The daily business briefing: May 1, 2023

1. Regulators seize First Republic Bank, sell it to JPMorgan

The Federal Deposit Insurance Corporation took control of troubled First Republic Bank early Monday and accepted JPMorgan Chase's bid to buy it. Several financial institutions, including PNC Financial Services Group, put in bids before a Sunday deadline in an auction held by the FDIC, the independent agency that insures bank-customer deposits. The sale came after First Republic shares plummeted from $122.50 on March 1 to about $3 per share at the close of trading on Friday. First Republic's assets took a beating as the Federal Reserve hiked interest rates, and its financial situation worsened as customers withdrew deposits after two other mid-size lenders collapsed last month. The FDIC announced the deal hours before markets opened.

The New York Times CNN

2. Fed expected to raise interest rates again this week

The Federal Reserve is expected to raise interest rates again at a policy meeting this week, continuing its most aggressive campaign to increase borrowing costs in 40 years, The Wall Street Journal reported Monday. When the Fed's two-day meeting ends Wednesday, investors and economists will be looking for clues in comments by the central bank's leaders on whether the tightening cycle is nearing a close as the rate hikes help bring down high inflation and nudge the economy closer to a recession. "We are much closer to the end of the tightening journey than the beginning," Cleveland Fed President Loretta Mester said April 20.

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The Wall Street Journal

3. Berkshire's Munger warns U.S. banks burdened with 'bad loans'

Charlie Munger, the 99-year-old vice chairman of Berkshire Hathaway, said in an interview with the Financial Times that with property prices falling, American banks are full of "bad loans." The warning came as bank failures have shaken confidence in the financial system, and a potential commercial property crash looms. "It's not nearly as bad as it was in 2008," Munger said. "But trouble happens to banking just like trouble happens everywhere else. In the good times you get into bad habits. ... When bad times come they lose too much."

Financial Times

4. Stock futures flat after a strong April

U.S. stock futures were little changed early Monday after Wall Street's best month since January. Futures tied to the Dow Jones Industrial Average and the S&P 500 were flat at 6:30 a.m. ET. Nasdaq futures were down less than 0.1 percent. The Dow, which gained 0.8 percent on Friday, finished April up 2.5 percent. So far this earnings season, just over half of S&P 500 companies have posted first-quarter results, and about 72 percent of those companies have reported better-than-expected earnings and sales. "There was definitely a very positive surprise on the big tech earnings," said Jan Szilagyi, CEO of Toggle AI.

CNBC

5. Super Mario Bros. Movie surpasses $1 billion globally

The Super Mario Bros. Movie has become the first 2023 film to surpassed $1 billion in ticket sales at the worldwide box office. As of Sunday, it had brought in $490 million in North America and $532 million internationally. In 26 days since its release, the animated film became the fifth movie since the start of the pandemic to reach the billion-dollar landmark, after Spider-Man: No Way Home, Top Gun: Maverick, Jurassic World Dominion, and Avatar: The Way of Water. It's also the first animated film since before the pandemic to join the $1 billion club, and one of the most successful animated films in history.

Variety