Tuesday Apr 5 2022 08:05
6 min
Elon Musk takes stake in Twitter. That’s it. That is the story. And of course, Matt Levine got in there first. But let’s try do this anyway.
So many things going on here…
Tesla shares rose over 5%. Piper Sandler reiterated his $TSLA rating of Overweight (Buy) following the first quarter delivery numbers.
Starbucks does the unthinkable: cancels buyback to invest in growing the business. Shock, horror. Didn’t they get the memo? Shares fell 5%. Which kind of begs a question: is your fiduciary duty as the board mean you ought to do buybacks at the expense of capex? If that is so, then what is the point of capital markets?
Lots of chatter about Europe finally banning Russian gas…seems the appetite is not there yet in Berlin. Germany’s finance minister said it is ‘not possible’ for now to cut Russian gas supply, ‘we need some time’. Time for more massacres? Halting Russian gas would hurt EU more than Russia, he says. Russian oil and coal is on the table, but not gas; yet.
Oil prices rose Monday, perhaps on sanctions chatter but also Aramco raised its official selling price for the key Arab Light to the Far East to a premium of $9.35 over Dubai.
Stocks rallied on Monday with the Nasdaq climbing 1.9%. The Golden Dragon index of US listed Chinese companies rallied more than 7% on Monday after the China Securities Regulatory Commission said it would change the law to enable Chinese companies to share documents with overseas authorities. European indices are flat this morning.
Market pricing now sees the Fed nudging rates above 3%, with some 100 bps of rate cuts priced in starting in 2024. At 2.5% priced in by the end of 2022, the market is now well above the FOMC dot plot. JPM says recent comments by Fed officials suggest a faster response may be preferred. As such, the bank says it is replacing its expectations for 25bp hikes in May and June with 50bp moves, reverting to 25bp hikes in July and thereafter
On crypto, the Royal Mint is making an NFT and Rishi Sunak, for it is he, wants to position the UK as a global crypto tech hub. Which is hard since derivative trading of cryptos is banned. But anyway.