Noor Trends News, Technical Analysis, Educational Tools and Recommendations
Investors are absorbing the buyout of First Republic Bank at the start of a week that contains additional corporate results, a Federal Reserve policy meeting, and the eagerly anticipated monthly employment report.
The Dow futures contract was up barely 3 points at 10:45 GMT, the S&P 500 futures were mostly steady, and the Nasdaq 100 futures were down 10 points, or 0.1%.
US authorities said earlier Monday that First Republic Bank had been seized, with a deal made to sell the regional lender to JPMorgan Chase, easing market concerns about systemic risk given that this is the third major US institution to fall in two months.
JPMorgan will take over First Republic Bank’s assets, including $92 billion in deposits, but not its corporate debt or preferred shares.
In premarket trade, First Republic Bank shares fell 40%, having lost 97% of their value this year, while JPMorgan shares increased 2.4%.
The major indexes finished higher on Friday, capping up a solid month. The Dow Jones Industrial Average rose 2.5% in April, its highest month since January, while the broad-based S&P 500 climbed 1.5% and the tech-heavy Nasdaq Composite gained just 0.5%.
Helping the market post these gains have been generally better-than-feared earnings. A little over half of S&P 500 companies have reported so far, and first-quarter earnings are on track to fall 3.7% for the period, a smaller drop than the 6.7% decline previously projected by FactSet.
Ahead of this, Monday sees the release of the April ISM manufacturing PMI, which is expected to confirm that the country’s manufacturing sector remains in contraction.
Oil prices sold off sharply Monday, weighed by weak Chinese manufacturing data, which called into question the extent of the recovery at the world’s largest importer of crude from the lifting of its COVID restrictions.
Data released Sunday showed that China’s official manufacturing purchasing managers’ index slipped into contraction territory in April, surprisingly falling to 49.2 from 51.9 in March.
