MARKET MOVERS
- U.S. producer prices jump 11.2% from a year ago, the most on record. Excluding the volatile food and energy components, the so-called core PPI increased 1% from a month earlier and was up 9.2% a year ago. That stands in contrast to the latest consumer price report which showed a softening in the pace of core inflation. The PPI and CPI reports reinforce pressure on the Federal Reserve to raise interest rates more aggressively. Read more here.
- Oil futures rose as Putin vows to continue the war. Putin on Tuesday said Russia “had no other choice” but to launch what he has termed a “special military operation,” pledging it would “continue until its full completion and the fulfillment of the tasks that have been set.” Russian oil and condensate production had fallen below 10 million barrels a day on Monday as a result of sanctions and logistical problems. Read more here.
- Biden’s Ethanol boost energizes farmers and worries meat producers. Corn farmers and ethanol makers look for a bump in demand from summertime E15 sales while chicken producers fear higher grain costs. The ew Biden administration move will allow gasoline with 15% ethanol to be sold between June 1 and Sept. 15 to help ease prices for consumers. E15 consumption is expected to increase by about 300 million gallons in 2022.
- JPMorgan's profit sinks 42% after a pandemic boom. The nation’s biggest bank earned $8.28 billion, or $2.63 per share, compared with $14.3 billion, or $4.50 per share, a year ago. About one-third of the funds set aside for potential credit losses are tied to Russia, Chief Financial Officer Jeremy Barnum said, and the rest is to account for the risk that Federal Reserve rate increases tip the economy into recession.
- BlackRock's profit increases 20%. The firm ended 2021 with over $10.01 trillion in assets—the first time any money manager has reached that number—but market conditions in the last three months changed drastically. With inflation climbing to its highest levels in the last four decades, investors’ faith in the markets is low as evidenced by slowing inflows of $86 billion, down from $172 billion last year.
- GM and Ford join Tesla in securing EV batteries. GM and others, including Tesla, are using other battery chemistries—such as lithium-iron-phosphate—that help reduce costs. On Tuesday, General Motors signed a cobalt supply deal with global mining giant Glencore. On Monday, Ford said that it had signed a supply agreement with lithium miner Lake Resources. Meanwhile, Tesla has had its own battery manufacturing joint ventures for years. Read more here.
- US banks are set for a big hit to revenues as dealmaking dries up. This week, US banks report their latest quarterly earnings, with JPMorgan kicking things off. And results are likely to show that the blockbuster days of the pandemic are in the rear-view mirror. They’re blaming a lot of that on Russia’s invasion of Ukraine, and the subsequent market volatility has really dampened the appetite to do deals and do transactions. Source(1:37)
WHAT TO WATCH
- Google plans to invest $9.5 billion in U.S. offices and data centers. The expansion will lead to at least 12,000 new full-time Google jobs by the end of the year, and thousands more among its network of local suppliers, partners, and communities. The tech giant said doing so will make for better products, a greater quality of life for employees, and stronger communities.
- Meta plans to take a nearly 50% cut on virtual asset sales in its metaverse. The 47.5% figure includes a hardware platform fee of 30% for sales made through the Meta Quest Store. On top of that, Horizon Worlds will charge a 17.5% fee. Meta’s fees for the sale of virtual assets on Horizon Worlds are significantly more than the 30% Apple charges developers on its App Store. Read more here.
- GSK to buy cancer-drug maker Sierra Oncology for $1.9 billion. Sierra is developing treatments for rare types of cancer, including myelofibrosis, and announced in January that momelotinib met the primary and secondary endpoints in Phase 3 clinical trial evaluating the experimental therapy as a treatment for myelofibrosis. GSK anticipates that momelotinib will start generating sales to its specialty medicines business by 2023.
- Rising home prices are expected to drive record purchase loan volume. It's expected to drive a record $1.72 trillion in purchase mortgage originations in 2022, even though rising mortgage rates could put a dent in sales of existing homes. While purchase loans are expected to continue growing and setting new records in 2023 and 2024, MBA forecasters don’t see refinancing rebounding until 2024. Read more here.
