NY Fed: Workers seeking record wages to consider new jobs
Stocks drop as Mideast tensions, Treasury yields weigh
U.S. stocks closed sharply lower on Monday, as an early lift from a strong retail sales report succumbed to a jump in Treasury yields and concerns about rising geopolitical tensions between Iran and Israel.
With the S&P 500 coming off its biggest one-day percentage drop since Jan. 31 in the prior session, stocks opened higher in part after data showed retail sales increased by more than expected in March.
Also providing early support were gains in some financial stocks after their quarterly results, with Goldman Sachs rising 2.92% as its first-quarter profit beat Wall Street estimates, fueled by a recovery in underwriting, deals and bond trading that lifted its earnings per share to the highest since late 2021.
But gains faded over concerns the hostilities between Israel and Iran could continue to flare, and Treasury yields jumped, with the benchmark 10-year U.S. Treasury note hitting its highest level since November.
The Dow Jones Industrial Average fell 248.13 points, or 0.65%, to 37,735.11; the S&P 500 lost 61.59 points, or 1.20%, to 5,061.82; and the Nasdaq Composite lost 290.07 points, or 1.79%, to 15,885.02.
Adobe explores partnerships as it adds AI video tools
Adobe is in the early stages of allowing third-party generative artificial intelligence tools such as OpenAI’s Sora and others inside its widely used video editing software, the U.S. software maker said on Monday.
Adobe’s Premiere Pro app is widely used in the television and film industries. The San Jose, California, company is planning this year to add AI-based features to the software, such as the ability to fill in parts of a scene with AIgenerated objects or remove distractions from a scene without any tedious manual work from a video editor.
Both those features will rely on Firefly, an AI model that Adobe has already deployed in its Photoshop software for editing still images.
But Adobe also said on Monday that it is developing a way to let its users tap third-party tools from OpenAI, as well as startups Runway and Pika Labs, to generate and use video within Premiere Pro. The move could help Adobe, whose shares have fallen about 20% this year, address Wall Street’s concerns that AI tools for generating images and videos put its core businesses at risk.
Deepa Subramaniam, Adobe’s vice president of product marketing for creative professional apps, said that Adobe has not yet settled how revenue generated by third-party AI tools used on its software platform will be split up between Adobe and outside developers.
The lowest wage Americans said they were willing to accept to take a new job reached a record high in March, new data from the New York Federal Reserve showed on Monday.
The so-called average reservation wage was $81,822 as of March, up substantially from the $73,391 seen in the last report in November 2023, the regional Fed bank said, drawing on data compiled in its regular Survey of Consumer Expectations. The New York Fed said that rise was driven by men, respondents over the age of 45 and those without college degrees.
The report also found declining satisfaction with wage and non-wage compensation in March, while satisfaction with promotion opportunities held steady.
New York Fed data tracking reservation wage demands has shown a solid uptrend amid ongoing inflation pressures and labor market tightness. While inflation has been waning, price pressures remain robust and are driving workers to seek higher wages, while a strong need for workers has given employees more power to get their wage demands met.
Despite the higher wages being sought by workers, the New York Fed found that employers were offering lower starting wages, with the average offer at $73,668 in March compared to $79,160 last November.
Open source groups say more projects may have been targeted
The recent attempt by an unknown actor to sabotage a widely used software program may have been one of several attempts to subvert key pieces of digital infrastructure across the internet, two open source groups said in an alert published on Monday.
In a joint statement, the Open Source Security Foundation and the OpenJS Foundation said the attempt to insert a secret back door into XZ Utils – a littleknown program that is baked into Linux operating systems across the world – “may not be an isolated incident.”
They said at least three different JavaScript projects were targeted by unnamed individuals demanding suspicious updates or asking to be made maintainers of the targeted software.
The JavaScript programming language powers much of the modern web and sees intensive use across the world. Omkhar Arasaratnam, the Open Source Security Foundation’s general manager, said that one of the targeted packages alone saw tens of millions of downloads a week.
Arasaratnam also said that while it wasn’t clear what the suspected malicious actors were hoping to do – “we stopped them before they got that far” – he suspected they hoped to build back doors into those projects as well.
US to probe unfair practices in airline loyalty programs
As part of an effort to protect consumers from deceptive and unfair practices, the U.S. Department of Transportation and the Consumer Financial Protection Bureau will hold a public hearing looking into airline loyalty programs, spokespeople for both agencies said on Monday.
The May 9 hearing will include regulators, airline executives, consumer advocates and banking officials. Allegiant
Citi wealth division’s CIO Bailin to depart after 15 years
Citigroup’s David Bailin, chief investment officer at the global wealth division, will leave on May 15 after 15 years at the bank, he said in a LinkedIn post on Monday.
Bailin became the global head of investments in 2017 and took his current job in 2019. Before joining Citi, he was the head of alternative investment asset management for Bank of America’s global wealth and investment management.
Bailin will pursue a new opportunity, said Andy Sieg, head of the wealth management division, in a memo seen by Reuters, without elaborating.
Steven Wieting, chief investment strategist and chief economist, will become interim CIO as Citi seeks a permanent replacement, Sieg added.
Casino operator MGM sues FTC to block probe into 2023 hack
MGM Resorts International is suing the U.S. Federal Trade Commission to block a probe into the impact on data security of the dramatic hack that hobbled the casino operator last year.
In a lawsuit filed on Monday in federal court in Washington, MGM said it was seeking to quash the FTC’s demands for information because the operator was not a financial institution and therefore was not subject to FTC rules governing consumer financial data.
The lawsuit also argued that, because FTC Commissioner Lina Khan was reportedly checking in to an MGM hotel when the hack knocked out its systems, she was personally involved in the matter and should recuse herself.