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Elon Musk will no longer be joining Twitter's (NYSE:TWTR) board of directors, according to CEO Parag Agrawal, who tweeted the update overnight. TWTR slid 7% premarket on the news, marking the latest bout of volatility to hit the stock. Shares had skyrocketed 30% in the two sessions since Musk disclosed his stake last Monday, but have since lost 9% into Friday's close.
Cold feet? Agrawal gave more of a timeline than a reason for the abrupt departure, saying Musk informed the board as his appointment went into effect on April 9. "I believe this is for the best," Agrawal wrote. "We have and will always have input from our shareholders whether they are on the Board or not. Elon is our biggest shareholder and we will remain open to his input."
Musk has been throwing out many ideas for the platform since taking a 9.2% stake in Twitter last Monday. Over the weekend, he suggested that "everyone who signs up for Twitter Blue (ie pays $3/month) should get an authentication checkmark" and "no ads. The power of corporations to dictate policy is greatly enhanced if Twitter depends on advertising money to survive." Musk has also conducted several polls, including "delete the w in twitter?" and "Convert Twitter SF HQ to homeless shelter since no one shows up anyway."
From the SA comments section: "Does it mean the SEC was going to come down on him? Or that he wants more than 14.9%? Or that he'd have been gagged from commenting about the company while seated? Was the offer of a seat a clever way to control him?" asked Seriol. "Hopefully this means Elon is going the hostile takeover route," added user asm12345. "Pump and dump," countered grewalg87, while Frank30 remarked, "Lol. Bizarre is an understatement describing this guy." (70 comments)
In a replay of the 2017 presidential election, French voters have advanced incumbent Emmanuel Macron and candidate Marine Le Pen to the second round of a runoff election. The two-round system has been in place since a 1962 referendum, and while it is costly, many cite benefits like the prevention of vote splitting or giving the opportunity to elect candidates with the most winning potential. French elections only proceed to a second round if in the first no candidate received more than 50% of vote, which is rare for presidential elections but sometimes occurs in local ballots.
Results: Macron landed 28.2% of the estimated vote ahead of Le Pen with 22.9%. The two will now face each other in an April 24 rematch that will decide whether Macron will stay in power. In recent surveys, Macron led Le Pen in the runoff by just 2 percentage points, down from a double-digit lead a month ago.
The two differ heavily on political policy, like immigration and France's role in Europe, and are both wrangling over the cost of living and the economy. Record high inflation has seen Macron order a cap on electricity and natural gas prices, though the measures haven't stopped Le Pen from climbing in the polls. "I'll put money back in your pockets," she declared, promising to cut taxes on fuel and other essentials, while giving businesses incentives to raise wages.
Outlook: Eurozone inflation soared to 7.5% Y/Y in March, hitting a record high for the fifth straight month. A big part of that number has been driven by energy and food prices, with Russia accounting for about 40% of the EU's imports of natural gas and Ukraine being known as the "Breadbasket of Europe." "Inflation keeps on coming in stronger than we’ve expected and all the other forecasters have expected," noted Jack Allen-Reynolds, economist at Capital Economics. "So that implies there will be an even bigger hit to household incomes and possibly a bigger hit to consumption." (1 comment)
Been on a flight recently? There have likely been delays, and that's if you even get on a plane (cancellations have been through the roof). The developments have prompted "camping out at the airport" to trend across the country, while hours-long waits for customer service have left many passengers with a sour taste of the whole traveling experience. Severe storms have not made things any better, while COVID-19 still looms large as many employees call out sick.
Case in point: JetBlue (NASDAQ:JBLU) scrapped more than 300 flights over the weekend, with nearly a fifth of all its flights canceled on Saturday. That's on top of hiring 2,500 workers this year and perks to keep staff on the job. It's now offering a $1,000 bonus to flight attendants who don't call out of work through May 31, as well as an extra $100 per trip for attendants who pick up open flights on days off.
"We've already reduced May capacity 8-10% and you can expect to see a similar size capacity pull for the remainder of the summer," JetBlue COO Joanna Geraghty declared. "Despite these challenges and, based on your feedback that the schedule is wound too tight, we know the best plan is to reduce capacity now. I think everyone recognizes that the industry still remains very much in recovery mode, so we believe this proactive step is the right decision."
Go deeper: It's not the only carrier facing heat. Last week, Alaska Airlines (NYSE:ALK) said it would trim its flight schedule through the end of June to catch up on pilot training. "We've recently let down some of our valued guests by canceling an unusual number of flights. The primary cause of cancellations is the shortage of pilots available to fly versus what was planned when we built our April schedule in January." (5 comments)
Ahead of bank earnings and inflation data later in the week, investors are keeping their eyes on the 10-year Treasury yield, which continues to spike to multi-year highs. Early Monday, the rate climbed 5 basis points to 2.76%, notching a level last seen in 2019. The momentum gathered pace last week after Fed Vice Chair Lael Brainard said the central bank's balance sheet would be reduced "at a rapid pace" as soon as May, only to be followed up by similar sentiment during the release of FOMC minutes.
Commentary: "Fed tightening is the single biggest theme in global markets right now," said Nomura rates strategist Andrew Ticehurst. "Yields are making fresh highs, so we are likely seeing stops and technical trading contributing to this move."
The tightening cycle in the U.S. is also making way for some interesting shifts as policy diverges across the globe. The yield on China's 10-year government bond fell to 2.75% overnight, marking the first time it has been below the rate of its U.S counterpart in 12 years. The fading premium comes as Beijing sticks to an accommodative monetary stance as prolonged COVID-19 lockdowns - like the one in Shanghai - weigh on its economy.
Ominous signs? While 5-year and 30-year U.S. Treasury yields remain inverted, the 2s10s curve has steepened since the beginning of April after briefly inverting for the first time since 2019. That was followed by the COVID downturn of 2020, though the last persistent inversion of the Treasury curve occurred in 2006-2007.
In Asia, Japan -0.6%. Hong Kong -3%. China -2.6%. India -0.8%.
In Europe, at midday, London -0.2%. Paris +0.7%. Frankfurt -0.4%.
Futures at 6:20, Dow -0.1%. S&P -0.4%. Nasdaq -0.8%. Crude -2.6% to $95.70. Gold +0.8% to $1961.70. Bitcoin -2.5% to $41,460.
Ten-year Treasury Yield +5 bps to 2.76%
Today's Economic Calendar
9:30 Fed's Bostic Speech
12:00 PM Fed's Williams Speech
12:40 PM Fed's Evans Speech
1:00 PM Results of $46B, 3-Year Note Auction
Companies reporting earnings today »
What else is happening...
Earnings season: Banks to reflect strong consumer, weak capital markets.
Shopify (SHOP) sets stock split, updates governance structure.
Cyber firm SailPoint (SAIL) to be acquired by Thoma Bravo for $6.9B.
Turning Red picks up streaming ratings leadership for Disney+ (DIS).
Demand for COVID-19 shots falls amid reluctance to boosters.
China's producer inflation goes on a rip as lockdowns bite.
Rising material costs: NIO (NIO) follows other EV makers in hiking prices.
Shell (SHEL) joins forces for EV charging across China and Europe.
Tesla (TSLA) bull Ron Baron sees 3x-5x on his investment in 10 years.
Default looms? Russia halts bond sales for the rest of 2022.