PACWEST’S SHARES DROP
PacWest has faced another setback as its shares came under pressure due to a decline in deposit inflows. This caused its shares to drop by 20%, with stocks having already declined by 40% this month, and 70% for the year. Furthermore, the bank reported that its deposits dropped by 9.5% in the first week of May, primarily due to media reports about the bank searching for strategic options following its first-quarter report. However, PacWest said that it was able to manage the decline through its available liquidity of $15 billion.
DISNEY+ DISAPPOINTS
Disney’s latest quarterly results showed that the company missed earnings-per-share estimates by a penny even after implementing cost-cutting measures. Although the theme park division performed well, Disney+ subscribers fell below expectations following a recent price increase, despite efforts to push for new content. In response to this report, Disney’s stock prices fell more than 5%, and while the company’s long-term prospects remain promising, its recent struggles in the competitive streaming market have prompted investor concerns.
MICROSOFT FREEZES EMPLOYEE SALARIES
Microsoft has recently announced that it will put a hold on salary increases for its full-time employees. This decision was made to reduce costs since Microsoft’s growth in revenue has slowed down and client spending has decreased. Last year, Microsoft increased its budget for bonuses and employee stock allocations as inflation surged, however, this year’s compensation will be more typical. In addition, Microsoft’s CEO, Satya Nadella, has also stated that performance bonuses for top executives will also be significantly reduced.
OIL PRICES INCREASED
Oil prices rose for the fourth time in five sessions, with West Texas Intermediate (WTI) climbing to over $73 per barrel. This comes as a result of the recent slowdown in inflation trends in the U.S., and China’s reports of a near-zero pace of price growth. Additionally, the rise in prices was also caused by the supply disruption of wildfires in Canada and a dispute over payments between Iraq and Turkey.
INTERNATIONAL NEWS
The Bank of England (BoE) has raised its key interest rate by 0.25% to 4.5% in an attempt to control inflation. The bank does not think a recession will happen, but there are concerns that food prices are higher than expected, and analysts believe that interest rates will rise again later this year. BoE still expects inflation to fall, but not enough to meet its target until 2025. One of the aspects contributing to the UK’s inflation is its heavy reliance on imported natural gas.
