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☆ From teachers to waiters: The industries that haven’t bounced back from the pandemic
▼ + stars: | 2023-06-03 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +3 min

At the height of the pandemic, leisure and hospitality workers suffered the most layoffs across all industries as venues shuttered during lockdowns. Many of these workers found jobs working remotely for call centers and have stuck with the jobs ever since, he added. But within that industry, the bulk of the worker shortage is coming from public school teachers. There were 118,000 fewer public school teachers across the country last month compared to February 2020, according to Bureau of Labor Statistics data. Despite the shortage, public education jobs were much slower to raise wages than other industries, likely due to state and local budget constraints.

Persons: it’s, Jim McCoy, “, ” McCoy, “ We’re, that’s Organizations: New, New York CNN, Employers, Industries, of Labor Statistics, CNN Locations: New York, lockdowns

☆ The Senate just passed the debt ceiling bill. Here’s what happens next
▼ + stars: | 2023-06-02 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +4 min

Since the debt ceiling was breached in mid-January, the Treasury Department has not been able to borrow more money. What happens once the debt ceiling is raisedBy law, the Treasury Department is obligated to make any funds that were affected by the extraordinary measures whole. Unlike Treasury bill auctions that occur on a weekly and monthly basis, cash management bill auctions are irregular, though not uncommon. Over the past 25 years, the Treasury held six one-day cash management bill auctions. In turn, investors may opt to buy more Treasury bills instead of stocks, potentially sucking some liquidity out of the market.

Persons: Joe Biden, States ’, They’re, wasn’t, Biden Organizations: New, New York CNN, US Department of, Treasury, Treasury Department, Civil, Disability Fund, Postal Service, Congressional, CBO Locations: New York, States, United States

☆ Premarket stocks: The uber-wealthy are doing just fine and Wall Street is cashing in
▼ + stars: | 2023-06-02 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +7 min

But that’s not the case for everyone: The ultra-wealthy are doing just fine, and Wall Street firms are taking advantage of that. Germany, the largest economy in Europe, has slipped into recession as energy price shocks took their toll on consumer spending. In the past 10 weeks, JPMorgan Global Wealth Management opened 40,000 new accounts. Last year, it added around one new client with assets of $100 million or more per day, Mary Erdoes, head of asset and wealth management at the bank, told investors last week. Dollar General customers turn to food banksDollar General (DG) stock had one of its worst days ever on Thursday.

Persons: New York CNN —, that’s, JPMorgan Chase, Andy Cohen, Mary Erdoes, It’s, Goldman Sachs, Louis Vuitton, Dom Pérignon, Dior, Huw Roberts, Hermes —, Roberts, ”, Erwan, “, Gregory Daco, Allison Morrow, Jeff Owen, Owen, Cash, They’re, Elisabeth Buchwald, Treasury hasn’t, Biden Organizations: CNN Business, Bell, New York CNN, Wall, JPMorgan, Bloomberg, JPMorgan Global Wealth Management, Citigroup, International Monetary Fund, Lamborghini, HSBC, EY, Dollar, Treasury, US Treasury Locations: New York, China, United States, Germany, Europe, BlackRock

☆ Desperate for cash, the Treasury will sell one-day bills
▼ + stars: | 2023-06-01 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +3 min

Cash management bills mature in a relatively short time frame, ranging from a few days to a year, according to the Treasury. Unlike Treasury bill auctions that occur on a weekly and monthly basis, cash management bill auctions are irregular, though not uncommon. Over the past 25 years, the Treasury held six one-day cash management bill auctions. Yields on cash management bills, which are determined by the auction process, tend to be higher than regular fixed maturity bills. On Thursday, the Treasury auctioned $25 billion of three-day cash management bills yielding 6.15%.

Persons: Treasury hasn’t, Janet Yellen, Kevin McCarthy, Joe Biden, Biden, Cash, They’re, ”, Charlie Ripley Organizations: CNN, Treasury Department, Treasury, Senate, Allianz Investment Management

The athleisure retailer said its net revenue rose by 24% to $2 billion between the first quarter of 2022 and the first quarter of 2023. The company performed particularly well with its international customers: sales rose 60% year-over-year outside of North America. Shares of Lululemon rose 13% in after-hours trading. The retailer raised its expectations for net revenue in 2023 to between $9.4 billion and $9.5 billion, representing 17% sales growth. Meanwhile, Home Depot reported steep sales and revenue declines after three years of robust growth

Persons: Lululemon, Calvin McDonald, Fitch Organizations: CNN, Abercrombie, Home Depot Locations: China, North America

Analysts say the proposed debt ceiling deal could have only marginal effects on the US economy. "The impacts will be negative but small," Mark Zandi, chief economist at Moody's Analytics, told CNN. Here's what's in the proposed deal and how it would show up in the broader economy:What's in the deal? It would keep non-defense spending relatively flat in fiscal 2024 and then set a cap of 1% in spending increases for fiscal 2025. The debt deal and GDP.

Persons: Mark Zandi, Goldman Sachs, Ian Shepherdson, Gregory Daco Organizations: Moody's, CNN, Internal Revenue Service, Pantheon, Bureau of Labor Statistics Locations: West Virginia

☆ The debt ceiling drama may feel like it’s over, but it may have only just begun
▼ + stars: | 2023-05-31 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +4 min

There could be an even more dramatic second act to the debt ceiling drama. This time around, one of the top credit rating agencies, Fitch, has already placed US debt on rating watch negative. As of Wednesday, the other two major sovereign debt credit rating agencies, S&P and Moody’s, have not placed US debt under review. If Fitch downgrades US debt, it could cause yields on Treasury notes to spike, underscoring the increased risks associated with holding US debt. However, the opposite occurred after S&P downgraded US debt in 2011 — investors shrugged it off and bought more bonds, sending yields lower.

Persons: Joe Biden, Kevin McCarthy, Biden, It’s, Fitch, McCarthy, Chip Somodevilla, Michael Reynolds, ”, George Catrambone Organizations: New, New York CNN, Senate, AAA, US Treasury, U.S . Department of Treasury, Treasury Department, DWS, Treasury Locations: New York, States, US, Washington ,, Americas

☆ Don’t expect the stock markets to rejoice about the debt ceiling deal
▼ + stars: | 2023-05-28 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +3 min

New York CNN —You’d expect the stock market to surge after the White House and House Republicans reached a tentative deal to raise the debt ceiling, But markets may have other plans. The stock market, for the most part, has been ignoring the serious risks associated with the United States defaulting on its debt. Even if Congress passes a bill to raise the debt ceiling and President Joe Biden signs it, it could take months before stocks and other financial markets move on. That will temporarily suck some liquidity out of the stock market, he said. A look back at the 2011 debt ceiling crisisIn 2011, lawmakers came to an agreement on raising the debt limit just hours before the United States would have defaulted.

CNN —One of the most prominent Latino advocacy groups in the United States is urging people to avoid traveling to Florida ahead of a new immigration law that’s set to go into effect in July. Ron DeSantis’ expected presidential bid announcement, he signed a law last week requiring employers with more than 25 employees to check their immigration status using a federal database known as E-Verify. Employers who don’t comply with the law face fines of $1,000 per day until they provide proof that their workers are legal citizens. People who transport undocumented people living in the United States could face steep fines and possible imprisonment. “Laws like this, that do nothing more than harass immigrants, are bad for a state’s economy.” said Lydia Guzmán, who leads LULAC’s immigration committee, on Wednesday.

☆ Lawmakers are infuriated with Fed's inaction in its insider trading investigation
▼ + stars: | 2023-05-17 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +2 min

CNN —Congressional lawmakers grilled Federal Reserve Inspector General Mark Bialek Wednesday over possible insider trading among Fed officials in 2020, accusing the nation’s central bank of inaction. The heads of the Boston and Dallas Federal Reserve banks retired early in 2021 after trades they made before and during the pandemic came to light. Bialek told lawmakers there was no conflict of interest and that he was still able to conduct fair, independent investigations. This is not acceptable.”The Office of Inspector General declined to comment Wednesday night. A separate Fed investigation into SVB’s collapse, not involving Bialek, faulted Fed supervisors.

☆ How to protect your investments in the debt ceiling standoff
▼ + stars: | 2023-05-17 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +5 min

But even if that’s the case, between now and then bond investors should expect volatility. Bond investors are all about pricing in the risk that they may not be paid back on debt they buy — either on time or at all. But the lack of a deal to raise lawmakers’ self-imposed debt ceiling so close to the X-date is introducing unwanted risk into each investor’s calculus. “We’ve already seen some pricing stress around short-term bills, Treasury bills, and a little bit of change in the… sovereign credit default swap spreads,” said Gary Gensler, chair of the Securities and Exchange Commission, at an event on Monday. Right now, yields on one-month T bills are well above the yields for 10-year and 30-year Treasury bonds.

U.S. Treasury Secretary Janet Yellen during a news conference at the Treasury Department in Washington on April 11. (Elizabeth Frantz/Reuters)It’s still likely that the US could default on its obligations early next month – possibly as soon as June 1 – if Congress doesn’t act, Treasury Secretary Janet Yellen reiterated Monday. President Joe Biden is expected to meet again on Tuesday with House Speaker Kevin McCarthy and other top congressional leaders. Still, the actual date could be a number of days or weeks later, depending on how much revenue the federal government collects and how much it has to pay out in coming weeks, Yellen said. Yellen once again urged Congress to act as soon as possible, noting that Treasury’s borrowing costs have increased substantially for securities maturing in early June.

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☆ Argentina raises interest rate to 97% as it struggles to tackle inflation
▼ + stars: | 2023-05-15 | by ( Stefano Pozzebon | ) edition.cnn.com time to read: +2 min

CNN —The Central Bank of Argentina raised its key interest rate Monday by six percentage points to 97% in an effort to tackle soaring inflation that has reached 30-year highs. Central banks across the globe are struggling to rein in inflation, but it’s a particular problem in Argentina, where the annual inflation rate soared above 100% last month. (By comparison, inflation hovers below 5% in the US, where the central bank has raised key interest rates by five percentage points over 14 months.) Argentina’s central bank is also hoping the rate hike will incentivize investments in the country’s currency, according to the central bank’s statement released Monday. “When a central bank raises the interest rate, the effects are felt some two or three months afterward, and that timescale is not effective in Argentina’s situation.”— Elisabeth Buchwald contributed reporting.

☆ Day care, margarine, car repairs: Here’s what’s costing Americans the most
▼ + stars: | 2023-05-11 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +2 min

New York CNN —Annual inflation unexpectedly declined to 4.9% last month, according to the April Consumer Price Index report, released Wednesday. Here are some of the notable price hikes Americans are confronting:MargarineCosting almost 24% more than last year, margarine earned the top prize for the biggest annual increase last month. The CarMD report found that the increase in repair costs isn’t coming from labor costs, which were down slightly last year. Day care and preschoolThe cost of sending your child to day care or preschool is up 7% compared to last year, the largest annual increase recorded, according to April’s CPI. Child care centers are seeing increased demand after more workers are being called back to work in person.

☆ Inflation is cooling — but many items aren’t cheaper. Here’s why
▼ + stars: | 2023-05-10 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +4 min

Instead, the pace of price increases slowed from a year ago. But they may be suffering from even bigger price increases for margarine, which was up 24%. Poorer households spend a greater portion of their income on unavoidable expenses like food and gas, which makes them more vulnerable to price increases. Not everything is responding well to interest rate hikesThe Federal Reserve spent the past year hiking interest rates in the interest of lowering inflation. When the Fed raises interest rates, it costs more for banks and other lenders to borrow money.

☆ Jobs report: Who’s hiring and who’s firing?
▼ + stars: | 2023-05-06 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +2 min

Instead, the latest jobs report showed the unemployment rate fell to 3.4% in April after 253,000 jobs were added last month. But hiring isn’t strong across the board, and is concentrated in a handful of industries. Professional and business services, which include a wide range of jobs such as accountants, lawyers and engineers, added 43,000 jobs, the biggest gain across all industries. Where workers got laid offEven though the jobs report showed a net positive gain, there were some sizable layoffs. Transit and passenger service jobs include people who work within mass transit system as well as taxi and school bus drivers.

☆ Read this to understand what Fed Chair Powell said today
▼ + stars: | 2023-05-03 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +5 min

Recap: What’s been happening at the FedSince last March, the Fed hiked interest rates ten times (the tenth happened today). Because of that, lenders have to charge higher interest rates on credit cards, mortgages and loans. It’s essentially the same deal with interest rates. But to the Fed’s credit, that’s much better than last year when prices were 8.3% higher than a year prior. Part of that goes back to the Fed’s interest rate hikes.

☆ Why the Fed will likely raise rates two days after First Republic failed
▼ + stars: | 2023-05-02 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +3 min

New York CNN —For the second time this year, the Federal Reserve is gearing up to raise interest rates right after a bank failure. When the Fed raises interest rates, banks need to raise the rates on their savings accounts in order to lure in depositors from their competitors. Why, then, is the Fed likely to raise interest rates on Wednesday? Fed wants to avoid ‘stop-and-go’ rate hikesThe Fed is raising interest rates to lower inflation. In the 1970s and early 1980s, the Fed flip-flopped between raising interest rates to get inflation under control and lowering rates to spur economic activity.

☆ FDIC calls for higher deposit insurance cap after bank failures
▼ + stars: | 2023-05-01 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +2 min

New York CNN —The Federal Deposit Insurance Corporation is advocating for an increase in the deposit insurance limit for business payment accounts following the three recent bank failures. It also provided temporary unlimited deposit insurance to non-interest bearing accounts in the wake of the Great Recession. The agency’s proposal, outlined in a report it released Monday, did not specify what it thinks would be an appropriate increased level of deposit insurance for business payment accounts. The FDIC considered two other deposit insurance reforms: raising the insurance cap across all bank accounts, and extending unlimited deposit insurance to all accounts. Increasing the insurance cap on business payment accounts would likely result in increasing the premiums that banks pay to the FDIC.

☆ Signature Bank failed because of ‘poor management,’ FDIC report finds
▼ + stars: | 2023-04-28 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +2 min

New York CNN —The collapse of Signature Bank was due to “poor management,” according to a report from the Federal Deposit Insurance Corporation released Friday. Bank management “did not always heed FDIC examiner concerns, and was not always responsive or timely in addressing FDIC supervisory recommendations,” the report said. Contagion effects from Silicon Valley Bank’s failure and Silvergate Bank’s self-liquidation, which occurred just days before Signature Bank was forced to close, helped ignite the run on deposits, the FDIC report stated. In particular, bank management did not fully understand the risks associated with accepting crypto deposits, which comprised more than 20% of its total deposits, the FDIC report said. The FDIC led the investigation into Signature Bank, a New York state-charted bank, since it was the primary regulator.

☆ Here’s what the SVB report will (and won’t) include, according to top former Fed official
▼ + stars: | 2023-04-27 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +5 min

Randal Quarles, former vice chair of supervision at the Fed, told CNN in an exclusive interview that he doesn’t expect the report to uncover any smoking guns. For instance, SVB was able to opt out of holding capital against its unrealized investment losses. Cole Burston/Bloomberg/Getty ImagesIn Quarles’ view, returning to the pre-2019 requirements “would not have made any difference” in preventing SVB from failing. The real issue that the Fed’s report should address, he said, is why SVB’s uninsured depositors were so quick to flee. That’s why Quarles said he didn’t hear about the red flags Fed officials identified when he was vice chair for supervision.

☆ Banks ‘aren’t out of the woods’ after the collapse of SVB and Signature
▼ + stars: | 2023-04-25 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +4 min

New York CNN —A month ago, code blue sirens went off at banks across the globe after the collapse of Silicon Valley Bank and Signature Bank. For now, looking at banks’ deposits may lead you to believe that banks are in better shape than they are, but they “are not out of the woods just yet,” said Ana Arsov, managing director at Moody’s. After the collapse of SVB and Signature Bank, record levels of deposits poured into Bank of America, JPMorgan Chase and Citibank from mid-size and regional banks. A sign is posted on the exterior of a First Republic Bank office on March 16, 2023 in San Francisco. And the Fed’s likely rate hikes at its upcoming meetings will lead to more deposit outflows, said Wolfe.

☆ Premarket stocks: Is Big Oil running out of gas?
▼ + stars: | 2023-04-21 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +7 min

New York CNN —Oil and gas stocks have been on a two-year tear, ripping ahead as natural gas prices surged due to supply chain kinks, a strong economy, and Russia’s invasion of Ukraine. What’s happening: Brutally high oil and gas prices were the talk of the town last year and one of the largest contributing factors to sky-high inflation. That’s bad news for automobile drivers, but ended up being great for the energy industry as oil prices and energy stocks are closely interlinked. Blackstone is feeling the commercial real estate slumpThe ongoing commercial real estate slowdown has a new victim: Blackstone. Profits from the sale of commercial real estate assets fell 54% to $4.4 billion, down from $9.5 billion last year.

☆ Markets are starting to get worried about US debt default
▼ + stars: | 2023-04-20 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +3 min

But that’s starting to change, in what is shaping up to be a nail-biting game of debt ceiling squabbling as the shot clock is winding down. When the debt ceiling was breached in January, five-year CDS spreads hovered around 35 basis points. How does this compare to the 2011 debt ceiling debacle? In 2011 a debt ceiling standoff led to credit-rating agency Standard and Poor’s downgrade of US debt from the highest possible status, AAA, to AA+. After that occurred, the cost of insuring against US debt for a year jumped to 63 basis points.

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