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1. Failing First Republic Bank Sold to JPMorgan
U.S. regulators seized the failing First Republic Bank and sold most of its operations to JP Morgan Chase & Co. to prevent a collapse, CoStar News' Andy Peters reports. JPMorgan will assume the bank’s $92 billion deposits as well as most of the bank’s assets, including $173 billion in loans and $30 billion in securities.
First Republic Bank is the third major U.S. bank to fail since March, according to the article. Bank regulators blamed their own staff as well as bank management for the failures of Silicon Valley Bank and Signature Bank.
2. Chinese Tourism Surges Over Holiday
The start of China’s five-day Labor Day holiday got off to a strong start, with roughly 19.7 million railway trips made across the country on April 29, Bloomberg reports. China Railway Group expects a record 120 million passengers during the holiday, a 20% increase over 2019.
Along with their desire to travel, Chinese citizens were ready to spend, according to the article. Major retail and catering companies reported sales increasing by 21% year over year. Key food chains saw revenue grow 37%, clothing sales grew by 21% and jewelry, cigarette and alcohol sales increased by 17%.
3. Hoteliers Rethink Rate Strategies
Persistent inflation has caused some travelers to pull back on their spending, leading hoteliers in some U.S. markets to adjust how they price their rooms, reports HNN's Dana Miller.
Dan Paola, vice president of operations at management, development and investment company Raines, said his company saw a strong start to the year, but guests have been more rate-sensitive than they were in recent years, so the company's average daily rates aren't as high as they previously projected.
“As a portfolio, we are almost flat in ADR year over year, but up over 5% in occupancy," he said. "April may be the first month that some of our hotels don’t see overall year-over-year increases. It’s hard to tell with some properties because there continues to be new supply entering the market. With so many brands, guests are looking to try something new.”
4. Fed Eyes Another Increase
The Federal Reserve is expected to raise interest rates at its upcoming meeting this week, the Wall Street Journal reports. One more quarter-percentage point increase would bring the benchmark federal funds rate to the highest it’s been in 16 years.
Officials at the Fed have been keeping an eye on signs that the economy, and in turn inflation, is cooling since they started raising rates from near zero in March 2022, the newspaper reports. The latest increase brought rates up to a range of 4.75% to 5%.
5. Workers Rally for May Day
Workers across Europe and Asia hit the streets Monday in celebration of May Day and support of labor rights, the Associated Press reports. There has been an increased push by workers for higher wages and better working conditions since the start of the pandemic and the rise of inflation.
In France, thousands marched against President Emmanuel Macron’s decision to raise the retirement age from 62 to 64, the news agency reports. In Turkey, police prevented demonstrators from reaching Istanbul’s main square, an area declared off-limits by the government. Spain’s unions led multiple marches across the country in support of higher wages to keep up with inflation as well as a four-day workweek.