U.S. stocks continue to fall Pacwest Bank’s deposit outflow fuels anxiety | 12th Financial Tankan

5/12 (Friday) morning market trends (compared to the previous day)

traditional finance

• NY Dow: $33,309 -0.6%
• Nasdaq: $12,328 +0.1%
• Nikkei Average: ¥29,126 +0.01%
• USD/JPY: 134.4 +0.1%
• USD Index: 102 +0.5%
• 10 year US Treasury yield: 3.38 -1.4% annual yield
• Gold Futures: $2,020 -0.8%

crypto assets

• Bitcoin: $27,024 -1.8%
• Ethereum: $1,796 -2.4%

NY Dow today

Today’s NY Dow fell sharply to -221.8. The Nasdaq remained solid at +22 dollars. Last night’s April US wholesale price index (PPI) showed continued disinflation, but the sharp drop in Pacwest bank has again increased distrust of US regional banks, further worsening investor sentiment. .

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US April Wholesale Price Index

Last night’s April US wholesale price index (PPI) rose 2.3% year-on-year, below the forecast of +2.5% and the previous month’s +2.7%. It was the slowest rate of growth since early 2021 and continued to signal a slowdown in inflation.

Core PPI, which excludes food and energy, was also up 3.2% y/y, below expectations of +3.3%. The rise in prices in the service sector, such as food wholesale and healthcare-related services, appears to have been a factor.

The CPI announced on the night of the 10th also indicated signs of a slowdown in inflation, and like the PPI data this time, it seems that the content justifies the suspension of interest rate hikes at the FOMC in June.

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Number of new unemployment insurance applications

On the other hand, the number of new unemployment insurance applications in the United States last week reached the highest level since October 2021, increasing uncertainty about the future of the economy.

Specifically, it was 264,000, an increase of 22,000 from the previous week, far exceeding the forecast of 245,000. Until now, large-scale personnel reductions by major IT companies such as Microsoft and Meta have started to affect the entire labor market.

Pacwest Bank Deposit Decline

The stock price of Pacwest Bancorp, a US regional bank in financial difficulties, fell 22.7% from the previous day. A sharp 9.5% drop in deposits last week re-fueled investor fears.

The bank’s announcement last week of strategic options, including a sale and a capital increase, appears to have contributed to the outflow of customer deposits.

Meanwhile, deposits at Western Alliance Bank rose by $600 million to $49.4 billion in the week ending Friday, which was a temporary boost.

Economic data from this week onwards

• Monday, May 15, 21:30: May New York Fed Manufacturing Index
• May 18, 21:30 (Thursday): Number of continuous recipients of unemployment insurance and number of new applications for unemployment insurance for the previous week
• Friday, May 19, 24:00: Chairman Powell of the Federal Reserve Board remarks
• May 23, 22:45 (Tuesday): US May Manufacturing Purchasing Managers Index (PMI, preliminary figures)
• May 25, 3:00 (Thursday): Federal Open Market Committee (FOMC) Minutes
• May 25, 21:30 (Thursday): U.S. January-March Quarterly GDP Personal Consumption (revised value)

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US stocks

IT and tech stocks performed well, supporting the Nasdaq. Individual stocks: NVIDIA -1%, c3.ai -1.6%, Tesla +2.1%, Microsoft -0.7%, Alphabet +4.3%, Amazon +1.8%, Apple +0.1%, Meta +1.1%.

alphabet

Google, a subsidiary of Alphabet, announced on the 11th that it will start providing services in Japanese and Korean for its conversational chatbot “Bard”. In addition, the English version of Bard will be available in more than 180 countries and regions. Google is using Bard to gain market share as it competes with Microsoft’s ChatGPT.

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Virtual currency-related stocks fall

• Coinbase｜$60.3 (-3.6%/+3.6%)
• MicroStrategy | $287.3 (-8.8%/-12%)
• Marathon Digital | $8.7 (-14.5%/-17%)

Marathon Digital Holdings, a Nasdaq-listed cryptocurrency mining company, has been sued by the U.S. Securities and Exchange Commission (SEC) for violating federal securities laws in connection with a mining center in Hardin, Montana. He said he had received a second subpoena. The first subpoena was received in the third quarter of 2021, and the contents of the subpoena were not disclosed.

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