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mXa Roundup - Volume 30

March 25th - 29th, 2024

Capital markets delivered strong returns this week and throughout Q1; the S&P 500 surged 10%, while oil prices rallied an impressive 18% YTD

  • The S&P 500 is up 0.23%, the Nasdaq is down 0.05%, and the Dow Industrials is up 0.08% WTD; markets have remained steady approaching end of Q1 as record-highs are maintained

  • The 10-Yr U.S. Treasury yield has decreased 0.004% to a current yield of 4.206%, whereas the 30-Yr U.S. Treasury yield decreased 0.036% to a current yield of 4.349%; bond prices are ticking up as investors anticipate the Fed cutting interest rates

  • Crude oil prices increased 3.19% to a current $83.03/bbl while bitcoin increased 10.58% to a current $70,771/coin; along with hot equity and bond markets, oil prices have climbed as electric vehicles sales show signs of slowing

  • The first quarter of 2024 saw a robust rally across various asset classes, with stocks, cryptocurrencies like bitcoin, and safe-haven assets like gold reaching new records [WSJ]

  • The Port of Baltimore, ranked ninth largest globally by trade volumes, faced a significant setback as a container ship collided with a bridge, potentially disrupting port operations for months [WSJ]

  • Small, private investors, including high-net-worth individuals and family offices, are seizing the opportunity to buy commercial real estate as institutional investors retreat from the market [WSJ]

While 2024 has largely dispelled anxieties from 2023, some lingering concerns remain evident in both ESG investing trends and the issuance of U.S. Treasuries

  • The issuance of U.S. Treasurys has surged, nearly doubling since the beginning of the pandemic, reaching a record $23 trillion in 2023 [WSJ]

  • Donald Trump's social-media company, Truth Social, saw its shares surge 16% on its first day of trading, boosting Trump's fortune to approximately $4.5 billion [WSJ]

  • Despite the Federal Reserve's promises of interest-rate cuts, Treasury yields have continued to rise, impacting mortgage rates and borrowing costs [WSJ]

  • Chinese technology stocks, once high-growth darlings, have now transitioned into value stocks due to slower growth and increased regulatory risks [WSJ]

  • Investors are increasingly turning to derivative-income exchange-traded funds (ETFs) to protect against potential losses amid low market volatility, with assets in such funds surpassing $80 billion [WSJ]

  • The popularity of ESG investing has declined significantly, with fewer new funds being created and decreased online interest and analyst mentions [WSJ]

M&A activity improves off of 2023 lows as developments within pharmaceuticals, industrials, and global infrastructure prove to be encouraging

  • Johnson & Johnson is in talks to acquire medical device maker Shockwave Medical, which has an ~$11.9B market cap [WSJ]

  • London-listed Ithaca Energy is in exclusive talks to take over Italian oil major Eni’s UK upstream assets, including Neptune Energy, which Eni bought for $4.9B last year [FT]

  • US-listed International Paper offered to acquire UK paper and packaging firm DS Smith in a $7.2B all-stock deal [RT]

  • F1 owner Liberty Media is in exclusive talks to buy MotoGP-owner Dorna Sports for over $4.3B [FT]

  • Alibaba Group is offering to buy the 36% of logistics business Cainiao it does not already own for up to $3.8B, abandoning plans for an IPO [RT]

  • Avetta attracted takeover interest from PE firms including EQT, Warburg Pincus, and Bain Capital; the compliance software provider could be valued at over $3B in a sale [BBG]

  • French builder Vinci and Spain’s state-controlled airport manager Aena SME are competing to acquire Edinburgh Airport from Global Infrastructure Partners, which is seeking over $3.8B [BBG]

  • US oil refiner Phillips 66 is exploring the sale of its 25% stake in the Rockies Express Pipeline that it hopes could be worth over $1B, including debt [RT]

  • Goldman Sachs Asset Management is exploring a sale of B&B Hotels in a potential deal that could value the European budget hotel chain at ~$3.8B [BBG]

  • Pharma giant Novo Nordisk will acquire RNA-based heart disease treatment developer Cardior Pharmaceuticals in a deal worth up to $1.1B [FT]

Recent developments across four key industries highlight energy disruption, investment into artificial intelligence, and weight loss drug expansion

Energy & Natural Resources

  • Dry conditions in Quebec, Canada, are forcing one of the world's largest hydropower producers, Hydro‑Québec, to cut exports, disrupting plans to become the "battery of the U.S. northeast" by supplying power to neighboring states [WSJ]

  • Macquarie strategists anticipate Brent crude oil prices to rise towards $90 per barrel due to geopolitical tension and discussions on global oil balances [RZ]

  • Rising gasoline prices, driven by severe weather at home and geopolitical disruptions abroad, have impacted American consumers, contributing to stickier-than-expected inflation and weighing on the outlook for the U.S. economy [WSJ]

  • Schlumberger has announced plans to acquire 80% of carbon-capture company Aker Carbon Capture for nearly $400 million, forming a joint venture focused on carbon capture [WSJ]

Technology, Media, & Telecommunications

  • Amazon has invested an additional $2.75 billion in the artificial-intelligence startup Anthropic, bringing its total investment in the company to $4 billion [WSJ]

  • Companies are forging ahead with the development and deployment of artificial intelligence applications despite the uncertain regulatory landscape, with European lawmakers recently passing comprehensive legislation on AI [WSJ]

  • The artificial intelligence boom has intensified competition in Silicon Valley's talent market, with tech companies offering million-dollar compensation packages and perks to attract expertise in generative AI [WSJ]

Healthcare & Life Sciences

  • Major U.S. health insurers, including CVS Health, Elevance Health, and Kaiser Permanente, have agreed to cover Novo Nordisk's anti-obesity drug Wegovy for certain Medicare beneficiaries with heart-related conditions, following new guidance from the Centers for Medicare and Medicaid Services [WSJ]

  • Merck has high hopes for its newly approved drug, Winrevair, which treats pulmonary arterial hypertension, potentially offsetting revenue declines from its blockbuster cancer drug Keytruda [WSJ]

  • Walgreens Boots Alliance reported higher sales for the fiscal second quarter but posted a loss due to a one-time impairment charge related to VillageMD [WSJ]

Financial Services

  • UBS Group announces that Sergio Ermotti will remain as CEO to oversee the integration of Credit Suisse, addressing concerns about the bank's size and potential regulatory needs [WSJ]

  • Visa, Mastercard, and major U.S. credit-card issuing banks have reached a settlement with merchants to lower swipe fees over the next few years, potentially eliminating $30 billion in fees over five years [WSJ]

Outside of standard macroeconomic updates and M&A developments, SBF’s sentencing and the Crocus City Hall Attack in Russia have led news cycles

  • Sam Bankman-Fried, founder of FTX, has been sentenced to 25 years in prison for fraud related to the collapse of his digital exchange, with over $11 billion in financial penalties imposed [WSJ]

  • Since the legalization of sports betting, major U.S. leagues have faced a surge in gambling-related scandals involving athletes, prompting concerns about the integrity of sports competitions [WSJ]

  • The death toll from the Moscow concert hall attack rose to 143, with around 80 people remaining hospitalized from injuries sustained during the siege by gunmen [AP

  • President Biden, along with former Presidents Bill Clinton and Barack Obama, are set to attend a major campaign fundraiser in New York City, showcasing unity despite past tensions [WSJ]

  • Robinhood introduced its inaugural credit card, the Robinhood Gold Card, at its first-ever product keynote event in New York City, offering 3% cash back on all categories [AX]

  • The Biden administration plans to expand the Uyghur Forced Labor Prevention Act Entity List, adding more companies alleged to have ties to forced labor in China's Xinjiang region [WSJ]

  • Israeli Prime Minister Benjamin Netanyahu is facing intense pressure as he navigates the war in Gaza and hostage-release negotiations with Hamas [WSJ]

Cole LaCour

Mar 29, 2024

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