Scroll down to see last week’s recap.
Events:
Tue, 18th of Apr:
The Canadian CPI (Consumer Price Index) for March is expected to increase to 0.5% compared to 0.4% in February. It is a measurement of the change in the average price level of a basket of goods and services that Canadian consumers purchase, relative to the previous month. CPI is one of the most important indicators of inflation in an economy. When the CPI increases, it means that prices for goods and services have risen, and the currency’s purchasing power has decreased. Conversely, when the CPI decreases, it means that prices have fallen, and the currency’s purchasing power has increased.
Wed, 19th of Apr:
The yearly UK CPI (Consumer Price Index) for March is expected to decrease to 9.8% compared to 10.4% in March 2022. It is a measure of the average change over time in the prices paid by consumers for a basket of goods and services. In the UK, the Office for National Statistics (ONS) calculates and releases the CPI on a monthly basis.
UK CPI y/y specifically measures the percentage change in the CPI over the past 12 months, compared to the same period a year ago. It is a key indicator of inflation in the UK economy and is closely watched by policymakers, investors, and analysts. A higher-than-expected CPI y/y can indicate that prices for goods and services are rising faster than anticipated, which may lead to higher interest rates and a stronger currency. Conversely, a lower-than-expected CPI y/y may indicate a slowing economy, leading to lower interest rates and a weaker currency.
Thu, 20th of Apr:
The US Unemployment Rate for last week is expected to rise from 239K to 240K, compared to the week before that. It is a measure of the percentage of the total labor force that is currently unemployed but actively seeking employment and willing to work. The US Unemployment Rate is calculated by dividing the number of unemployed individuals by the total labor force (including both employed and unemployed individuals). It is considered an important economic indicator, as it reflects the health of the job market and has implications for consumer spending, business investment, and government policy. A high unemployment rate can indicate a weak economy with lower consumer spending, while a low unemployment rate can indicate a strong economy with higher consumer spending and business investment.
Fri, 21st of Apr:
The German Flash Manufacturing PMI for April is expected to increase to 45.7 compared to 44.7 in the previous month. Flash Manufacturing PMI stands for Flash Purchasing Managers’ Index (PMI) for the manufacturing sector. It is an early estimate of the monthly economic activity in the manufacturing sector. The PMI is calculated by surveying purchasing managers from manufacturing companies and asking them about various factors such as new orders, production levels, employment, supplier deliveries, and inventories. The responses are then weighted and compiled into a single index number that ranges from 0 to 100. A reading above 50 indicates that the manufacturing sector is expanding, while a reading below 50 indicates that it is contracting. The Flash Manufacturing PMI is released a few days before the final PMI report and is based on a smaller sample size, so it is considered an early indicator of economic activity.
Notable Earnings:
Recap from Last Week (10.04.23 – 14.04.23):
- Shares of CXApp Inc, a spinoff of Inpixon, experienced a surge in trading volume on Thursday, and the stock remained volatile for hours. CXApp recently went public after merging with special purpose acquisition company KINS Technology Group Inc and is currently valued at less than $100 million with a low float. Despite having an average session volume of approximately 878,000, the stock’s trading volume on Thursday exceeded 160 million, suggesting significant interest from retail traders on social media platforms. CXApp’s platform offers workplace experience solutions, such as an enterprise employee application, indoor mapping, on-device positioning, augmented reality technologies, and an AI-based analytics platform. The stock was the top trending ticker on Stocktwits on Friday.
- Lucid Group, Rivian Automotive, and Tesla saw their stock prices fall on Friday following the release of Lucid’s Q1 production and delivery numbers. Lucid produced 2,314 vehicles in the quarter and delivered 1,406 units, a decrease from the previous quarter’s numbers. However, the company aims to produce 10,000 to 14,000 units for the full year. Rivian, on the other hand, reported better-than-expected Q1 deliveries and production, but its production numbers are low compared to its target of 50,000 units for the year. These results may cause concerns about production ramp-up and EV demand amid uncertain economic conditions. Lucid is set to report its Q1 earnings on the 8th of May, which may provide further details on the numbers.
First-quarter delivery numbers for major U.S. electric vehicle makers highlight the growing production-ramp struggles, particularly for startups. Luxury EV maker Lucid delivered 1,406 vehicles in the first quarter, compared to Rivian’s 7,946 vehicles and Tesla’s 422,000 units. Lucid produced 2,314 vehicles, while Rivian manufactured 9,395 units and Tesla churned out 440,808 units. Lucid’s deliveries declined 27.23% quarter-over-quarter, while Rivian saw a 1.37% drop, and Tesla reported a 4.34% sequential increase. Year-over-year, Tesla’s deliveries increased 36.39%, while Rivian’s surged nearly 548% and Lucid delivered 360 vehicles in the first quarter of 2022.
- Major US financial institutions, including JP Morgan Chase & Co., Wells Fargo & Company, BlackRock Inc., Citigroup, and PNC Financial Services Group, reported higher-than-expected earnings in Q1 2023 despite the financial crisis that rocked regional banks during the period. JPMorgan announced EPS of $4.10, Wells Fargo announced EPS of $1.23, BlackRock announced EPS of $7.93, Citigroup announced EPS of $2.19, and PNC Financial Group announced EPS of $3.98. The banks also posted strong revenues, with customer deposits increasing at some banks.
- Investors should pay attention when billionaires invest in the same trend, as they have access to the most up-to-date information and may spot trends before others. Hedge fund manager George Soros recently purchased $325 million worth of Horizon Therapeutics, a biotechnology company that develops cures for rare and rheumatic diseases. Other notable billionaires, including Ray Dalio, Jeff Bezos, and Mark Cuban, are also investing in the healthcare industry. Investors may consider following in their footsteps with similar holdings or investing in healthcare startups such as Aura Health.
- During a recent BBC interview, Microsoft Corp. Founder Bill Gates was accused of hypocrisy for his extensive use of private jets despite his warnings about climate change. Gates defended himself by stating that his funding of clean energy projects and climate initiatives offset his carbon-intensive lifestyle. He uses his fund, Breakthrough Energy Ventures, to invest billions in companies that help reduce carbon emissions. Similarly, former Vice President Al Gore, who also advocates for climate change action, has been criticized for his personal carbon footprint. However, both Gates and Gore know that clean energy is a lucrative sector and have invested heavily in high-growth startups that focus on reducing carbon emissions. These investments are not limited to large-cap companies but also include smaller startups like Heliogen Inc. and Qnetic.
- Despite Tesla CEO Elon Musk’s Republican leanings and his disdain for Joe Biden, Tesla stands to benefit from the new rules for tailpipe emissions proposed by the Environmental Protection Agency (EPA). These new rules could force automakers to build more electric vehicles and fewer gasoline-powered ones, which could cause upheaval for many automakers, but not Tesla. The competition could end up with massive new costs, and Tesla could be the single biggest beneficiary of the EPA’s new effort to reduce auto-related emissions. Even though Musk and Biden have feuded over labor unions, Tesla has benefited from regulatory credits in California, which are largely governed by Democrats. All of Tesla’s assembly lines produce electric vehicles, while other automakers’ EVs are still a tiny share of production. The new EPA rules, however, would impose new costs on top of the investments automakers already have planned. The automakers are sure to challenge the new proposal, as they cannot shift to electric vehicles so quickly without incurring significant costs.
- On Friday, Boeing’s shares fell 6% in premarket trading due to a new supplier quality issue with Spirit AeroSystems, causing Boeing to halt deliveries of some 737 MAXs. Spirit’s shares slumped 14%. The issue pertains to a fuselage fitting supplied by Spirit and is believed to date back to 2019. The problem affects a portion of the 737 MAX family of airplanes, including the MAX 7, MAX 8, and MAX 8200 airplanes as well as the P-8 Poseidon maritime surveillance aircraft based on the 737 NG. Analysts warn of a likely hit to cash flow and a potential impact on Boeing’s plans to ramp up production of its bestselling jet. However, the problem is not a safety of flight issue and in-service planes can continue to operate.
- Shares of crypto-related companies Bitfarms Ltd (BITF) and Marathon Digital Holdings Inc (MARA) are up due to the continued upward momentum in cryptocurrencies, with Bitcoin crossing above $30,000 for the first time in 2023. This rise may be fueled by expectations of the upcoming halving and a potential U.S. Federal Reserve interest rate cut, which could counterbalance slower growth and tightening credit conditions due to concerns in the banking sector. Additionally, crypto may be trading higher in sympathy with the broader U.S. market following a decline in the producer price index for March, which has eased some inflation concerns. Marathon Digital focuses on mining digital assets, while Bitfarms is a bitcoin self-mining company.
- Bitcoin’s price has increased by more than 50% since Tesla sold approximately $1 billion worth of BTC in July 2022, meaning Tesla could have made an additional $500 million if it had waited until today to sell. Tesla made roughly $165 million in profit from two separate Bitcoin sales, but as of the 14th of April, it sits atop an unrealized loss of around $56.6 million on its remaining BTC holdings. However, Wall Street analysts estimate that Tesla’s free cash flow in Q1/2023 would be nearly $2 billion, reducing the chances of Tesla dumping any significant Bitcoin amount in the near term.
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