Crypto Rout, PPI, SEC Probing Musk-What’s Moving Markets?

The world’s most significant stablecoin, Tether, wobbles as the rout in crypto continues. The U.S. producer price index for April is expected, a day after more troubling data for consumer inflation. Stocks are expected to extend their losses into a sixth day, and even excellent increases in streaming can’t rescue Walt Disney (NYSE: DIS) (NYSE: DIS). The SEC is scrutinising Elon Musk’s late disclosures in his bid for Twitter (NYSE:TWTR), and oil is down in the overall slide in risk assets. Here’s everything you need to know about the financial markets on Thursday, May 12th.

1. Tether wobbles as crypto meltdown worsens

The world’s largest stablecoin slipped below its theoretical peg of 1:1 against the dollar on Thursday as the worldwide selloff in cryptocurrencies worsened.

Tether dipped as low as 93.35 cents in early trading in Europe-over 6.5 percent below its peg-but recovered most of its losses after Tether’s chief technology officer, Paolo Ardoino, said in an interview broadcast on Twitter that the majority of Tether’s reserves are now held in risk-free U.S. Treasuries. He stated that the Tether network was fulfilling redemption demands “without a sweat drop.”

Redemption demand is growing as crypto investors race for the exits amid the collapse of assets connected to TerraUSD, a stablecoin that was supported mostly by Bitcoin and algorithmic trading. Bitcoin plunged over 12 percent to its lowest since December 2020, while Ethereum fell over 22 percent.The lone benefactor of the action was USD Coin, a stablecoin which, like Tether, is backed by dollar reserves.

2. PPI and Jobless Claims due

The newest act in the U.S. inflation drama is scheduled for 8:30 AM ET (1230 GMT), with the announcement of producer price inflation for April. Analysts predict factory gate prices to have grown by just 0.5 percent , a deceleration from 1.4 percent in March. That should move the yearly PPI down to 10.7 percent from 11.2 percent.

The figures come a day after the monthly consumer price inflation report showed a mixed picture, with strong increases in demand for travel and further solid rises in food and shelter prices, but with declines in prices for the kinds of goods – especially used cars – that were so in demand a year ago.

At the same time, the Labor Department will also announce this week’s unemployment claims figures. They’re anticipated to linger slightly around the 200,000 threshold, after a fairly big jump last week.

3. Stocks poised to prolong losses; Disney down despite streaming gains.

U.S. equities are likely to continue their losses at the outset, unable to escape anxieties about a GDP slowdown as central banks across the globe attempt to fight excessive inflation (except in China, where the economic slowdown is the product of a real estate crisis and heavy-handed epidemic control). Except in China, where the growth slowdown is the result of a real estate crisis and heavy-handed pandemic management).

By 6:15 AM ET, Dow Jones futures were down 207 points, or 0.7 percent, while S&P 500 futures were down 0.8 percent and Nasdaq 100 futures were down 1.2 percent.

Stocks likely to be in focus include Walt Disney, which is forecast to begin down about 5 percent at a two-year low in reaction to weaker-than-expected results after the bell on Wednesday.That’s despite the fact that its Disney+ streaming network — under severe scrutiny in the aftermath of Netflix’s stunning membership decrease in the first quarter attracted roughly 8 million new users, far beyond projections.

Any disappointment at the Mouse House should pale into comparison with Softbank (OTC: SFTBY), which reported a $13 billion loss for the fiscal year just ended, due to massive writedowns on some of its holdings, such as ride-hailing company Didi Global, Singaporean peer Grab and food delivery company DoorDash.Softbank’s shares fell 8 percent in Tokyo overnight.

4. SEC investigating Musk’s Twitter disclosures-WSJ

The Securities and Exchanges Commission is examining Elon Musk’s late disclosure of his investment in Twitter, according to The Wall Street Journal, which cited individuals familiar with the subject late on Wednesday.

Musk reported the size of his purchase 10 days later than SEC regulations would allow. That helped him acquire more shares without alerting others to the truth.

The announcement is unlikely to assist smooth Musk’s proposed purchase of the social media network, given its already-contentious political component. Further losses in the value of Tesla (NASDAQ:TSLA) shares, which Musk expected to put as security for some of his buyout financing, are further complicated the process. Twitter stock is projected to start at $45.26, the lowest it has been since Musk announced his bid to take the business private for $54.20 a share.

5. Oil falls but IEA warns of prolonged constraint in gasoline markets.

Crude oil prices dipped on Wednesday, failing to escape the global growth uncertainties weighing on risk assets throughout the globe.

By 6:30 AM ET, U.S. oil prices were down 1.6 percent at $104.02 a barrel, while Brent crude was down 1.5 percent at $105.87 a barrel.

In a monthly report on the state of the oil market published earlier, the International Energy Agency kept its forecasts for global supply and demand roughly stable but warned that global fuel markets may face further strain in the months ahead as Chinese demand rebounds following a spate of new Covid lockdowns.

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