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U.S. PPI, Disney+ subscribers flee, Yellen's new warning - what's moving markets

Published 05/11/2023, 05:10 AM
Updated 05/11/2023, 05:59 AM
© Reuters.

Investing.com -- A new batch of economic data offers an additional view of the U.S. inflation picture. Meanwhile, Disney's flagship streaming service is hit by an exodus of subscribers and U.S. Treasury Secretary Janet Yellen issues another warning about the debt ceiling standoff.

1. Futures steady ahead of fresh inflation and labor market data

U.S. stock futures pointed slightly higher on Thursday, but hovered around the flatline, with investors looking ahead to the release of new data that should provide more detail into the state of inflation in the world's largest economy.

At 05:15 ET (09:15 GMT), the Dow futures contract was up 37 points or 0.11%, S&P 500 futures traded 12 points or 0.30% higher, and Nasdaq 100 futures gained 45 points or 0.34%.

The main indices registered a mixed close on Wednesday after data showed that U.S. consumer price growth eased marginally in April, but was still well above the Federal Reserve's 2% target. However, the slowing helped bolster expectations that the Fed would push pause on a long-running interest rate hiking cycle at its next policy meeting in June.

More clarity on the outlook for inflation is expected later today in the form of the latest producer price index (see below). Fresh weekly jobless claims numbers may also give a glimpse into another area of concern for the Fed: the strength of the U.S. labor market.

2. Investors eye PPI

Economists project that the producer price index - a measure of inflation at the wholesale level - will show a month-on-month uptick of 0.3% in April, up from a surprise decline of 0.5% in March.

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But on an annual basis, the index is expected to rise 2.4%, cooling from the prior month, when the gauge slowed to its smallest year-on-year increase since January 2021.

Should this forecast come to pass, it could add more credence to the emerging narrative that the Fed can afford to halt (even if temporarily) its aggressive policy tightening campaign.

3. BoE stares down stubborn inflation

Across the pond, the Bank of England is holding its latest policy-setting meeting, with policymakers expected to sign off on a 12th consecutive hike in borrowing costs.

Economists widely tip the BoE to hike rates by a further 25 basis points, following in the footsteps of both the Fed and the European Central Bank.

The projections would bring interest rates in the U.K. up to their highest level since 2008, as the BoE desperately attempts to bring sky-high price growth back down to Earth. The consumer price index in the country jumped by an annualized rate of 10.1% in March, above any other major economy, although the BoE anticipates that inflation will decelerate sharply by the end of the year.

4. Subscribers ditch Disney+

Walt Disney Company (NYSE:DIS) shares slipped by more than 5% in premarket trading after the entertainment giant reported its largest ever quarterly drop in subscribers to its flagship Disney+ streaming service.

Four million customers left the service in the January to March period, bringing total subscribers down to 157.8 million. The loss of the rights to stream Indian Premier League cricket games was cited as one of the main reasons for the defections.

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Price hikes also convinced subscribers to ditch the service, although the move helped Disney+ generate a three-month loss of $659 million which was an improvement from the $1 billion decline registered in the prior quarter.

Analysts fretted over what the exodus could mean for the division's ability to post a profit in the face of fierce competition from rivals like Netflix (NASDAQ:NFLX) and Amazon (NASDAQ:AMZN).

5. Yellen warns of the "unthinkable"

U.S. Treasury Secretary Janet Yellen has issued yet another dire warning about what awaits the country if lawmakers fail to reach an agreement to lift the $31.4 trillion borrowing limit.

Speaking in Japan ahead of a meeting of G7 finance ministers, Yellen said a U.S. default on its debt obligations could lead to "dreadful consequences" that would damage Washington's leadership credentials and impact the global economy.

"I think it should be regarded by everyone as unthinkable," she added.

Despite Yellen's sentiments, U.S. President Joe Biden and Republican leaders in Congress appear no closer to ending their standoff, with both sides at odds over federal spending plans.

Latest comments

The main reason Disney is losing subscribers is because people are sick of the mental illness parading as transgenderism and the sick grooming of children. The Left is indeed evil
Instead of watching pedos on tv i just sit on front porch it’s cheaper
danil
Someone needa to tell Yellen and her ilk that reducing spending would also solve the debt ceiling problem. Kinda just like everyone else has to do when they need to pay off their credit cards.
Disney+, Hulu and ESPN+ at $12.99 is a bargain and one of the lowest streaming rates out there for the breadth of content beyond movies and series.
sure. if you like mentally ill agendas being shoved down your throat
Disney lost the rights broadcast the Indian Premier sports cricket league fames. It is like not being able to broadcast NFL games.
Gender agenda is getting out of hands on every streaming. That's why people are leaving.
Yep, they want to groom kids and are paying the price. I hope every single on of the disney employees rots on the streets
Families left cuz they are pushing gay ideologies and putting it in every kids movie
fun to see the woke go broke
unemployment rise?
Hopefully the Peedddo company goes bankrupt.
the boy who cried wolf
pedoland
Disney- 🤭👏👏
Janet Yellen thought inflation was transitory. Ignore her.
Wolf, Wolf, Wolf. Default already. Has already been done in late 70's. A good default for a couple weeks will get BoBo's attention real quick, and will accomplish in a few days what Jerome has been attempting to do for over a year. All smoke and mirrors, when dust clears printers fired back up and imaginary fiat passed all around...again. So sick of these reruns.
never been a default. the debt has always been paid in some form. check your facts Door Matt
US defaulted on its obligations to exchange gold for USD bills (dollars used to be backed by gold you see and the bills were like an IOU for gold). US did not make whole the people left holding paper IOU slips. USD holders wanted to return them to get their valuable gold. US said no. DEFAULT!
 Stop posting about things you are not skooled in. US defaulted on a Series of tranches of  treasuries in April of 1979, roughly $120Million+ during the Carter ~ AKA First BoBo Administration.
Anyone who uses the term woke on a regular basis is a delusional tar[). I think we can all agree on that.
anyone who uses Trump daily in posts is completely delusional
Can Yellen do anything besides yell “the sky is falling”. What solution does she offer. Worthless. Boot her.
People have no clue how harsh the quality of life downgrade would be if the US lost its world reserve currency status
well, you know The Donald certainly has no clue.....just last night he was gleefully rooting for a default
woke = broke
your wrong. businesses he was part of have. he has never filed bankruptcy. stop watching cnn
Same thing. If you can't run a business correctly, you don't know what you're doing.
he didn't run those businesses as the ceo, such as Taj majal in Atlantic city, business partner only
Republicucks will agree to raise the debt ceiling if they ever want to get elected again. They're already on the ropes but a default could put them down for good.
SP still needs to drop to 3k, if it doesn't start now slowly it'll drop like a rock later
Good luck getting to 3K unless you have a time machine to go back and get rid of smart phones and 0% commission trades?
Disney should bend the knee and admit it was wrong, or continue along the bud light path
Disney will still be around long after DeSantis is gone
obviously but will lose money for a long time
Bad news are very good, neutral is good, good is goodManipulate it till you make it..the longer the better🤷‍♂️
Disney should use Neflix future growth prediction strategy to rally the shares
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