EU Bans Russian Crude Imports

• 3 min read
EU Bans Russian Crude Imports

MARKET MOVERS

  • Oil prices jump after the EU bans most Russian crude imports. European Union leaders hammered out a deal to punish Russia. The watered-down embargo covers Russian oil brought in by sea, with a temporary exemption for imports delivered by pipeline, required to bring Hungary on board. The EU said the agreement covers more than two-thirds of oil imports from Russia and should cut 90% of that country’s crude by the end of this year.

  • Tesla’s Shanghai plant is running at 70% capacity. The company will continue to operate its Shanghai facility in a closed-loop setting until early June, with workers isolated from the outside world because of local Covid restrictions. The 70% figure represents an improvement from recent reports. Tesla might deliver around 90,000 vehicles from the facility in the second quarter if it operates at 70% to 75% capacity in June. Read more here.

  • Activist investor Nelson Peltz joins Unilever's board. The company appointed Peltz as a non-executive director and confirmed his TrianFund Management holds a roughly 1.5% stake in the consumer-products company. Peltz will join Unilever’s board and become a member of its compensation committee beginning July 20. There is hope that Peltz can stimulate positive changes to culture, remuneration, and organizational structure as he did at P&G.

  • Fed fears hit mortgage bonds, attracting investors. Some investors who specialize in the normally placid agency market are raising new funds to buy up bonds on the cheap. Mortgage REIT Annaly Capital has raised about $3 billion in recent weeks to buy into the battered mortgage-bond market. Purchases of agency bonds at current prices are likely to yield annualized returns of 12% to 15%, up from around 10% at the end of 2021. Read more here.

  • Home prices surged over 20% in March, according to S&P Case-Shiller. Nationally, home prices were 20.6% higher than they were in March 2021. The 20-city composite saw a 21.2% year-over-year gain, up from 20.3% in the previous month. Regionally, Phoenix slipped from the top gainer spot for the first time in three years, with Tampa taking over. Tampa, Phoenix, and Miami continued to see the highest annual gains. Read more here.

  • Foreclosures and bankruptcies have been in decline. Jason Hartman says that right now, there is almost zero foreclosure activity. It's statistically insignificant from 2003 until now. It did go up just recently which the media made a big fuss about but the increase is still insignificant. Meanwhile, bankruptcies have also been in decline since the pandemic. Source(29:39)

WHAT TO WATCH

  • GSK to buy U.S. biotech Affinivax in a $3.3 billion deal. GSK looks to bolster its vaccine pipeline ahead of the planned separation of its consumer healthcare business. The U.K. drugmaker will make an upfront payment of $2.1 billion and up to $1.2 billion in potential development milestones. The deal is expected to close in the third quarter of 2022.

  • The NFL is planning to launch a live game-streaming app in July. It is a major blow to cable companies. It plans to air the same games available to football fans in their respective geographical markets. Live sports is one of the key reasons people continue to pay $80 per month (or more) for cable TV; however, it's a development that cable company investors can't afford to ignore. Read more here.

  • Qualcomm is eager to invest in Arm alongside rivals in the upcoming IPO. The US chipmaker wants to buy a stake in Arm with its rivals after it lists on the New York Stock Exchange. The goal is to create a consortium so that Arm stays neutral. It’s important to note Qualcomm is one of Arm’s biggest customers. And it uses Arm’s IP for the chips it makes for smartphones, computers, servers, and much more. Source(1:13)

  • The bottom is unlikely for now. There is a lack of critical data needed to make that determination. One of the good news to come out lately is the reopening in Shanghai continues and Beijing has avoided major lockdowns. Meanwhile, Russia/Ukraine has no resolution yet with commodity prices remaining elevated. There are also some signs inflation may be peaking, but we don’t know how much it may be slowing. Read more here.
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