Today's Scoop:

Hey friends, here’s what you need to know today…

1. Companies reduced job openings in March, but they’re still plentiful.

2. Layoffs increased in March but are still low.

3. The government has one month to raise the debt ceiling or risk a crisis.

S&P 500: 4,119.58
1Mo: -1% | 1Yr: -1% | 5Yr: +55%

The market sank today as investors buckled under the uncertainty of the economy. The First Republic Bank failure was resolved, but the nerves are still there. Corporations are delivering good and bad news, and the economy seems to be slowing but also rebounding.

Job openings declined in March, while layoffs stayed low overall. The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) reported 9.6 million roles available at the end of March, down from over 11 million in December. There are 1.6 available positions for every unemployed worker. Overall layoffs increased to 1.8 million in March. That’s up from 1.6 million in February but still in line with pre-pandemic averages.

The jobs market is moving in the right direction for now. Policymakers have been watching employment as a gauge for the overheating economy. Companies were running too hot and didn’t have enough resources to do it, humans included, driving up prices for everything. There were nearly two open job postings for every unemployed worker in January. So policymakers have been trying to cool economic activity and bring the supply and demand for workers back into balance. Fewer job openings mean the policy is working for now, as long as unemployment doesn’t spike up.

The government needs to figure out the debt ceiling. Treasury Secretary Janet Yellen warned that the government will run out of cash and max out its credit card by June 1st. Congress needs to approve a higher debt limit before then, but this process is always political. Raising the debt ceiling doesn’t approve more spending. It just allows the Treasury to pay the bills Congress already created. More anxiety lies ahead.

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• IBM plans to replace 8,000 workers with AI

• Uber delivers more profitability

• Restaurant Brands signals a Whopper turnaround

• BP angers investors with less buybacks and sustainability [🤓]

• Pfizer transitions to post-covid business

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Dividends and Share Buybacks

Companies with extra cash can reward shareholders for their support in two ways. First, they can distribute money directly to investors, literally giving them a share of the profits by paying them a dividend. Companies will declare that every investor gets $X for each share they own.

Second, companies can buy back their own shares from public investors. Buybacks allow companies to reduce the number of outstanding shares in the market, making each remaining share more valuable. They're slicing their company ownership into fewer pieces, allowing each shareholder to own a greater percentage of the company. If companies pause or slow either of these activities, it can mean they're preparing for trouble.

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