Bloomberg - Evening Briefing - The wrong call?

When a few mid-sized US banks suddenly went belly-up last month, the bond market made its feelings known—and with gusto. Two-year Treasury yields slid a percentage point over three days, the most since 1982. For traders accustomed to treating such signals as sacrosanct, the message was obvious: The recession many had been (incorrectly) predicting since last summer was really, truly inevitable now.

Or was it? Three weeks later, the wise folk of Wall Street still don’t know what to make of the volatility in fixed-income that—for all its ferociousness—remains largely absent in equities and credit. Explaining the divide has become a bit of an obsession for some, especially since Treasuries hold such sway in those models that supposedly divine the future of Fed policy. The gap in market reactions borders on the historic: Stocks absorbed Silicon Valley Bank’s death and subsequent contagion fears with relative ease. And for credit, blue-chip and high-yield spreads never got wider than levels seen last fall. “Each day that there isn’t a banking crisis is another day indicating that the current pricing doesn’t make sense,” said Bob Elliott, chief investment officer of Unlimited Funds. It seems that, in the aftermath of the March banking debacle, the bond crew may have made the wrong call. —Natasha Solo-Lyons and David E. Rovella

The Federal Home Loan Bank system is said to have issued only $37 billion in debt in the last week of March, a sharp drop from the $304 billion two weeks earlier, when all that financial unpleasantness burst forth. That plunge from an all-time peak may affirm suspicions that the banking crisis was short-lived. 

A shooting Monday at a bank in downtown Louisville killed at least four people and wounded at least eight others, police said. The suspected shooter was also dead, according to police. The shooting, the 15th mass killing in the country this year, comes just two weeks after a former student killed three children and three adults at a Christian elementary school in Nashville, Tennessee, about 160 miles to the south. 

Police at the scene of a shooting in Louisville, Kentucky, on Monday. Photographer: Leandro Lozada/AFP/Getty Images

Apple’s personal computer shipments declined by 40.5% in the first quarter, marking a tough start to the year for PC makers still grappling with a glut of unsold inventory.

The Biden administration asked a federal appeals court to suspend a ruling by a Trump-appointed judge in Amarillo, Texas, released late on Friday afternoon, blocking access to an abortion pill nationwide. The judge, Matthew Kacsmaryk, a lifelong opponent of abortion rights, leveled an unprecedented challenge to the two decade-old government approval of a drug whose use and safety has been affirmed by more than 100 scientific studies. Kacsmaryk, the lone judge assigned to the court where the case was filed, created a novel controversy last month when he unsuccessfully sought to keep secret the date of a court hearing in the matter. The Biden administration, health experts, legal scholars and pharmaceutical executives attacked Kacsmaryk’s decision, saying it’s legally flawed, could hobble the Food and Drug Administration and, by extension, hinder the development of future medicines. 

Matthew Kacsmaryk Source: Senate Judiciary Committee/AP

Donald Trump’s new accounting firm struck a deal with the New York attorney general to hand over documents subpoenaed in the state’s $250 million lawsuit over the real estate developer’s asset valuations. The case is separate from the Republican’s criminal prosecution in New York state court over alleged payoffs tied to the 2016 presidential campaign.

The Justice Department has opened a criminal investigation into the leak of highly classified Pentagon documents that appear to reveal how the US spies on other countries, including an assessment of weaknesses in Ukraine’s military—all possibly to the benefit of Russia. Meanwhile a US Navy destroyer passed through the South China Sea despite territorial claims by Beijing, in a show of force just as China’s military holds drills around Taiwan following a visit by its president to America.

The USS Milius in the South China Sea near the Spratly Islands Source: MC1 Greg Johnson/US Navy

Entering adulthood is hard. But parents say financially supporting grown children is harder. Almost 70% of parents with kids 18 or older say they’ve sacrificed their own finances to help them.

Bloomberg continues to track the global coronavirus pandemic. Click here for daily updates.

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• Golfer Jon Rahm won a record $3.24 million prize at the Masters.

The Super Mario Bros. Movie topped the box office, taking in $146 million in its domestic debut, the biggest opening weekend for a film so far this year. The animated feature from Comcast’s Universal Pictures and the Illumination animation studio was forecast to bring in $112 million in US and Canadian theaters from Friday through Sunday.

The Super Mario Bros. Movie Universal Pictures

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