Daily Brief - 1 May 2024

Stocks drop after pay data fuels hawkish Fed action

Stock markets fell after a report showed a big increase in US labor costs, suggesting the Federal Reserve might not cut interest rates soon.

This news led to a drop in the value of stocks and bonds. Companies like Amazon and McDonald's reported their earnings, with mixed results. Some companies are doing well, like Coca-Cola, which is more hopeful about the year ahead.

Others, like 3M, are facing challenges and making big changes. Overall, the market is uneasy as investors wait to see what the Federal Reserve will do next.

BBVA makes new merger move on Sabadell, eyes major banking deal

BBVA, has shown interest in merging with another bank called Sabadell. This comes three years after their first attempt to join forces didn't work out because they couldn't agree on the price.

Sabadell's value has increased after the news, while BBVA's shares have dropped slightly. If they merge, they could become a very big bank in Spain, not far behind the biggest one, Santander.

This deal could help BBVA grow in Spain and also expand in the UK. Talks are starting as BBVA looks to make one of the biggest banking deals in Europe in recent years.

SocGen traders in Asia resign after options bets go undetected

Two traders at Societe Generale in Hong Kong have resigned after an internal review found risky stock option bets that the bank's risk management systems missed. These trades, focused on Indian stock-market indices, could have cost the bank hundreds of millions if the market had dropped severely.

Luckily, no financial loss occurred, but the incident has raised significant concerns about SocGen's risk controls. This comes years after the infamous Jerome Kerviel incident, which cost SocGen billions.

The bank continues to strengthen its risk management practices to avoid similar issues in the future.