Weekly Market Recap

Published Apr. 16, 2022
Weekly Market Update- 16 April

WEEKLY MARKET SUMMARY

Dow Jones S&P 500 Nasdaq
34,451 (-0.34%)
4,392 (-2.26%)
13,351 (-3.47%)

Elon Musk is no longer a member of the Twitter board of directors.

Twitter shares fell in premarket trading Monday after CEO Parag Agrawal announced Elon Musk’s resignation from the social network’s board of directors in a tweet late Sunday night. According to securities filings made public last week, Musk, the CEO of Tesla and the privately owned rocket company SpaceX, has become Twitter’s biggest individual stakeholder. Musk’s proposed nomination to Twitter’s board of directors has spurred speculation about how the world’s richest man and frequent tweeter could affect the company.

According to Agrawal, Musk did not provide specific reasons for rejecting to become a Twitter director. While Agrawal warned of “imminent distractions,” he also claimed that Twitter will “remain receptive” to Musk’s ideas.

The 10-year Treasury yield has risen to its highest level since December 2018.

The 10-year US Treasury yield hit 2.82 percent on Tuesday morning, its highest level since December 2018, before dipping to 2.798 percent. The yield fell to 2.73 percent after the Labor Department issued the March consumer price index data at 8:30 a.m. ET.

Treasury yields, which move in the opposite direction of prices, have recently climbed dramatically. As recently as March 7, the 10-year US Treasury yield was less than 1.7 percent. However, as the bond market braces for more aggressive Fed policy tightening, rates have climbed. In March, the Federal Reserve of the United States raised interest rates for the first time in more than three years, with another increase predicted in May.

The March CPI indicates the highest inflation since 1981.

According to the Labor Department, the consumer price index increased 8.5 percent year on year in March, the largest rise since December 1981. This is somewhat more than Dow Jones’ prediction of 8.4 percent. The core CPI, which excludes food and energy, increased by 6.5 percent, meeting expectations.

For months, the CPI, which measures a broad variety of goods and services, has been at its highest levels in decades. The Fed’s policy tightening is an effort to manage historically high inflation.

According to the report, energy costs jumped by 11% month over month and 32% year over year in March. Following the huge oil price spike in early March, which was connected to the Russia-Ukraine war, economists projected such a significant increase. Monthly housing expenditures climbed by 0.5 percent, while yearly housing costs grew by 5%.

In March, wholesale inflation increased by 1.4 percent.

The Labor Department said on Wednesday that wholesale inflation jumped by 1.4 percent in March, beating Dow Jones’ projection of 1.1 percent. The producer price index increased 11.2 percent year on year, the largest rise since data collection started in November 2010. Wholesale inflation jumped by 10% year on year in February.

The so-called core PPI, which excludes food, energy, and trade services, rose by 0.9 percent in March. This is greater than the 0.5 percent projected by the Dow Jones. In February, the core PPI increased by only 0.2 percent month on month.

Following the release of the consumer price index on Tuesday, which indicated a headline rise of 8.5 percent over the previous year, the data gives yet another insight into the inflationary pressures hitting the US economy. While the PPI is not as frequently watched as the CPI, wholesale pricing may influence how much consumers spend at the register.

Earnings season begins with JPMorgan and Delta Air Lines.

Earnings season kicked off in earnest on Wednesday morning, providing investors with a deluge of fresh data on the economy and consumers.

JPMorgan Chase & Co., the biggest bank in the United States by assets, reported higher-than-expected revenue and profits per share of $2.63. It also suffered a $524 million loss as a result of market disruptions induced by Russian sanctions, and CEO Jamie Dimon indicated in prepared comments that the US economy faced “serious” issues in the future.

Delta Air Lines’ shares jumped in premarket trading after the Atlanta-based airline said that it anticipated to turn a profit this quarter. Bookings and prices are growing, helping to offset rising gasoline expenses. Delta’s first-quarter loss was smaller than expected, while revenue above projections.

Elon Musk has made a bid to acquire Twitter and take it private.

Elon Musk, the CEO of Tesla and the world’s richest person, made a bid to acquire Twitter for $54.20 per share, only days after withdrawing from the social media company’s board of directors. Musk, the company’s biggest individual shareholder, is a regular tweeter with over 81 million Twitter followers. (Since then, Vanguard has raised its stakes and is currently the company’s largest shareholder.) Musk said in a letter to Twitter Chairman Bret Taylor that he thinks Twitter should be the “platform for free expression throughout the globe,” but that it cannot be “in its present shape.” “Twitter must be spun off into a private company,” he wrote. Musk’s proposal values Twitter at roughly $43 billion.

The news, which was reported in a filing with the Securities and Exchange Commission, pushed Twitter shares up more than 12% in premarket trading on Thursday. Tesla’s shares fell by almost 1.3 percent.

China has resumed the approval of video game licenses.

China’s videogame regulator has granted publication licenses to hundreds of new games, putting an end to a months-long freeze in the world’s biggest mobile gaming industry. The prohibition has been in effect since July of last year, when Beijing tightened industry restrictions.

45 Chinese videogames were authorized last week, according to a statement released on the National Press and Public Administration website on Monday.

Among the titles accepted are Baidu Inc.’s “Bang Bang Rabbit” and XD Inc.’s “Flash Party.” Tencent Holdings Ltd., NetEase Inc., and Bilibili Inc. do not have any games on the list. On Monday’s list, there are no games from international developers. For the first time, the regulator granted permissions to imported games in June 2021.

In August of last year, the agency issued strict new restrictions restricting gamers under the age of 18 to one hour of video game play on Fridays, Saturdays, and Sundays, as well as public holidays. According to the new regulations, users under the age of 18 were restricted to 90 minutes of play time on weekdays and outside of the hours of 10 p.m. to 8 a.m.

Authorities established the limitations to fight juvenile gaming addiction, which they blamed for wreaking havoc on young people’s physical and mental health as well as diverting them from school and family commitments.

Wells Fargo’s quarterly profit drops by 21%.

Despite increased lending and the release of more than $1 billion in reserves for future losses, Wells Fargo & Co.’s earnings decreased 21% in the first quarter.
The San Francisco-based bank posted a $3.67 billion first-quarter profit, down from $4.64 billion a year earlier. Earnings per share were 88 cents, more than the 81 cents predicted by FactSet’s expert survey.

The bank’s revenue was $17.59 billion, a 5% decrease from $18.53 billion the previous year. $17.78 billion was slightly less than expected.

Profit and revenue declines in banks signal the end of the pandemic-era profit bubble. For the previous two years, the country’s major banks have been propelled by frantic trading, a thriving deal market, and profitable mortgage industries. That is no longer true. JPMorgan Chase & Co. reported a 42% drop in first-quarter earnings on Wednesday. On Thursday, Morgan Stanley, Goldman Sachs Group Inc., and Citigroup Inc. all reported lower earnings.

UnitedHealth Group Reports Higher Quarterly Revenue and Increases Earnings Guidance

The bank’s revenue was $17.59 billion, a 5% decrease from $18.53 billion the previous year. $17.78 billion was slightly less than expected.

 

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