Geoffrey Smith 

Investing.com — As crypto’s renaissance continues, the world’s largest stablecoin, is slipping. A day after another alarming report on consumer inflation, the U.S. producer prices index for April will be released. Stocks will continue to lose ground for the sixth consecutive day. Solid gains in streaming won’t be enough to help Walt. Disney (NYSE:). SEC investigates Elon Musk’s failure to disclose information in connection with his bid for Twitter. Oil prices are down due to the decline in risk assets. What you need to know about the financial markets this Thursday, May 12th.

1. Tether wobbles while crypto rout grows

As the cryptocurrency market slumped, the world’s largest stablecoin dropped below the 1:1 mark against the dollar.

Tether fell as low as trading at 93.35 Cents in Europe’s early trading. This was 6.5% lower than its peg. However, it recovered the bulk of its losses when Tether’s chief technology officer Paolo Ardoino stated in a Twitter interview that most of Tether’s reserve funds are now in U.S. Treasuries.  He said that the Tether network was meeting redemption demand “without a sweat drop.”

As crypto investors look for exits, redemption demand has risen after the collapse in assets tied to. This stablecoin was heavily backed by Bitcoin and algorithmic trade. The drop in price was more than 12%, compared to the 22% that it experienced since December 2020. Tether and a stablecoin called, were the only beneficiaries of this move. They are both backed by dollars reserves. 

2. PPI, Jobless Claims due

With the publication of April’s producer price inflation, the U.S. will soon be in full swing. Analysts predict that factory gate prices will have increased by 0.5% in April, which is a decrease from the 1.4% recorded in March. The annual PPI should fall to 10.7% instead of 11.2%.

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 kind of goods – especially used cars – that were so in demand a year ago.

At the same time, the Labor Department will also release the week’s jobless claims numbers.  They’re expected to hover just below the 200,000 level, despite a surprisingly strong uptick last week.

3. Stocks to continue losses, Disney down despite streaming profits

Stocks in the United States are expected to continue their losses, not being able to dispel fears of a slowdown in growth. Central banks all over the globe have been working to curb runaway inflation, except China where it is caused by a real estate crisis, heavy-handed management, and a slowdown in growth.

By 6:15 am ET, they had fallen 207 points (or 0.7%), while 0.8% were lower and 1.2% were higher.

Walt Disney stock is expected to be under focus due to its close to 5% drop at the two-year mark in reaction to lower-than-expected earnings on Wednesday. That’s despite the fact that its Disney+ streaming network – under much scrutiny in the wake of Netflix’s shock subscriber decline in the first quarter – added nearly 8 million new subscribers, well above expectations.

Softbank (OTC), which suffered a loss of $13 billion for its fiscal year ended with a huge writedown on large-scale holdings, such as Didi Global ride-hailing, Grab, and DoorDash food delivery, should be compared to any disappointment at Mouse House. Softbank stock fell 8% overnight in Tokyo.

4. SEC probes Musk’s Twitter disclosures – WSJ

The Securities and Exchanges Commission is investigating Elon Musk’s late disclosure of his stake in Twitter, according to The Wall Street Journal, which cited people familiar with the matter late on Wednesday.

Musk made public the size of his purchase 10 days after SEC rules allowed. This allowed him to buy more stock, without others being aware.

The news is unlikely to help smooth Musk’s planned acquisition of the social media platform, given its already-contentious political dimension. Another problem is the continuing decline in Tesla stock value (NASDAQ.) which Musk planned to use as collateral for his purchase loan. It is expected that Twitter stock will open at $45.26, its lowest price since Musk’s offer to make the company public at $54.20 per shares.

5. The IEA cautions against continued tightening in the fuel market, despite oil prices falling

Crude oil prices dropped on Wednesday as global growth worries weighed on risk assets all over the globe.

At 6:30 AM ET prices had dropped 1.6% to $104.02/barrel, and 1.5% to $105.87/barrel

International Energy Agency released a monthly report earlier on the state the oil market. They kept their forecasts about global demand and supply fairly steady, but they warned that there may be more pressure in months ahead due to rising Chinese demand after a series of Covid lockdowns.