Q1 earnings reports — as did Ford, even though its EV business posted a huge loss. Meanwhile, big oil companies reported another quarter of strong earnings driven by climbing oil and gas production — though some shareholders are ratcheting up pressure for oil companies to set tougher climate targets, as demonstrated at BP’s annual meeting last week. (ICYMI, we have some helpful tips for reading corporate earnings reports.)
We’ve got more news below, along with some ideas for investing in a less toxic future. Until next week, may the fourth be with you!
News you can use
- It’s the season of the worker at annual company meetings, according to Bloomberg. Over 140 shareholder resolutions filed this year are employee-related, and the focus has shifted from racial equity audits and board diversity to issues like paid leave, safety, and labor rights. Amazon and Walmart will face multiple resolutions later this month, and Starbucks investors voted for a labor practices review in March. Workers are also a top priority of the American public when it comes to business behavior, according to JUST Capital.
- Fast Company is out with its latest World Changing Ideas awards. Dell Technologies tops the list for its efforts to infuse sustainability across its businesses. Alongside lots of nonprofits and startup ventures, you’ll also spot some familiar names, like Match Group and Pandora (both featured in our Investing in Love edition), Goldman Sachs, Ally Financial, and Shopify.
- Shares in Eli Lilly and Co jumped this week on the success of its Alzheimer drug trial. The pharma company’s medicine slowed cognitive and functional decline by 35% in patients. So far, only two drugs, both from Eisai and Biogen, have received accelerated FDA approval for slowing the progression of the disease that affects more than six million Americans. Meanwhile, the FDA approved the first vaccine for respiratory syncytial virus (RSV), after a surge in cases last year. Investors pushed GSK stock higher in reaction.