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Today in the Market (3/24/2023)

Good Evening! In the wake of the Federal Reserve’s interest rate decision on Wednesday and more pressure on the banking sector, U.S. equities recovered early losses to end in positive territory on Friday.

The S&P 500, which dropped as much as 1% in early trading on Friday, reversed course later in the session to settle up 0.56%. The Dow Jones and Nasdaq Composite both gained 0.41% and 0.31%.

WE WON THE BATTLE, BUT NOT THE WAR YET

Activision Blizzard (ATVI) investors were pleased with the start of the trading day, as the video game design specialist’s stock rose. Microsoft’s (MSFT) persistent efforts to purchase Activision Blizzard were in the headlines at the time, and the prospects of a successful merger looked to climb in tandem with the stock price.

Update time! According to the Competition and Markets Authority, it would not be financially prudent for Microsoft to make blockbuster titles like Call of Duty exclusive to Xbox, since the company would have a substantial financial incentive to offer the games to users of competing platforms like Sony’s PlayStation.

However… To clarify, U.K. authorities did not approve the whole transaction yet. As the video game industry becomes more reliant on cloud distribution, there have been concerns that Microsoft’s cloud infrastructure would pose a competitive threat that would justify delaying the purchase. Microsoft offered licensing arrangements for important gaming properties to competitors on this basis, with the idea that doing so would ease regulatory issues. The Competition and Markets Authority anticipates rendering a final determination by the end of April.

TRIMMING THE EDGES

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Bank of America Corp. is reducing its wealth management, banking, and lending department as rising interest rates continue to dampen Wall Street revenue, compelling banks to make larger cutbacks.

Does that mean more layoffs? Correct… According to those with knowledge of the situation, around 200 employees were given other positions in other divisions of the corporation, while a few, including some loan officers, were let go. The salaries of all impacted employees will remain the same, although incentives may differ depending on new duties.

How did the banks get into this position? After a rise in lending in the first half of 2022, banks have withdrawn from financing offices and another commercial real estate due to falling demand and increasing rates. Rivals Wells Fargo & Co. and JPMorgan Bank, lost thousands of positions in mortgage lending after the Federal Reserve hiked interest rates to temper a red-hot housing market.

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