Stock news, current events in the stock market and policy intervention
The stock market yesterday experienced a slight upward correction on the way to a downward correction. Investors are quietly watching what happens. Speculators nervously twitch in different directions. Gold fell 3% yesterday - its biggest drop in almost 2 years - to $2,315. Taking profit from mitigating geopolitical risks. Stocks in Hong Kong rose for the second day in a row. Dollar, crypto and futures are stable.
- Chinese quantum funds (investment funds whose securities are selected using quantitative analysis) are rapidly expanding their activities abroad. As domestic competition heats up and regulators tighten their grip on the $260 billion sector - Reuters. Basic lending rates in China remained unchanged. The rate on loans for a period of 1 year was maintained at 3.45%. The rate on 5-year loans is 3.95%.
- Details have emerged about the Grayscale Bitcoin Mini Trust - a mini-fund that Grayscale plans to launch: The fund will charge a commission of 0.15% per annum (versus 1.5% per annum for GBTC) - the lowest commission among BTC ETFs. The fund size will be 63.6 thousand BTC (the 4th largest ETF at the moment), assets will be transferred from the Grayscale BTC ETF. The GBTC fund currently holds 304.9 thousand BTC, but since the launch of the ETF, it is Grayscale that has experienced the largest outflow of funds.
- Apple is close to completing a deal with FIFA for television rights to the new tournament, NYT reports. Even more interesting is that Apple may completely abandon physical buttons on the iPhone this year. The company has placed an order for modules that allow the iPhone 16 to replace physical buttons on both sides with capacitive ones. Journalists assessed the insider realistically, but were skeptical that Apple would implement the plan this year.
- Tesla shares fell 3%. As recent global price declines have heightened Wall Street's concerns about the electric vehicle maker's shrinking margins ahead of its earnings report later this week.
- Li Auto shares fell 6% after the Chinese electric vehicle maker also cut prices in China.
- Verizon Communications (VZ) shares fell 5%. The telecom company said it lost 158,000 users in its postpaid consumer wireless phone business in the first quarter, an improvement from the 263,000 users it lost a year earlier. Verizon also reported first-quarter adjusted earnings of $1.15 per share, 5 cents lower than it reported a year earlier but better than analysts' expectations of $1.12. However, revenue of $32.98 billion fell short of forecasts of $33.23 billion.
- Following the Bitcoin halving, Coinbase Global shares rose 7% yesterday.
- Shares of Bitcoin miner Riot Platforms rose 23%.
- Newmont (NEM) and Barrick Gold (GOLD) shares fell 4%.
- Gold prices fell sharply as military tensions in the Middle East eased and investors turned to riskier assets and left safe havens.
- Cardinal Health (CAH) shares fell 5%. The company said it will not renew its distribution contract with pharmacy benefit manager OptumRx.
- SAP shares are neutral after the good report. SAP repeated its financial forecast for 2024.
- The US Federal Trade Commission has blocked the $8.5 billion merger between Tapestry and Capri, allegedly limiting competition in the market for less expensive luxury handbags. Tapestry owns the Coach and Kate Spade brands. Capri owns the Michael Kors and Jimmy Choo brands. Shares are neutral.
- CDNS shares fall 6% after the report. The operating system that powers Meta Quest headsets can now be used by third-party hardware manufacturers. Meta Platforms announced on Monday.
- The British FTSE 100 stock index has reached an all-time high. The boom is partly due to the cheap pound and expectations that the Bank of England will soon cut interest rates.
- ECB officials are sticking to plans to cut interest rates several times this year. Even as higher US inflation delays a turn to more accommodative policy by the US Federal Reserve, and tensions in the Middle East are keeping oil prices high - Reuters.
- Economist (on investment policy): Politics are increasingly influencing investment preferences. Investors express their political preferences with money. Those investors who support their party will not invest in shares of companies supported by another party.
Funds already have a significant influence on company policies, with ESG funds serving as an example.
These preferences create difficulties for financial institutions that need to take into account political factors. This increases the risk for investors and the market as a whole.
Despite all the differences between Joe Biden and Donald Trump, they share bipartisan concerns about China flooding global markets with cheap goods.
Biden is calling for higher tariffs on selected Chinese sectors. Trump wants to raise tariffs by 60% on all goods.
Debate continues over the proposed $14 billion sale of US Steel (X) to Japanese giant Nippon Steel. Both Biden and Trump oppose the deal, another front where the usual party alliances have been fractured.
- UBS downgraded the rating of AAPL, AMZN, GOOG, META, MSFT, NVDA stocks from Outperform to Overperform.
- Investors are waiting for a new “big topic” from American investment banks.
- The New York Stock Exchange is considering trading 24/7 - FT