Morning Reads
- Stock Rally Hits Wall After Earnings Disappoint
- JPMorgan Limits Segantii Exposure Amid Insider-Trading Case
- FTX Has Billions More Than Needed to Pay Bankruptcy Victims
- Hedge Fund Tycoon Loses Ruling Over $40 Million WWII Shipwreck Treasure
- Americans Are Racking Up ‘Phantom Debt’ That Wall Street Can’t Track
- Rents May Be Last Tamed in Inflation Fight
- Billions in Chips Grants Are Expected to Fuel Industry Growth
- Apple’s China iPhone Shipments Soar 12% in March After Discounts
- Google’s Pixel Leaves Little Room to Breathe for Sony Phones
- South Africa Moots New Coal-Plant Closure to Secure $2.6 Billion
- The Company Preaching America’s Nuclear Revival
- Activist Investor Seeks to Force Out Norfolk Southern’s Management
- TikTok’s Legal Bet on the First Amendment
- Uber Bookings Miss on Early Holidays, Weak Regional Demand
- Neutrogena Lost Dermatologists and Missed Out on the $42 Billion Beauty Boom
- How Uniqlo’s ‘Millennial Birkin’ Is Beating Designer Bags
- Premier League Strikes Deal With Fanatics on Trading Cards
- Refinery29’s New Owner Plans to Cover Sports, Buy More Media Companies
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PREMIUM
Prepper
Sweden is following Switzerland, Hungary, and the Czech Republic in easing monetary policy for the first time since hiking cycles began in 2022, when inflation surfaced in the aftermath of the COVID pandemic. The Riksbank overnight lowered its policy rate by 0.25 basis points to 3.75%, making it more likely that the ECB will also jump on the bandwagon. The shift is noteworthy to global investors as it highlights the current central bank divergence taking place across the world.
Press release: "When inflation approaches the target while economic activity is weak, monetary policy can be eased," Sweden's Riksbank said in a statement. "However, the outlook for inflation is uncertain. As inflation now falls from very high levels, there is uncertainty on both the upside and downside. The adjustment of monetary policy going forward should therefore be characterized by caution."
This contrasts with the wait-and-see mode of the United States, which is taking a more gradual path toward easing. Many in Europe are scared of getting stuck behind the curve as growth slows and unemployment rises. The housing market is also of concern, with many mortgages across the region carrying short-term variable rates, which can pinch the economy if interest levels stay elevated for too long.
Ahead of the Fed: There have been some worries that cutting before the U.S. could cause the krona or euro to lose value against the greenback, which in turn could lift dollar-denominated imports and even cause inflation to resurface. European policymakers seem to be less concerned about these effects, putting more of a focus on domestic conditions and not linking policy to other central banks. "I have said we are data dependent, we are not Fed dependent," ECB President Christine Lagarde declared at a press conference in April. (8 comments)
China tensions
TikTok and its Chinese parent, ByteDance (BDNCE), have sued the U.S. federal government to block a new law that would force the sale of the popular short-video app or face a ban in the country. TikTok said the bill violated the First Amendment right to free speech, adding that the divestment being demanded is "simply not possible." Things will likely head to the Supreme Court as Washington pushes ahead with efforts to protect its national security interests. The Biden administration is also revoking export licenses that allowed Qualcomm (QCOM) and Intel (INTC) to supply Chinese firm Huawei with chips for laptops and phones. (41 comments)
House of Mouse
Sliding 9.5% to $105/share, Disney (DIS) wrapped up its worst session in 18 months on Tuesday. The company reported a profit for its entertainment streaming division (Disney+ and Hulu), and forecast full combined streaming business profitability in FQ4 (including ESPN+). So what went wrong? SA Investing Group Leader Long Player believes the decline was an overreaction, driven by a combination of "sell on the news" and some fears about a Q3 loss from its Direct-to-Consumer business. Disney's box office and TV business might still be a problem, but does the pullback represent a buying opportunity? (20 comments)
Robotaxi rollout
Tesla (TSLA) CEO Elon Musk reportedly proposed testing Full Self-Driving software in China through robotaxis during his surprise visit to the country last month. While the government in Beijing was open to the proposal, Tesla would still need approval to collect and transfer data in China to train the software. Musk was also said to have sent one of his trusted lieutenants back to China to lead operations there, following back-to-back layoffs and executive exits. In other news, the U.S. NHTSA has threatened Tesla with $135M in penalties unless it provides more information on last year's Autopilot recall. (5 comments)
Today's Markets
In Asia, Japan -1.6%. Hong Kong -0.9%. China -0.6%. India -0.1%.
In Europe, at midday, London +0.3%. Paris +1%. Frankfurt +0.4%.
Futures at 7:00, Dow +0.04%. S&P -0.02%. Nasdaq -0.1%. Crude -1% to $77.63. Gold flat at $2,324.70. Bitcoin -2.9% to $62,236.
Ten-year Treasury Yield +3 bps to 4.48%.
Today's Economic Calendar
7:00 MBA Mortgage Applications
10:00 Wholesale Inventories (Preliminary)
10:30 EIA Petroleum Inventories
11:00 Fed’s Jefferson Speech
11:45 Fed's Collins Speech
1:00 PM Results of $42B, 10-Year Note Auction
1:30 PM Fed’s Cook Speech
Companies reporting earnings today »
What else is happening...
Apple (AAPL) unveils new iPad Air, iPad Pro, AI-focused M4 chip.
U.S. set to resume purchases for Strategic Petroleum Reserve.
Reddit soars after first post-IPO results, forecast comes in strong.
Investigation finds sexual discrimination, harassment at FDIC.
Record cruise demand: Royal Caribbean (RCL) to hire thousands.
Uber (UBER) and Instacart (CART) team up on restaurant deliveries.
Getting a ride: Loss narrows at Lyft (LYFT) as bookings climb 21%.
Boy given Pfizer (PFE) experimental muscular dystrophy therapy dies.
Amid lawsuits, OpenAI building tool to let content creators manage use.