Markets Revert to Recent Form as Pessimism Takes Hold

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Robins Kaplan LLP

Back at it. Hope all had a great Memorial Day break.

Despite our first week of gains on the Street in a good long while, pessimism is the name of the game for most in the U.S. economy at the moment. Front and center: the many big-name businesses that rode consumer demand to an unexpectedly good 2021 who are seeing inflation and a shift to services take a bite out of their 2022 forecasts - NYTimes and WSJ and MarketWatch

Not that inflation is a uniquely American headache these days. New figures show rising prices hitting their highest level in the eurozone since its creation in 1999, “as a record run-up in energy and food prices stoked by Russia’s war in Ukraine continued to ricochet through the continent’s economy” - NYTimes and WSJ

Also, about those gains . . .  - WSJ and Bloomberg

Parts of China are at least beginning to walk back two-months of Covid lockdowns, providing some boost to hopes of improved economic performance there (and improved supply chain conditions) - APNews and NYTimes and Marketplace

President Biden put in some quality time with Fed Chair Powell on Tuesday “as part of an effort to both sell Americans on a brightening view of the economy and reassure consumers that leaders in Washington are hard at work to slow rapidly rising prices.” The White House also used the meeting to affirm its support of the Fed’s independence - NYTimes and WSJ and Bloomberg and MarketWatch

As for that independent Fed, it will start its balance-sheet shrinking experiment this month when a first swath of $15B in assets will naturally mature without the central bank reinvesting - Bloomberg and MarketWatch

Job openings in the U.S. remain at near-historic levels, according to the latest estimate from jobs site Indeed, which pegged the figure at 11.4 million through late May—a “sign employers face still-stiff competition in a tight labor market” - WSJ

The latest twist in the ongoing Spirit/Frontier/JetBlue saga includes the recommendation from Institutional Shareholder Services, a “prominent shareholder advisory firm,” that “shareholders should vote against a proposed merger with Frontier Airlines in favor of a competing offer from JetBlue Airways.” Though the JetBlue deal could bring “more regulatory scrutiny,” ISS suggested it “would offer Spirit investors more money and more choice, depending on whether they expect the recovery in travel demand to falter” - NYTimes and WSJ

German authorities raided DeutscheBank (and its DWS Group) offices this week “over allegations of greenwashing in its mutual funds, adding to pressure on the lender which is already facing a U.S. probe” into the asset manager’s “claims of sustainable investing” - WSJ

Checking in with the FTC’s antitrust probe of Amazon, where new agency chair Lina Khan (herself no stranger to the world of competition) is wasting little time in putting her own stamp on the investigation - Bloomberg

Activist bigwig Nelson Peltz is joining Unilever’s board after the former’s 1.5% stake in the latter became public news on Tuesday. That holding, worth about $1.6 billion, makes Peltz and his Trian Fund Management crew “one of Unilever’s largest shareholders” - WSJ

Senate Banking Chair Sherrod Brown has had it up to about here with Wells Fargo, including current CEO Charles Scharf - NYTimes and WSJ

Dying to get out in the world but a little wary of, well, the top 4 or 5 stories of the day? The Frugal Traveler’s got you covered - NYTimes

Stay safe,

MDR

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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