MARKET MOVERS
- Powell signals half-point rate increase in May. He also indicated similar rate rises could be warranted after that to lower inflation. The Fed will also formally announce plans at the May 3-4 meeting to begin shrinking its $9 trillion asset portfolio in June, a double-barreled effort to remove stimulus to curb price pressures that are at a four-decade high. Read more here.
- Stripe jumps into crypto in partnership with Twitter. Online payments firm Stripe says it will start offering merchants the ability to pay their users in cryptocurrency through the stablecoin USDC. Starting Friday, Twitter will let a certain number of creators receive their earnings from its paid Ticketed Spaces and Super Follows features in crypto.
- Investors just pulled a massive $17.5 billion out of global equities. Bank of America cautioned that those outflows could well deepen. Since Nov. 2021, Nasdaq peak inflows to stocks have occurred in 16 of 20 weeks, for a total of $229 billion, while private clients bought stocks 17 out of 20 weeks. The weekly outflow came as money flowed back into buying the technology sector dip. Materials, meanwhile, marked a record 8-weeks of inflows. Read more here.
- Foreclosures hit a post-pandemic high during the first quarter of 2022. The number of U.S. properties with a foreclosure filing during Q1 was up 39% from the previous quarter and up 132% year over year to a total of 78,271 properties. U.S. foreclosure activity hit a new high not seen since the start of the COVID-19 pandemic, as foreclosures continue to rebound following the lapse of federal moratoriums, according to data from Attom.
- Stalled new-home projects jump 47%. Labor shortages and global supply chain bottlenecks are delaying the completion of many new-home construction projects. The delays were most prominent in the Northeast, where delays more than doubled. The headwinds are coming at a time when new-home construction has been in demand among home buyers who have been frantic to find greater housing inventory.
- Tesla had a blowout quarter in Q1 earnings. The total revenue for Tesla is $18.7 billion up 81% year-over-year and up 6% quarter-over-quarter net income. Profit was 3.3 billion dollars, up seven and a half percent year over year and 43% quarter over quarter. They delivered 310 000 cars, up 68% year-over-year and up 1%. Elon himself was on the earnings call on Thursday. Source(2:22)
- Disruptive tech related ETF saw the largest decline. On the other hand, physical environment related themes saw an increase in AUM of $350 million. Disruptive technology related themes saw the largest AUM decline of $1.6 billion followed by those related to people and demographics minus $420 million. At a theme level, cybersecurity and clean tech led the gains while emerging markets internet saw the largest decrease in AUM. Source(48:09)
- The Yen is collapsing. It is down 12% in the last 35 days. That is one of the largest moves in a generation. The Japanese economy is largely an import economy. They import everything from what can be bought in stores to what parts a Toyota needs to make cars. Everything is now 12% more expensive in the last month and that is a huge shock to the Japanese nation. Source(25:00)
WHAT TO WATCH
- Renault explores Nissan stake sale for EV shift. A move that could raise billions of euros for its shift to electric vehicles and ease long-standing tensions with its alliance partner. Nissan itself may be willing to buy some of the 1.83 billion shares in the Japanese automaker that Renault owns. Renault may also seek other acquirers for a portion of its 43% stake in Nissan.
- GM and Honda in talks to develop solid-state EV batteries. The companies have been discussing joint development of future batteries, though no decision has been made yet. The two already develop hydrogen fuel cells and EVs together, and Honda is a minority investor in GM’s self-driving vehicle startup Cruise LLC. Automakers are chasing this kind of battery due to more power, lower cost and reduced risk of fire.
- Elon Musk says funding is secured for his Twitter bid. In an SEC filing revealed Thursday morning, Musk says he has more than $46 billion in financing. He's reportedly willing to put $15 billion of his own fortune at risk while over $20 million will come from Morgan Stanley. This news came at the same time that Tesla reported a blowout quarter of earnings. Source(21:01)
- Everyone needs to watch the Japanese Yen. The largest country owner of treasuries is Japan. They own 1.3 trillion. If interest rates in Japan do something they haven't done in a decade-plus they actually go up, they will start to give real yield. The Japanese might opt to keep their money in the country as opposed to putting it in the US Treasuries. This might happen at a bad time when the Fed's doing QT, they've lost their biggest buyer. Source(29:57)
