5 Things You Need to Know to Start Your Day: Americas

Good morning. New York Community Bancorp slumps again, real estate risks come to the fore and Snap disappoints. Here’s what’s moving markets [View in browser]( [Bloomberg]( Good morning. New York Community Bancorp slumps again, real estate risks come to the fore and Snap disappoints. Here’s what’s moving markets. — [Sam Unsted]( NYCB downgrade New York Community Bancorp’s credit rating was [cut to junk at Moody’s Investors Service](, capping a week when the lender’s shares have dived after it slashed its shareholder payouts and stockpiled reserves to cover loan losses, sending a shiver through the US regional banking sector. Moody’s said the bank is facing “multi-faceted” financial risks and governance challenges. That came as NYCB [closed at the lowest level since 1997](, falling by another 22% on Tuesday and taking the wipeout in its market value over the past week to $4.5 billion. Real estate risks Treasury Secretary Janet Yellen said the losses being seen in US commercial real estate, one of the issues impacting NYCB, are a concern [but that regulators are on the case](. She said higher interest rates, increased vacancies due to a shift in working patterns and the maturing of a wave of real estate loans this year are “going to put a lot of stress on the owners of these properties.” The worries have [continued to spread internationally](, with Germany’s Deutsche Pfandbriefbank’s bonds slumping after an analyst highlighted concerns about its US commercial real estate exposure. No rush to cut Federal Reserve Bank of Cleveland President Loretta Mester said that policymakers will probably gain confidence to cut interest rates [“later this year”]( should the economy continue to progress in line with expectations. But, she said, there is no need to rush to cuts. “It would be a mistake to move rates down too soon or too quickly without sufficient evidence that inflation was on a sustainable and timely path back to 2%,” she said. Her comments precede a swathe of Fed officials speaking on Wednesday including Patrick Harker, Adriana Kugler, Susan Collins, Tom Barkin and Michelle Bowman. Snap drops Shares in Snap have dropped by 30% in premarket trading in New York after its [revenue for the holiday quarter disappointed]( and provided a sign that the parent of Snapchat is reeling from the slowdown in digital advertising. Elsewhere as earnings season rolls on, [carmaker Ford soundly topped expectations]( and forecast higher profits in 2024, which sent its shares higher. Restaurant chain [Chipotle Mexican Grill beat estimates]( too with its sales and check sizes growing, defying worries about weakening consumer sentiment. Coming Up… Ride-sharing firm Uber Technologies, hotelier Hilton Worldwide and KFC and Taco Bell parent Yum! Brands are all set to report today, with Walt Disney and PayPal to follow after markets close in New York. MBA mortgage applications tops a quiet economic agenda beyond the Fed officials speaking. Investors, including some of those pouring money into the exchange-traded funds, are increasingly betting on low volatility, meaning that they expect to make profits from the US stock market staying calm. Do you think that's a smart strategy? What is the best way to protect from a slump in stocks? [Share your views in the MLIV Pulse survey](. What We’ve Been Reading This is what’s caught our eye over the past 24 hours. - Border deal and NYCB [on the Daybreak podcast](. - Nikki Haley [loses the Nevada primary](. - Janet Yellen wants to [visit China this year](. - The Boeing jet in the Alaska Air accident [was missing bolts](. - [English soccer]( keeps attracting American investors. - Adam Neumann enters [WeWork’s high-wire revival act](. - [China replaces]( its securities regulator head in surprise move. And finally, here's what Joe’s interested in this morning I think arguably you could say that one storyline so far this year is the economy is still performing better than people think and for now it looks like rate cuts will not be as soon, or plentiful, as people would have thought a few weeks ago. That being said, the market is reminding people that there's more to the world than Fed policy. Stocks rallied yesterday and the S&P 500 is up close to 4% this year. The NASDAQ is doing a little bit better. It's also not all entirely due to tech. Here's a high level look at the breakdown across industries. Not surprisingly, communication services and info-tech are the big gainers. And at the other end, utilities and real estate are doing what you'd expect with rates having firmed back up. But healthcare, financials, staples, and industrials area all in the green as well. Meanwhile IYT, the big US transportation ETF, (which includes a lot of airlines and trucking companies) has been on a tear and is close to the highs of 2021. So, yeah, it's not clear when or even if the rate cuts are going to come. But for the moment, for most investors, the lines have been going up and to the right regardless. Follow Bloomberg's Joe Weisenthal on X [@TheStalwart]( Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. [Bloomberg Markets Wrap: The latest on what's moving global markets. Tap to read.]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Five Things to Start Your Day: Americas Edition newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](