- Banning Russian Coal Imports After Atrocities
- Scrambling World Markets
- Ukraine War Drives Countries to Embrace Renewable Energy
- The $120 Billion Global Grain Trade
- Russian Auto Boomtown
- The U.S. Economy Is Booming
- Eyes on Inflation, Shoppers Cut Back on Staples
- Even the Rich May Spend Less
- Manhattan Residential Real Estate Sales Hit A Record $7.3 Billion
- Rags-to-Riches Stories
- He Quietly Turned Bank of America Around
- ‘Flash Boys’ Exchange in Crypto-Trading Push
- $1.3 Billion Illegal Darknet Firm
- Investor accuses Morgan Stanley (MS) of leaking data related to Palantir (PLTR). WSJ
- Citigroup (C) suspends new issuance of SPACs (SPACS). Bloomberg
- Spotify (SPOT) podcast union preparing to strike. Bloomberg
- Nio (NIO) in discussions with other companies about licensing technology. FT
- AirBnb (ABNB) suspending operations in Russia & Belarus. Reuters
- EU could ban Russian imports of coal (BTU, CNX, ARLP, ARCH, HCC, CEIX). CNBC
U.S. stock markets have notched an impressive rally since mid-March, with the three major indices sailing out of correction territory in under two weeks. The Nasdaq pushed even higher on Monday, climbing 2% on sentiment surrounding Elon Musk's big stake in Twitter (TWTR). Bulls argue that companies will continue to deliver bumper profits despite the Fed's rate-hiking cycle, while so-called meme stocks are recording big increases in options activity. The sharp unanticipated rebound is having analysts rewrite their latest market forecasts, though some are holding strong by comparing it to a bear market trap.
Bank of America: "Over the last two weeks, the S&P has produced one of its sharpest rallies in history, larger than the biggest 10-day rallies in seven of the S&P's 11 bear markets since 1927," said analysts led by Gonzalo Asis and Riddhi Prasad. "It has done so despite clearly weaker fundamentals (more hikes, higher inflation, and curve inversion) and the Fed leaning against equity market strength to hike faster. The worsening macro backdrop and market-unfriendly Fed make sustained U.S. equity gains unlikely. In practice, this means lower risk assets."
Morgan Stanley: "The bear market rally is over," declared U.S. Equity Strategist Michael Wilson. The economy is headed for a sharp slowdown as a "payback in demand from last year's fiscal stimulus, demand destruction from high prices, food and energy price spikes from the war that serve as a tax and inventory builds that have now caught up to demand." Note that Wilson had similar bearish views in 2021, which he later admitted were "wrong" as U.S. benchmark indexes powered to continuous record highs.
J.P. Morgan: "Geopolitics remains a wild card, but we do not see equities fundamental risk-reward to be as bearish as it is currently fashionable to portray," analysts led by Mislav Matejka wrote in a research note. JPMorgan (JPM) CEO Jamie Dimon also flagged the "strength of the U.S. economy" in his annual letter to shareholders on Monday, citing "plentiful jobs with wage increases and more than $2T in excess savings." The consumer is in "excellent financial shape (on average)," he added, while leverage is "among the lowest on record." (8 comments)
Industry-changing technologies can take years or even decades to standardize, and many battles can be waged until a clear victor emerges. One such battle is currently taking place in the EV industry as companies debate the best way to power the cars of the future. NIO (NYSE:NIO), one of China's leading EV makers, is looking to expand the uptake of battery-swapping as it tries to gain ground on other automakers like Tesla (NASDAQ:TSLA) that have turned to charging stations instead.
Quote: "We are open to selling the platform," declared Hui Zhang, managing director of NIO Europe, which is looking to win over more drivers on the continent (currently one of the most competitive markets for EVs). It follows the recent opening of NIO's first European battery swap station in Norway, which was placed alongside superchargers used by Tesla, in part to display how much faster of a system it is. A battery swap by NIO only takes about 5 minutes via a dedicated robot-operated bay, compared to the fastest chargers on the market that give some power quickly, but take up to an hour to fully recharge an empty battery.
More pros of battery swapping include eliminating the costs of the battery, which can account for more than a third of a new vehicle's price tag. Drivers are also not worried about depreciating capacity or the value of their cars since the battery is not deeply integrated into the vehicle. Others caution that the technology works better in areas with high urban density and a scarcity of driveways, while the costs of building a swap station could be much higher than the infrastructure of a fast-charging network.
Some history: Tesla began conducting battery swapping trials in 2013, but dropped the project a few years later as consumers increasingly expressed interest in its Supercharger network. Three years earlier, Renault (OTCPK:RNLSY) trailblazed the industry by becoming a primary partner for Better Place, an Israeli startup that hoped to revolutionize the e-mobility industry. The company initially set up shop in Israel, Denmark and Hawaii, but was plagued by financial difficulties and mismanagement, and eventually went bankrupt in 2013. (23 comments)
While more than 100 viruses impact humans, vaccines only exist right now for 25. Looking to change that, Moderna (MRNA) CEO Stephane Bancel believes the company can employ the same technology it used to quickly create a COVID vaccine in 2020 to develop shots for other viral diseases. He even predicts that many adults will eventually receive annual COVID boosters, which could be combined with variant-specific doses, or other vaccines, like those that target the flu.
Quote: "Our first priority is to get an annual iPhone-like booster for all respiratory diseases," Bancel said in a speech to the Boston College Chief Executives Club. "You're going to get your [new] iPhone every year in September, and you're going to get your 'Moderna iPhone booster' every year [as well]. We're going to keep adding more and more 'apps' for viruses, and we'll refresh all of those and update all of those every year."
The Moderna CEO spent a decade doing mRNA vaccine research before COVID even emerged, but "once you get all of the pieces of the technology to work, then the next one is [easy]." As such, Bancel expects the firm to have annual COVID boosters available beginning this fall to protect people from new virus variants like Omicron. Moderna's rivals like Pfizer (PFE), BioNTech (BNTX) and Johnson & Johnson (JNJ) appear likely to develop future COVID booster shots as well.
Go deeper: While many consumers have gotten two-shot initial vaccinations and a third booster shot, Bancel said whether consumers get additional shots will depend on people's ages and individual risk tolerances to things like "long COVID." Bancel said he doesn't think his 19- and 20-year-old daughters will need boosters because "young people have very strong immune systems," but the 49-year-old CEO said he'll probably get additional booster shots himself because he's "petrified" to have symptoms that linger for months or years. (92 comments)
The war in Ukraine has been a boon for Chinese companies as Western firms continue to suspend or exit their businesses in Russia. In fact, China's top envoy to Russia, Zhang Hanhui, has urged businesspeople in Moscow to seize economic opportunities created by the crisis, like adjusting their company structures and filling the "gap" in the Russian market.
Statistics: Telecom equipment supplier Huawei saw phone sales in Russia surge 300% in the first half of March, according to MTS, the country's largest mobile provider. Brands like Oppo and Vivo also logged triple-digit increases.
Meanwhile, popular Chinese companies such as Alibaba (NYSE:BABA), Tencent (OTCPK:TCEHY) and Xiaomi (OTCPK:XIACY) continue to conduct "business as usual" in Russia, while others that have made a decision to leave have quickly found themselves in hot water. In late February, ride-hailing giant DiDi (NYSE:DIDI) announced it would pull out of the country, only to reverse course five days later. Neither statement mentioned geopolitical factors, but users online pointed to heavy public pressure.
Outlook: If Chinese companies continue to sell in Russia, it could cut off their business in the West. Many of the electronics they export often contain high-end semiconductors - or are made with U.S. tools and machinery - making them subject to sanctions on Moscow. In the meantime, firms like Huawei are walking a tightrope, refraining from calling out Russia while trying to avoid secondary sanctions. "These policies and measures are complex and constantly changing, and Huawei is still in the process of careful evaluation," rotating chairman Guo Ping said in Shenzhen.
In Asia, Japan +0.2%. Hong Kong closed. China closed. India -0.7%.
In Europe, at midday, London +0.3%. Paris -1.3%. Frankfurt -0.5%.
Futures at 6:20, Dow -0.2%. S&P -0.2%. Nasdaq -0.1%. Crude +0.4% to $103.72. Gold flat at $1933.30. Bitcoin +1.4% to $46,640.
Ten-year Treasury Yield +4 bps to 2.45%
Today's Economic Calendar
What else is happening...
France's Macron calls for ban on Russian oil and coal imports.
Treasury halts Russian bond payments from U.S. accounts.
Baltic Dry Index down for eighth day as rates sink across the board.
U.S. coal prices top $100 for first time since 2008.
Climate change could see the U.S. lose $2T each year - White House.