Daily Brief - 16 May 2024

US inflation eases for first time in six months, giving hope to the Fed

In April, US inflation slowed down for the first time in half a year, rising by 0.3%, mainly due to shelter and gas prices. The core consumer price index, which excludes food and energy, also rose by 0.3%, showing the slowest annual growth in three years.

This decline in inflation offers some relief to the Federal Reserve, which is considering cutting interest rates. Retail sales remained flat, suggesting high borrowing costs are making consumers more cautious.

While there's a chance for a rate cut later this year, Fed officials want to see more consistent data before making any decisions.

UBS reshuffles asset management leadership

UBS Group AG has revamped its asset management unit’s leadership under the new head, Aleksandar Ivanovic, to streamline operations and integrate Credit Suisse.

Ivanovic announced the changes, which aim to consolidate the product offering and reduce costs, in an internal memo. Key appointments include Joe Azelby as head of real estate and private markets, and Barry Gill as head of investments.

Several managing directors will retire or leave the firm as part of the restructuring. Ivanovic emphasized that 2024 is crucial for integrating Credit Suisse and overcoming industry challenges.

GameStop and AMC shares plummet as meme stock rally fizzles out

The recent surge in GameStop and AMC Entertainment shares, spurred by "Roaring Kitty" Keith Gill's return, faltered on Wednesday, with GameStop dropping 19% and AMC falling 20%.

Earlier in the week, the stocks had doubled in value, adding about $11 billion. The downturn erased approximately $3 billion in market value. Unlike the 2021 meme stock frenzy, current conditions such as higher interest rates and diminished consumer savings contributed to the decline.

AMC leveraged the rally to reduce $164 million in debt through a private deal, but both stocks saw significant losses by Wednesday’s close.