MARKET MOVERS
- The House passes a bill to legalize Marijuana. The House bill called the Marijuana Opportunity Reinvestment and Expungement Act, or MORE Act, would remove marijuana from the list of scheduled substances and establish a process to expunge prior cannabis convictions. It also will impose a federal tax of 5% excise tax for the first two years, increasing by 1% incrementally each year in the next three years.
- SoftBank liquidates most of its SB Northstar portfolio. This is in response to losses of between $6 billion and $7 billion from the so-called ‘Nasdaq whale’ trades. Northstar’s investment manager, SB Management, held a bit more than $1 billion in U.S. listed stocks at the end of 2021, down from more than $17 billion a year earlier. The majority of their European investments were also dissolved during the same period. Read more here.
- Automakers report slowing U.S. auto sales. Analysts are forecasting that first-quarter sales for the automotive industry could drop as much as 16% over the prior-year period. Auto executives and dealers say underlying demand remains strong with most new cars and trucks sold almost as soon as they hit the lot. But supply-chain disruptions continue to weigh on factory production.
- House flipping is resurgent. Attom Data Solutions on Thursday reported that 323,465 single-family homes and condos were flipped in 2021, a 26 percent year-over-year increase and the largest number since the peak of the housing bubble in 2006. The supercharged housing market has made house flipping more popular than it’s been in years. Read more here.
- Borrowing costs jump as rates continue to increase. Rates have jumped from 3.76% to 4.67% in just March alone, significantly increasing the borrowing costs for buyers. The monthly payment for a median-priced home with a 30-year fixed-rate mortgage rose more than $170 in March due to higher rates. Still, even with the latest jump in mortgage rates, borrowing costs do remain low by historical standards. Read more here.
- Aave recently rolled out the version 3 (v3) upgrade for its network, introducing improvements for its DeFi services. Aave v3 has implemented "portals" features which allow for assets to be moved between any blockchain with Aave compatibility. The update also introduced isolated-markets services and a high-efficiency mode to improve functionality and the overall user experience.
WHAT TO WATCH
- EU parliament approves a bill to ban anonymous crypto transactions. EU Lawmakers voted in favor of draft rules that would grant authorities access to details on the sender and recipient in all crypto transfers. The proposal would effectively make anonymous crypto payments illegal. It not only covers transfers made through exchanges like Coinbase but also self-hosted or private wallets such as MetaMask. Source.
- 98% chance of a recession in the next two years. The yield curve inversion is fairly predictive. Historically, a recession is met when the yield curve inverts. There has been a better than two-thirds chance of a recession at some point in the next year and a greater than 98% chance of a recession at some point in the next two years. It needs to be inverted for at least 90 days typically for this to happen. Source(24:15)
- No recession — but a growth slowdown due to the Russia-Ukraine war, EU economics chief says. Paolo Gentiloni said that the Ukraine crisis will usher in a period of lower growth for the 19 countries sharing the euro. Gentiloni said the economic outlook hinged on three factors: the duration of Russia’s onslaught in Ukraine, whether sanction dynamics will spill over to Russia’s energy exports, and the impact on investor and consumer confidence which would mean a slow down but not a recession. Read more here.
- Demand for EVs will keep Lithium prices high. The EV market accounts for almost 80% of lithium-ion battery demand, according to a report from Jiayue Zheng. The lithium-ion battery market encountered shortages last year because of “thriving” EV market demand and rising raw-material prices. Battery supply won’t meet demand until 2023.
