5 Things to Know Before Markets Open

News of the day for May 12, 2023

Elon Musk

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Tesla shares move higher on news of a new Twitter CEO and a meeting on the debt ceiling is postponed. Here’s what investors need to know today.

1. Tesla Shares Higher on News of New Twitter CEO

Shares of Tesla (TSLA) moved close to 1% higher in pre-market trading after reports that Elon Musk was prepared to install NBCUniversal head of advertising Linda Yaccarino as the new Twitter CEO. Delegating some of Twitter’s duties could allow Musk more time to focus on his role as the CEO of the electric vehicle maker.

2. Michigan Consumer Sentiment Index Projected to Decline

The Michigan Consumer Sentiment Index will be released at 10 a.m. ET and analysts are projecting a drop in the survey of personal consumer confidence in economic activity. After finishing April at a reading of 63.5, the preliminary survey results today are expected to bring the index down to 63.

3. PacWest Decline Shows Banking Worries Continue

Shares of PacWest (PACW) fell 23% on Thursday on reports it lost more than 9% of deposits, amid investor concerns over the health of regional banks. PacWest’s stock price is down 80% year-to-date, while the SPDR S&P Regional Banking ETF (KRE) has declined 38%, and the S&P 500 has moved up 7.6%. Shares of PacWest were up more than 1% in pre-market trading.

4. Debt Ceiling Meeting Postponed as Staff Continue Negotiations

A meeting scheduled today between President Joe Biden and House Speaker Kevin McCarthy on extending the U.S. debt ceiling was postponed until next week. Sources familiar with the negotiations said the delay was a positive step, giving staff on both sides more time to construct a deal before the June 1 deadline for U.S. debt default.

5. Tesla Braking Software Update Classified as Product Recall by Chinese Regulators

Tesla notified China’s market regulator that it will deploy a software update to 1.1 million vehicles in what’s called a “product recall,” but it’s unclear if owners would need to return vehicles or be eligible for refunds. The software update will make changes to braking methods and provide more warnings about accelerator pedal usage for both imported and China-made Model S, Model X, Model 3 and Model Y cars.

Article Sources
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  1. Wall Street Journal. “Elon Musk in Talks With Linda Yaccarino in Talks to Become Twitter CEO.”

  2. MarketWatch. “U.S. Economic Calendar.”

  3. Wall Street Journal. “PacWest Stock Decline Indicates Bank Fears Persist.”

  4. Yahoo Finance. “Friday’s debt-ceiling meeting at the White House postponed.”

  5. Reuters. “China regulator says Tesla to update software of more than 1 mln cars.”

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