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mXa Roundup - Volume 27

March 4th - March 8th, 2024

With economic news scarce, stocks, bonds, and commodities nudged higher this week, fueled by hopes of future rate cuts

  • The S&P 500 is up 1.28%, the Nasdaq is up 1.18%, and the Dow Industrials is down 0.29% WTD; following a period of earnings releases, growth stocks exhibited continued moderate growth this week

  • The 10-Yr U.S. Treasury yield has decreased 0.072% to a current yield of 4.114%, whereas the 30-Yr U.S. Treasury yield decreased 0.063% to a current yield of 4.268%; with a light calendar of economic data releases this week, bond prices have edged higher in anticipation of the summer months

  • Crude oil prices increased 0.59% to a current $78.93/bbl while bitcoin increased 9.14% to a current $67,718/coin; weeks of relentless gains have ignited a frenzy of interest in Bitcoin, even attracting the attention of institutional investors

  • Stocks have shown resilience to rising bond yields this year, partly attributed to productivity gains allowing for more growth without inflation [WSJ]

  • Amidst a wave of bank consolidation, smaller banks are seeing growth as customers seek more face-to-face interaction and local service, while larger banks invest heavily in technology and online banking [WSJ]

  • Recent regional banking crises have prompted discussions about the size of banks, with larger institutions being better equipped to withstand pressures compared to smaller ones [WSJ]

  • Apple has decided to discontinue its car project, redirecting its focus towards generative artificial intelligence, a move that aligns with industry trends and its competitors' strategies [WSJ]

  • Bond traders are increasingly placing bets on the direction of the U.S. economy hours before key economic data releases, confident in their ability to anticipate market shifts [WSJ]

With the surge in artificial intelligence (AI) and the resurgence of cryptocurrencies, investor focus on electric vehicles (EVs) has waned

  • Target aims to rebound from a challenging 2023 by investing in store upgrades, launching a paid membership program, and expanding its private brands [WSJ]

  • Bitcoin surged to a record high due to increased demand following the launch of U.S. exchange-traded funds (ETFs) holding the cryptocurrency [WSJ]

  • Coupang, a South Korean e-commerce company, has experienced significant growth, with its New York-listed shares rising 15% after announcing its first annual operating profit of $473 million for 2023 [WSJ]

  • Despite losing $500,000 on bitcoin previously, Joe Oathout from Alaska retained his faith in the cryptocurrency, seeing his holdings rebound to $150,000 after a record-breaking surge in its price [WSJ]

M&A activity continues to remain depressed, with renewable energy, media, and infrastructure showings signs of renewed growth

  • Apollo Global may explore a bid for travel information service TripAdvisor, which has a $3.7B market cap [BBG]

  • KKR is in talks to acquire renewable-energy producer Encavis in a deal that could value the company at over $2.2B [BBG]

  • PE firms including Advent International and Carlyle are among parties weighing bids for Adiuva Capital’s Sanecum Group, a German operator of medical centers that could be valued at as much as $1.6B [BBG]

  • Cisco Systems’ $28B bid to acquire cybersecurity firm Splunk is set to receive unconditional EU antitrust approval [RT]

  • Vivendi’s Canal+ increased its bid for South Africa’s MultiChoice Group by almost a fifth to $2.9B all-cash and entered exclusive talks on acquiring control of the African broadcaster [BBG]

  • German insurer Talanx completed its $1.5B acquisition of Liberty Seguros' Brazil business [BI]

  • PE firm Sentinel Capital Partners will acquire Carrier’s industrial fire division in a $1.4B deal [RT]

  • US-based communications equipment firm Viavi Solutions agreed to buy UK telecom testing firm Spirent Communications for ~$1.3B [RT]

  • PE firm Cinven agreed to acquire a majority stake in Alter Domus from Permira in a deal that values the fund administrator at $5.3B, including debt [FT]

  • JetBlue Airways and Spirit Airlines canceled their $3.8 merger due to antitrust hurdles [RT]

  • Ennismore, a luxury lifestyle hotel company backed by France’s Accor, is seeking to raise growth capital at a $3B valuation [BBG]

  • Berlin-based Amazon aggregator Razor Group will buying Boston-based peer Perch in an all-stock deal that values the combined company at $1.7B [BBG]

  • BlackRock and Morgan Stanley will acquire TC Energy’s Portland Natural Gas Transmission System for $1.14B [RT]

Recent developments across four key industries highlight heightened competition in energy, regulatory battles for technology, and value arbitrage in commercial real estate

Energy & Natural Resources

  • Exxon has filed for arbitration to contest Chevron's bid for a stake in an oil project off Guyana, citing its right to pre-empt the offer as per the terms of a joint operating agreement [WSJ]

  • Singapore's government has selected a consortium between ExxonMobil and Shell to develop a carbon capture and storage (CCS) project with a capacity of 2.5 million metric tons per annum (MMtpa) of carbon dioxide (CO2), aimed at decarbonizing hard-to-abate sectors such as energy, chemicals, power, and waste [RZ]

  • Tullow Oil reported a significant drop in pretax profit by 78% to $95.9 million due to lower oil prices and impairments, falling short of analyst expectations [WSJ]

Technology, Media, & Telecommunications

  • The European Union's Digital Markets Act is expected to benefit Google over Apple by requiring Apple to open up certain aspects of its app ecosystem in the EU, potentially allowing Google to expand its market share on Apple devices [WSJ]

  • A draft bill introduced in Congress proposes forcing ByteDance, the Chinese company that owns TikTok, to divest its ownership of the app within five months or face a ban from U.S. app stores and web-hosting services [WSJ]

  • Databricks, valued at $43 billion, is postponing its IPO but is operating as if it were already public, reporting business performance metrics and reaching over $1.6 billion in revenue for its fiscal year ended Jan. 31, with a growth rate exceeding 50% [WSJ]

  • Microsoft AI engineer, Shane Jones, has raised concerns about the potential dangers posed by the company's Copilot Designer tool, citing the generation of violent and sexual images [WSJ]

Healthcare & Life Sciences

  • Novo Nordisk's shares surged to a record high after presenting early data for its new obesity drug, Amycretin, indicating superior effectiveness compared to its blockbuster treatment Wegovy [WSJ]

  • Employers who previously covered weight-loss drugs are scaling back or eliminating reimbursement due to high costs, implementing restrictions like BMI requirements or expenditure caps [WSJ]

  • The number of children visiting emergency rooms due to unsupervised melatonin consumption has increased significantly, with melatonin implicated in about 7% of recent ER visits for children under 5 who took medication without supervision [WSJ]

Financial Services

  • New York Community Bancorp is raising over $1 billion from a group of investors, including former Treasury Secretary Steven Mnuchin, to stabilize the troubled regional lender amidst concerns over real-estate loan losses and internal control weaknesses [WSJ]

  • Hedge funds have been consistently increasing their long positions in U.S. real estate investment stocks for six consecutive weeks, seizing opportunities created by the sharp decline in valuations of small and mid-sized banks exposed to commercial real estate (CRE) loans [RT]

  • Private equity players, led by Steven Mnuchin's Liberty Strategic Capital, have injected over $1 billion into New York Community Bank, easing concerns about the bank's financial stability [CNBC]

Outside of standard macroeconomic updates and M&A developments, Super Tuesday’s results and Russian advancements in Ukraine have led news cycles

  • Morgan Stanley predicts a significant uptick in global deal-making volumes by 50% compared to 2023, citing reduced concerns over funding costs, inflation, and recession [RT]

  • The 2024 presidential election is shaping up to be a historic matchup between President Biden and former President Donald Trump, characterized by their advanced ages, polarized electorate, and unique challenges [WSJ]

  • In the first six weeks of 2024, iPhone sales in China saw a significant decline of 24%, attributed to stiff competition from local smartphone brands like Huawei, Oppo, Vivo, and Xiaomi [CNBC]

  • Temu, an emerging e-commerce giant founded in China, surprised tech executives by becoming Meta Platforms' top advertiser in 2023, spending nearly $2 billion on ads [WSJ]

  • NASA has announced a new round of astronaut candidate recruitment for the first time in four years, with competition expected to be fierce given the excitement surrounding the US's return to the moon and increased interest in space exploration [BBG]

  • Russia is launching attacks on Ukrainian forces along multiple points of the 600-mile front line, taking advantage of its recent capture of the eastern city of Avdiivka [WSJ]

Cole LaCour

Mar 8, 2024

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