Jamie Dimon crafts a plan to save First Republic Bank, Janet Yellen reassures banking industry reps, and Amazon announces more layoffs. Here’s what investors need to know today.
1. JPMorgan Leads Rescue Plan as First Republic Shares Fall
JPMorgan Chase CEO Jamie Dimon is reportedly leading talks to stabilize First Republic Bank (FRC), the troubled bank whose shares plummeted 47% to an all-time low yesterday following another credit downgrade. Dimon is promoting a plan that would convert some or all of the bank’s $30 billion in deposits at First Republic into a capital infusion. Shares of First Republic are surging over 20% in pre-market trading.
2. Janet Yellen to Pledge Additional Support for Depositors
U.S. Treasury Secretary Janet Yellen is expected to tell industry representatives that the government is prepared to expand its guarantee of deposits if the banking crisis continues. In prepared remarks for today’s speech to the American Bankers Association, Yellen will say that regulators believe they have taken enough action already to stem liquidity problems, but they are ready to move if more is needed.
3. Amazon Lays Off 9,000 More Workers
Amazon (AMZN) announced it would lay off 9,000 workers, coming months after it cut 18,000 positions as the online retail giant struggles with slowing online sales. The layoffs will mainly target the company’s AWS cloud service, advertising, its PXT division, and Twitch streaming platform.
4. Moody's Upgrades Tesla Debt
Moody’s Investors Service upgraded electric vehicle maker Tesla (TSLA) to an investment-grade status of Baa3. It’s the second rating agency to upgrade Tesla, the eighth-largest company in the world by market cap, following S&P Global’s upgrade in October.
5. Foot Locker Downsizes
Footwear retailer Foot Locker (FL) will close 400 stores, representing 10% of the chain’s sales, in an attempt to simplify its operations. It will also open new concept retail locations in an effort to relaunch its brand. The announcement comes as the store reported lower earnings and forecast sales would drop this year.