5 Things to Know Before Markets Open

News of the day for March 31, 2023

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The Fed's favorite inflation measure is lower than expected and a slowdown in bank borrowing signals stabilization in that sector. Here’s what investors need to know today.

1. Key Fed Inflation Measure Comes in Below Projections

The Commerce Department's Personal Consumption Expenditures (PCE) Price Index rose 0.3% last month, less than the 0.5% economists expected after rising 0.6% in January. On an annual basis, the index was up 5%, decelerating from 5.3% the month before. Core prices, which exclude volatile food and energy costs, were up 0.3% last month and 4.6% year-over-year.

2. Bank Borrowing Slowing Down

Banks cut borrowing from two Federal Reserve backstop lending programs in the most recent week, in a sign that bank liquidity may be stabilizing. The Fed’s balance sheet declined for the first time in four weeks by $28 billion. Federal Reserve loans to banks fell to $152.6 billion from $163.9 billion.

3. Wall Street Bonuses Fall Last Year

The average Wall Street bonus fell 26% last year, the biggest percentage drop since the financial crisis as the slump in dealmaking cut into bankers’ compensation. Financial industry workers in New York City received average bonuses of $176,700 last year compared to a record high of $240,400 a year earlier, according to New York Comptroller Thomas P. DiNapoli.

4. FTX Founder Pleads Not Guilty to Chinese Bribery Charges

Indicted FTX cryptocurrency exchange founder Sam Bankman-Fried pleaded not guilty to new charges of conspiring to violate campaign finance laws and bribing Chinese authorities. Bankman-Fried entered the plea to the new 13-count indictment at a hearing in federal court in New York.

5. Electric Truck Maker Nikola Shares Fall on Stock Sale News

Shares of electric truck maker Nikola (NKLA) fell over 5% after the company announced plans to raise $100 million in a secondary stock offering and possibly a private sale of stock to an unnamed investor if the offering raises less than $100 million. Citigroup, which is underwriting the offering, also has the option to buy an additional $15 million worth of Nikola shares.

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  1. CNBC. “Key Fed inflation gauge rose 0.3% in February, less than expected.”

  2. Bureau of Economic Analysis. “Personal Income and Outlays, February 2023.”

  3. CNN. “The average Wall Street bonus fell by 26% last year.”

  4. Yahoo Finance. “FTX's Sam Bankman-Fried pleads not guilty to new US charges.”

  5. CNBC. “Nikola announces a $100 million stock offering.”

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