|
|
Good afternoon. Here’s what you should know today, May 2: |
|
House Democrats will try to use a legislative maneuver to raise the debt ceiling Mike Myers is listing his New York penthouse for $20 million. Party on! Switzerland doesn’t want children to bug out over eating insects |
|
|
|
| Businesses have been padding their profits, according to economists at the European Central Bank. PHOTO: LIONEL BONAVENTURE/AGENCE FRANCE-PRESSE/GETTY IMAGES |
|
|
1. Corporate profits could be the reason for stubborn inflation. |
|
Yes, pandemic- and Ukraine war-related supply chain disruptions increased companies’ costs, but some businesses aren’t just covering their higher expenses, they’re boosting profit margins (🔐read for free), European Central Bank economists say. This was a bigger contributor to inflation during the second half of last year than rising wages. Usually, consumers would migrate to competitors that only raise prices a little or not at all. It’s possible that shoppers have been OK with higher prices lately because they know about supply bottlenecks and steeper energy costs. |
|
What a Fed Debate 17 Years Ago Reveals About Its Rate Deliberations Now (Read) Fed Should Pause Rate Increases After This Week, Former Vice Chair Says (Read) Job Openings Near Two-Year Low as Layoffs Jump (Read) Tight Supply Fuels Demand for Newly Built Homes (Read) |
|
2. House Democrats are trying to force a vote on a debt-ceiling increase. |
|
They took the next step in starting a discharge petition, a legislative maneuver that allows a majority of lawmakers to bring a bill directly to the floor without the leadership’s cooperation. The GOP controls the House 222-213, so for a petition to succeed, Democrats would need the support of at least five Republicans. Lawmakers can start gathering signatures on May 16, according to an aide. The GOP sees the debt limit as an opportunity to rein in spending, while Biden and Democrats say they won’t be pressured into cutting federal programs. The U.S. risks defaulting as soon as June 1 if Congress doesn’t raise the debt limit, Treasury Secretary Janet Yellen said yesterday. The U.S. technically bumped up against the $31.4 trillion debt ceiling in January, but special accounting maneuvers have enabled the government to meet its obligations. |
|
Biden Secured Trillions in Domestic Spending. Now Comes the Hard Part. (Read) |
|
3. U.S. stocks and oil prices fell sharply as investors braced for a Fed interest-rate increase. |
|
The pain spread across economically sensitive markets, walloping regional bank stocks and low-quality bonds. Treasury debt and gold—traditional safe havens amid market distress—were among the few assets to gain. The Dow Jones Industrial Average and the technology-laden Nasdaq Composite both declined 1.1%, and the S&P 500 dropped 1.2%. The Fed is expected to lift its benchmark federal-funds rate by a quarter percentage point to between 5% and 5.25% at the close of its meeting tomorrow. |
|
Battle of the Activists: Hindenburg Shorts Icahn (Read) 🎥 How Elon Musk’s Net Worth Wavers Thanks to Tesla and Twitter Volatility (Watch) Investors Are Piling Into Actively Managed ETFs (Read) |
|
4. Late-night fans need to find something else to watch. |
|
ABC’s “Jimmy Kimmel Live,” CBS’s “The Late Show with Stephen Colbert,” NBC’s “The Tonight Show Starring Jimmy Fallon” and HBO’s “Last Week Tonight with John Oliver” are expected to go dark due to the Hollywood writers strike, according to people close to the shows. Talks between the Writers Guild of America and a coalition representing the major Hollywood studios, streamers and networks didn’t yield a new deal by yesterday’s deadline. Many of the divisive issues relate to the growth of streaming platforms, which have veered away from the traditional TV production model. No future talks are currently scheduled, both sides said. |
|
To Binge or Not to Binge? Netflix and HBO Max Debate How to Release Your Favorite Shows (Read) Upon Further Review, Super Bowl LVII Was Most-Watched U.S. TV Show Ever (Read) |
|
📰 Enjoying this newsletter? Get more from WSJ and support our journalism by subscribing today with this special offer. |
|
|
Do you feel disconnected from your coworkers in this era of hybrid work? What have you or your company tried to create a sense of belonging? Email careers@wsj.com for the chance to be featured in an upcoming story. |
|
|