Investing.com -- U.S. stock futures point lower with key tech earnings waiting in the wings. Investors get a peek at how March's banking sector turmoil impacted two lenders near the center of the crisis, while two U.S. cable news channels announce shock departures by some of their brightest stars.
1. U.S. futures in the red as tech earnings loom
U.S. stocks are seen opening lower on Tuesday, as investors await the release of quarterly results from big global tech names.
By 05:22 ET (09:22 GMT), the Dow Futures contract was down 1548 points or 0.45%, S&P 500 Futures traded about 23 points or 0.55% lower, and Nasdaq 100 Futures slipped by 67 points or 0.52%.
On the docket for earnings this week are three out of the four largest U.S. companies by market value: Microsoft Corporation (NASDAQ:MSFT), Google-parent Alphabet (NASDAQ:GOOGL), and Amazon.com Inc (NASDAQ:AMZN). Microsoft and Alphabet are both slated to report later today, followed by Amazon on Thursday. Facebook-owner Meta Platforms Inc (NASDAQ:META) is also due out on Wednesday.
Shares in these firms have risen so far this year, and these results will likely serve as a test to see whether these moves are justified while concerns grow over a slowdown in broader economic activity.
Elsewhere, other major brands set to report include PepsiCo Inc (NASDAQ:PEP), McDonald’s Corporation (NYSE:MCD), and Verizon Communications Inc (NYSE:VZ), along with General Motors Company (NYSE:GM) and General Electric Company (NYSE:GE).
2. Depositors flee First Republic
Shares in First Republic Bank (NYSE:FRC) shed more than a fifth of their value in postmarket trading on Monday after the San Francisco-based bank said that it saw $100 billion in customer withdrawals last month.
The regional lender became a focal point during the banking sector crisis in March sparked by the collapse of Silicon Valley Bank. Customers raced to withdraw funds, fuelling concerns that First Republic would need to offload its mortgage portfolio at a heavy loss to cover the outflows.
High-profile U.S. financiers and government officials eventually engineered a rescue deal that saw a group of 11 banks place $30B in deposits in First Republic. This helped lessen the slide in quarterly deposits, with the figure falling by $72B.
In a joint statement, executive chairman Jim Herbert and chief executive Mike Roffler noted that the company's deposit base has since stabilized. They also backed the "strength of our credit quality and capital position."
However, First Republic, which has seen shares plummet by 87% this year through to Monday's close, warned that it will slash headcount by about 20% to 25% in the second quarter. It also pledged to pursue "strategic options" to reinforce its capital position, and withdrew its financial guidance.
3. "Challenging" times ahead for UBS
UBS Group AG (SIX:UBSG) reported a $28B climb in net new money at its key wealth management division as the banking sector turmoil hit its merger partner (and old rival) Credit Suisse (SIX:CSGN).
Switzerland's largest bank noted that $7B of these inflows came in the final ten days of March following the announcement of its government-brokered acquisition of Credit Suisse.
UBS chief executive Sergio Ermotti, who returned to the helm of the lender in March to oversee the tie-up, faces a mammoth task folding ailing Credit Suisse into its operations. On Monday, Credit Suisse reported CHF 61B- roughly $68B- in outflows over the first quarter, and warned that this asset flight has yet to abate.
Ermotti himself flagged that economic conditions remain "challenging," telling Reuters after the release of its latest earnings that "things are going to be hard."
To complicate matters even more, net profit attributable to UBS shareholders fell by 52% in the first quarter after the bank took out $665M in provisions to cover costs related to litigation surrounding U.S. residential mortgage-backed securities that were at the center of the global financial crisis some fifteen years ago.
Shares in UBS dropped by more than 4% in early European trading on Tuesday.
4. Big changes in U.S. cable news
Two long-time stars of U.S. cable news are leaving their perches in a fresh shake-up in the country's television media landscape.
Host Tucker Carlson has parted ways with Fox News, the network announced on Monday, putting an end to a more than decade-long career as one of the channel's most prominent voices.
Carlson's departure comes after Fox News paid $787.5M last week to settle a legal dispute with Dominion Voting Systems, which had accused it of airing false claims that it rigged its voting machines in favor of Joe Biden during the 2020 U.S. presidential election.
According to the Wall Street Journal, citing sources familiar with the matter, Fox News executives had taken issue with comments from Carlson that were revealed during the course of the Dominion lawsuit which they viewed as derogatory.
Shares in Fox Corp. (NASDAQ:FOX), the owner of Fox News, dropped on Monday.
Meanwhile, Fox News rival CNN said that 17-year veteran anchor Don Lemon is departing the channel.
CNN did not provide further details, but the decision follows controversy sparked by recent comments made by Lemon about Republican presidential hopeful Nikki Haley. Lemon said Haley was not "in her prime," a remark that was later criticized for being sexist.
5. Oil steadies as key Chinese holiday approaches
Oil prices mostly stabilized, with traders eyeing a possible rebound in demand in China as the second-biggest economy nears a crucial holiday period.
Bookings in China for trips abroad during the upcoming May Day holiday showed signs of recovery from strict COVID-19 pandemic rules. Although the figures are still below pre-pandemic levels due to elevated fares for long-haul flights, investors are trying to gauge how the trend will help support fuel demand in the world's largest oil importer.
Contributing to sentiment as well is the prospect of further interest rate rise in the West, which could weigh on economic growth. Planned supply cuts by the OPEC+ producer group may also boost prices, analysts have suggested.
By 05:18 ET (09:18 GMT), U.S. crude futures traded slightly lower by 0.15% at $78.84 a barrel, while the Brent contract edged down 0.1% to $82.46 per barrel.