MARKET MOVERS
- Tesla is getting into the used car business. The electric vehicle pioneer has put a trade-in value estimator on its website. Once an owner types in the VIN number, it’s just a click to get an estimate. Offering to buy used Teslas can benefit the company in a couple of ways. For starters, it can drum up demand for new Teslas. And selling used cars is pretty profitable these days.
- The only winner here so far is Elon. He not only sold Tesla at a higher valuation but he could get a lower price for Twitter or simply walk away. Assuming that he never intended to buy Twitter in the first place, he created a way for him to legally sell his Tesla stock without upsetting shareholders. On the other hand, he might be using the up and down to get a much lower price on the asset. Read more here.
- Bond yields slide as COVID restrictions return in China. A reduction in broader market risk appetite encouraged investors to seek government bonds. This follows news that China is battling a new COVID-19 strain, which has raised fears that the world’s second-biggest economy will take another hit to growth. Almost 30 million people were reported to be under restrictions.
- Natural-gas futures gain more than 6% on the shutdown of a key European pipeline. Prices for natural gas climbed sharply, underpinned amid a planned 10-day maintenance shutdown of the Nord Stream 1 pipeline and a widespread area of much above normal U.S. temperatures. The pipeline shutdown is raising concern that gas deliveries through the vital European pipeline may not be turned back on again if Russia retaliates. Read more here.
- GPU sales are slowing in the U.S., Russia, and China, according to a Piper Sandler analyst. Piper Sandler analyst Harsh Kumar thinks sales of Nvidia's GPUs could slide as consumers cut back on spending, cryptocurrency mining slows, and other macro events hurt demand. Nvidia stopped selling chips in Russia after the country invaded Ukraine, and spending for chips in China has slowed due to ongoing COVID-19 lockdowns there. Read more here.
WHAT TO WATCH
- Twitter says Musk’s request to terminate the deal is invalid. The social media company said Monday in a letter that Elon Musk’s bid to terminate his proposed $44 billion acquisition of the social media company is “invalid and wrongful.” Twitter's lawyer says “Twitter reserves all contractual, legal, and other rights, including its right to specifically enforce the Musk Parties’ obligations under the Agreement.”
- Lumber futures are getting a makeover. Exchange operator CME Group Inc. is rolling out a new lumber futures contract aimed at boosting the trade in two-by-four derivatives, which has dwindled in recent years and exacerbated wild swings in America’s benchmark price for wood. CME said it plans to launch the new futures under the ticker LBR early next month.
- The market’s recent bounce will likely be short-lived due to the strong dollar. The dollar index, which measures the greenback’s performance against six other major currencies, is up more than 17% year over year and 12.6% for 2022. This dollar strength is just another reason to think earnings revisions are coming down over the next few earnings seasons. Read more here.
- The percentage of immediate home sales has slowed to 22.7%. This means that nearly a quarter of the homes for sale are selling immediately. This is most likely because they are going into a bidding war. With that being said, the percentage is still going down. It was around 33% back in December 2021. 22.7% is still high but not as strong as it was when interest rates were low. Source(18:43)
- Chip giants to build a factory in France as the global supply race rolls on. GlobalFoundries Inc. and STMicroelectronics have teamed up. The factory in Crolles in southeastern France would be jointly operated by the two chip makers and receive what they described as major financial support from the French government. The three parties plan to invest a total of more than $5.7 billion in the plant, which they said should open by 2026.
