Earnings, earnings, earnings. This week, good news comes first and US bank stocks have been on a tear. Earnings reports lured investors back to the downtrodden shares, which has helped the sector reduce its drop this year to 13%, from as much as 29% in May. Lenders including Zions Bancorp and KeyCorp led the charge. Still, regulatory shifts and potential commercial real estate credit issues are looming, meaning there may be more bank stock woes to come.
Could this year’s tech-stock surge be at risk of sputtering? Around 170 companies in the S&P 500 Index, representing 40% of its market capitalization, are set to post results next week, including tech bellwethers Microsoft, Meta and Google parent Alphabet. The Federal Reserve will also announce its latest decision on interest rates, and Chair Jerome Powell will provide clues on whether investors were correct to wager that its expected quarter-point rate hike will be its last.
Speaking of the Fed and its inflation fight: Will there be a soft landing after all? It’s a toss-up, according to Deutsche Bank Vice Chair of Research Peter Hooper and Fannie Mae chief economist Doug Duncan. Some of the first forecasters to predict a US recession are starting to hedge their bets as inflation ebbs and the economy remains resilient.
Soft landing or not, a record-setting heat wave powered by global weather forces pummeled the world this week and relief is unlikely anytime soon. Blame the jet stream — the “meandering river of wind that encircles the globe and creates our weather,” climate scientist Jennifer Francis says. Airlines are being forced to adjust and heat-related illness is surging.
Just as climate change strains electric grids, offshore wind projects are facing an economic crisis that erased billions of dollars in planned spending this week. Three major projects were canceled by companies citing soaring costs — they would have made up more than 11% of the offshore wind fleet deployed in US and European waters.
Everyone’s favorite buzzword, AI, clogged our feeds again this week. This time, US regulators took a step toward cracking down on its use in credit decisions by lenders. The restrictions could affect everything from banks to online lenders and mortgages-servicing firms. President Biden vowed vigilance on AI safety at a White House event with big-tech executives.
On the other side, Donald Trump is making it increasingly clear what he’d change if elected president. Policies on his list include banning babies born in the US from automatically claiming citizenship, excluding transgender people from the military and swiftly ending the war in Ukraine.
Barbie, the movie built around the Mattel Inc. doll, is shaping up as a top box-office success of 2023 with a projected opening weekend of about $158 million. The film made its debut Friday and sold $22.3 million in tickets for early screenings, more than the $19.3 million garnered by Top Gun: Maverick, the highest grossing US release in 2022. The weekend is already the most talked about in cinemas this year thanks to the simultaneous release of Barbie and Universal Pictures’ Oppenheimer, a biography of the inventor of the atomic bomb. Oppenheimer brought in $10.5 million in Thursday evening previews, Universal said. Boxoffice Pro is forecasting about $64.7 million for the weekend.
Hollywood helps keep California’s massive economy humming, but the state’s more than a century of long-term population growth may be over. That’s the sobering projection by state officials after the pandemic and housing costs led to California’s first population decline in 2020. The bright spot: the state is at least expected to recoup that decline in the next decade.
Enjoy the rest of your Saturday. We’ll be back tomorrow with a look-ahead to the coming week.