Weekend Update 5/6/2023

Weekend Update recaps market highlights and major news from Ursa’s portfolio. Not on Ursa yet? Download Ursa from the App Store!

Rate hikes may be ending while April jobs report shows no slowdown…

🏦 First Republic fails. JP Morgan acquired failed bank First Republic for $10.6B. The Fed hoped to stabilize the reemerging #BankingCrisis with the shotgun marriage. However, smaller banks’ problems still remain including liquidity issues, asset-liability mismatches and deposit outflows.

🏔 Rate hikes peaked? At its May meeting, the Fed hiked rates another 25bps, but noted any further hikes will be dependent on new data. While not official, investors betting #RisingYields has peaked, but rate cut timing expectations are mixed. Powell repeatedly reiterated #InflationFears and strong #LaborMarkets are not yet fixed.

💼 Strong April jobs. US added 253K new jobs in April topping forecasts for 180K. Meanwhile, unemployment fell to 3.4% while wages grew 0.4% M/M. While strength in the #LaborMarkets had previously been viewed as bad, investors now cheering for a soft #Recession2023 landing expecting #RisingYields has peaked.

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As of the publish date, Ursa portfolios may own JPM. These securities may cease to be portfolio holdings at some point in the future. As of the publish date, Ursa portfolios do not own FRC with no plans to open any positions in the next 5 days. Any mention of these securities is for purely informational purposes only and NOT investment advice.

The statements, opinions and analyses presented here are provided as general information. This article is the opinion of the author. Anything within this article should NOT be considered an investment recommendation or advice. See Ursa’s full disclosures here.