The daily business briefing: May 3, 2023
Ford rebounds in 1st quarter and cuts Mach-E prices again, job openings fall for 3rd straight month, and more
Ford rebounds in 1st quarter, cuts Mach-E prices
Ford Motor on Tuesday reported $1.8 billion in first-quarter net income, reversing a $3.1 billion loss in the same period last year. The automaker rebounded after struggling with supply-chain bottlenecks as it "commanded top dollar for its pickup trucks and SUVs," The Wall Street Journal reported. For the second time in 2023, Ford slashed prices on its electric Mustang Mach-E, this time by as much as 8 percent. Ford CEO Jim Farley told analysts that by the end of the year Ford will have cut $5,000 from Mach-E costs since the vehicles launched over two years ago, allowing the company to cut the SUV's price to grab a bigger share of the market. Ford is switching to a lower-cost battery as Tesla slashes prices to protect its lead share of the EV market.
Job openings drop for 3rd straight month
U.S. job openings dropped to 9.6 million in March from 10 million in February, the third straight monthly drop, the Labor Department reported Tuesday. Layoffs increased to 1.8 million, the highest level since December 2020. The data added to signs that the labor market is softening as the Federal Reserve aggressively raises interest rates to fight inflation. Businesses, bracing for a possible recession, are desperately cut costs, often by trimming staff. Despite the changes, the job market remains tighter than normal, with 1.6 vacancies per unemployed person in March, although that's down from 1.7 in February and the lowest reading since October 2021.
Late-night shows go dark as writers' strike begins
Late-night shows will start running repeats immediately in early fallout from the Writers Guild of America strike that started Tuesday, The New York Times reported, citing several people briefed with the plans. The shows going dark include The Tonight Show Starring Jimmy Fallon, The Late Show With Stephen Colbert, Jimmy Kimmel Live!, Late Night With Seth Meyers, Comedy Central's The Daily Show, and HBO's programs hosted by John Oliver and Bill Maher. The writers are demanding more pay and a bigger share of residuals, which have fallen in recent years as TV production grew but streaming overshadowed broadcast TV. It wasn't immediately clear how long the shows would stay off the air. They gradually returned starting two months into the last strike, in 2007.
Stock futures rise slightly ahead of Fed decision
U.S. stock futures edged higher early Wednesday ahead of the Federal Reserve's next decision on raising interest rates. Futures tied to the Dow Jones Industrial Average were up 0.1 percent at 6:45 a.m. ET. S&P 500 and Nasdaq futures were up 0.2 percent. Analysts expected the Fed to raise interest rates by a quarter-point Wednesday at the close of a two-day policy meeting. Investors will be looking for clues in a post-meeting statement on when the central bank will pause the rate hikes. Wall Street had a rough day Tuesday, with all three of the main U.S. indexes dropping just over 1 percent as fears about the health of the banking sector continued after First Republic Bank collapsed and was taken over by JPMorgan.
Regional bank stocks fall as crisis continues
Regional bank shares continued to fall despite this week's First Republic rescue. Shares of PacWest, considered one of the weakest mid-sized banks, closed down 27.8 percent, its worst single-day decline since Silicon Valley Bank's implosion dragged down bank stocks on March 10. Another vulnerable bank, Western Alliance, fell 15.1 percent on Tuesday. "They are going from the weakest bank to the weakest bank. And it's not just the short sellers but it's the customers as well asking if their deposits are safe," said Chris Whalen, chair of Whalen Global Advisors, in the Financial Times. "The market is focusing on the weakest links and looking for banks that are vulnerable."