5 Things to Know Before Markets Open

News of the day for May 8, 2023

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Federal data is expected to show a slower pace of bank lending and the White House is looking at a proposal to make airline compensate travelers for avoidable delays. Here’s what investors need to know today.

1. Federal Lending Survey Expected to Hint at Coming Credit Crunch

The Federal Reserve’s Senior Loan Officer Opinion Survey (SLOOS), a quarterly assessment of bank lending, is expected to show a slower pace of lending and tightening standards when it is released later today. Fed Chair Jerome Powell previewed the survey results last week, noting that a lending slowdown would help curb inflation. It will be released at 2 p.m. ET.

2. White House to Examine Airline Compensation for Flight Delays

The White House will examine whether to require airlines to compensate travelers for “controllable airline cancellations” or delays. Transportation Secretary Pete Buttigieg will announce the proposal as his department has come under criticism for a spate of flight delays and cancellations over the past year. Canada and the European Union already require that airlines offer some compensation for avoidable travel delays.

3. Yellen Urges Congress to Act Ahead of Biden Debt Limit Meeting

Treasury Secretary Janet Yellen said that the U.S. has already been using “extraordinary measures” to avoid a default and that the U.S. economy will suffer a “steep economic downturn” if Congress doesn’t raise the debt ceiling before the June 1 deadline. President Joe Biden is scheduled to meet on May 9 with congressional leaders to discuss increasing the U.S. debt limit.

4. AMC Reaches Agreement on APE Shareholder Suit

Movie theater chain AMC Entertainment Holdings AMC (AMC) said it has reached an agreement with shareholders to prevent a court fight over a proposed stock conversion. AMC shareholders in March approved a plan to convert AMC Preferred Equity (APE) units into common stock, alongside a 10-to-1 reverse stock split, but a subset of investors filed suit to block the move. AMC shares were lower by more than 4% in pre-market trading.

5. Occidental Petroleum Shares Lower After Buffett Says He Won’t Take Control

Berkshire Hathaway won’t take control of Occidental Petroleum (OXY), despite the firm’s increasingly large stake in the company, Warren Buffett said this weekend. Occidental shares fell lower in pre-market trading on the weekend comments from Buffett, whose Berkshire Hathaway owns 24% of the oil company and has been approved by regulators to take full control of the energy firm.

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  1. Barron’s. “Is a Credit Crunch Coming? We'll Get Clues in a Fed Report on Monday.”

  2. CNN Politics. “Biden administration will propose rule requiring airlines to compensate passengers for canceled or delayed flights.”

  3. CNBC. “Yellen warns of 'economic chaos' unless Congress raises the debt ceiling.”

  4. MarketWatch. “AMC says it's reached deal to settle shareholder lawsuit over APE conversion.”

  5. Bloomberg. “Occidental Drops After Buffett Said Not Seeking Full Control.”

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