MARKET MOVERS

  • Elon Musk sells $8.5 billion of Tesla shares after deal to buy Twitter. The Tesla chief executive reported selling a total of more than 9.6 million shares Tuesday through Thursday, at prices between around $820 and $1,000 a share, the filings show. That left him with around 163 million shares in the electric-vehicle maker or nearly 16% of the company. He is on the hook to come up with $21 billion in cash to finance the Twitter deal.

  • U.S. economy shrank in the first quarter. The decline in U.S. GDP at a 1.4% annual rate marked a sharp reversal from a 6.9% annual growth rate in the fourth quarter. The first quarter was the weakest since spring 2020. The drop stemmed from a widening trade deficit. Imports to the U.S. surged and exports fell, dynamics reflecting pandemic-related supply-chain constraints. There was also a slower pace of inventory investment by businesses.

  • U.S. inflation rate surges to 6.6%, PCE index shows. The Federal Reserve’s preferred measure of inflation rose a sharp 0.9% in March, but the increase largely stemmed from a surge in the cost of gas and there were some signs that intense price pressures could be starting to ease. Over the past 12 months, the personal consumption price index has climbed 6.6%, up from 6.4% in February. Read more here.

  • Apple’s big quarter shows that smartphones aren’t hit by weakening macro conditions. Apple sold more than $50 billion in iPhones in the quarter, and the ceiling for the company remains on how many devices it can make. The results suggest that the premium smartphone market could be resilient if macroeconomic conditions deteriorate and consumers start watching their expenses. Read more here.

  • Amazon projects slower growth, raising fear of consumer letdown. Overcapacity, inflation and supply issues drive costs higher. Revenue from main e-commerce business declines 3% in the quarter. A hiring and warehouse-building binge during the pandemic are catching up with the company. That reality will weigh on revenue and profit going forward as consumers return to their pre-pandemic habits and inflation may cool their spending.

  • Exxon triples buybacks and Chevron posts best profits since 2012. ExxonMobil said it would triple its share buyback programme to $30bn and Chevron reported its most profitable quarter since 2012 of $6.3 billion as surging crude and natural gas prices after Russia’s invasion of Ukraine delivered a windfall for American Big Oil. High commodity prices, combined with relatively low capital spending, have delivered an influx of free cash flow for the oil majors.

  • Demand doubles for ARMs. The share of mortgage applications with adjustable-rate mortgages doubled last week when compared to three months ago. ARMs, which start at one rate and then fluctuate after a set period, comprised more than 9% of loans and 17% of the dollar volume. The latest lower introductory rates from ARMs may grow more enticing as home buyers watch other rates quickly climb. Read more here.

  • Seller profit margins dip. The profit margins on median-priced single-family home sales across the U.S. fell to 47.2% in the first quarter. It was the first quarterly decline since late 2019 and the largest in a decade. The first-quarter profit margin was down from 51.6% in the fourth quarter of 2021. Ultimately, as affordability worsens, price appreciation should slow down.

  • Dollar surges to highest level in 20 years. Currency traders are betting that the Fed will continue raising rates well ahead of other central banks. They piled into the dollar and sent the greenback to a 20-year high. his has been a big move since the start of the year against the other major currencies. A lot of this is about the Gulf in monetary policy that’s expected to open up between the US and the rest. Source(2:57)

WHAT TO WATCH

  • Consumer spending should still be a positive for Q2 but not in Q3 and Q4. The risks are rising that we start to see negative numbers again that is the bottom line with the US economy. We're approaching a breaking point of the consumer saying no with these price increases relative to wage gains. We're progressing towards that breaking point in either Q3 or Q4. Source(10:10)

  • Intel CEO sees chip shortage lasting into 2024. CEO Pat Gelsinger said the global chip shortage he had previously forecast would stretch into 2023 is now likely to last even longer as chip-makers struggle to buy enough manufacturing equipment and to boost production to meet demand. That’s a supply statement because equipment shortages are really impinging the ability of the industry overall to ramp supply.

  • World’s biggest property investors plan to buy into life sciences. Some of the world’s biggest property investors are planning to spend billions of dollars on labs and offices for the booming life sciences sector. Property developer and investor Tishman Speyer and biotechnology investment firm Bellco Capital have raised $3 billion to develop and buy buildings for life sciences. After the US, their main target will be property in the UK.
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