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mXa Roundup - Volume 37

May 13th - 17th, 2024

First-quarter S&P 500 earnings have been strong, with 78% beating analyst expectations, and year-over-year earnings growth is expected to accelerate, potentially extending the economic expansion


  • The S&P 500 is up 1.37%, the Nasdaq is up 1.89%, and the Dow Industrials is up 1.02%% WTD 


  • The 10-Yr U.S. Treasury yield has decreased -0.1230% to a current yield of 4.371%, whereas the 30-Yr U.S. Treasury yield decreased -0.1250% to a current yield of 4.542%


  • Crude oil prices increased 1.58% to a current $78.86/bbl while bitcoin increased 7.79% to a current $66,242.70/coin 


  • GameStop and AMC Entertainment, both meme-stock darlings, surged earlier in the week, doubling in value, but then experienced significant declines, down 21% and 10% respectively [WSJ



  • Tesla shareholders must decide on June 13th whether to reinstate a $46 billion stock option award for CEO Elon Musk, a decision with significant implications for the company's future plans and amidst recent challenges and controversies [WSJ



  • The return of Reddit user Keith Gill, also known as Roaring Kitty, has reignited excitement for a potential resurgence of the meme stock mania of 2021, leading to rallies in meme stocks like Robinhood Markets [WSJ



  • In April, corporate debt defaults surged to the highest monthly level since October 2020, with rising interest rates taking a toll on companies that borrowed leveraged loans, particularly in the technology sector [WSJ]



  • Recent economic indicators suggest a mixed outlook, with signs of slowdown and disinflation potentially prompting Fed rate cuts, particularly by September, with July also under consideration [WSJ]



Fading confidence in rate cuts accompanies high inflation, while companies in the S&P 500 face steeper share declines for missing targets


  • Wall Street's confidence in imminent interest-rate cuts has waned with three months of high inflation, but renewed optimism about a soft landing for the U.S. economy has emerged before the release of the consumer-price index [WSJ



  • Wall Street's confidence in imminent interest-rate cuts waned due to three consecutive months of high inflation data, leading investors to pin their hopes on upcoming consumer-price index figures [WSJ



  • Despite an overall positive earnings season with a 5.4% profit increase in the S&P 500, companies falling short of investor expectations are facing harsher penalties than usual, with shares declining by an average of 2.8% [WSJ



  • Despite stalled inflation this year, the Federal Reserve remains committed to eventually cutting interest rates, banking on a slowdown in housing costs to bring inflation closer to its 2% target [WSJ]




M&A activity continues to remain depressed, although developments within media, tech, and healthcare prove to be encouraging


  • Real estate mogul Frank McCourt plans to build a consortium to bid for TikTok’s US business, which is potentially worth $35B-$40B [BBG


  • KKR will offer a package of remedies as to win an early EU approval for its $23.8B bid for Telecom Italia’s land-line network [BBG


  • Royal Mail's parent company International Distributions Services will agree to a $4.4B takeover by Daniel Kretinsky if the Czech billionaire tables a formal offer [RT


  • Malaysia’s SWF Khazanah Nasional, Employees Provident Fund, GIP and Abu Dhabi's ADIA are set to privatize Malaysia Airports in a $3.9B deal [BBG


  • KPS Capital Partners will acquire Siemens' Innomotics large motors and drives division for $3.3B [RT


  • Apollo Global is in advanced talks with Intel to invest over $11B to build a new chip plant in Ireland [WSJ]  


  • Walgreens Boots Alliance is reaching out to potential buyers for its $8.8B Boots drugstore chain in the UK [BBG]


  • PE firm Permira will acquire website-builder Squarespace for ~$6.6B cash in this year’s second-largest take-private LBO [BBG


  • Kraft Heinz is exploring a sale of its Oscar Mayer meats business that could fetch $3B-$5B [WSJ]


  • Novo Nordisk acquired a ~60% stake in Austria-based life science tools company Single Use Support in a near $1B deal [RT


  • Insurance giant Aflac acquired a 40% stake in middle market private-credit shop Tree Line Capital Partners for ~$100M [WSJ


Uber will buy Delivery Hero’s Foodpanda business in Taiwan for $950M [BBG]


Recent developments across four key industries highlight the impacts of power-hungry AI, hospital price inflation, and Google’s AI integration efforts


Energy & Natural Resources

  • Power-plant owners are seeing the impact of power-hungry artificial intelligence on future electricity demand, with forward power prices rising in data-center hubs like Texas and the mid-Atlantic region [WSJ



  • Houston-based Crescent Energy has agreed to acquire SilverBow Resources for $2.1 billion, with SilverBow shareholders set to receive 3.125 shares of Crescent stock per share, or a cash option valued at $38 per share [WSJ


  • The International Energy Agency has lowered its forecast for oil-demand growth this year to 1.1 million barrels a day, citing subdued industrial activity and mild winter temperatures in Europe [WSJ


  • The U.S. Energy Information Administration revised its forecast for Henry Hub gas prices, expecting the spot price to average $2.18 per MMBtu in 2024 and $3.09 per MMBtu in 2025, citing reduced natural gas production due to low prices [RZ


Technology, Media, & Telecommunications

  • Despite facing challenges from competitors like OpenAI, Google remains dominant in the search and mobile operating system markets, providing a strong foundation for its AI integration [WSJ]



  • CoreWeave, a cloud-computing startup, secured $7.5 billion in debt financing from prominent investors, following a recent $1.1 billion equity funding round [WSJ


  • Elon Musk's acquisition of Twitter led to significant changes, including a rebranding to X.com, with Musk now serving as the platform's chief technical officer [WSJ



Healthcare & Life Sciences

  • Hospital price inflation, fueled by demands for higher insurer payments to cover rising wages, has contributed to overall inflation despite initial price locks due to existing contracts [WSJ



  • Roche's new weight-loss drug candidate CT-388 showed promising phase 1 trial results, boosting its stock and positioning it to compete in the lucrative obesity treatment market dominated by Novo Nordisk and Eli Lilly [WSJ


Financial Services

  • The Dow Jones Industrial Average surpassed the 40,000 milestone for the first time, reflecting a buoyant investing atmosphere characterized by robust corporate profits, low unemployment, and easing inflation [WSJ]



  • Alibaba's shares in Hong Kong rebounded by 7.0% following a modest rise in sales and an 11% fall in adjusted net profit in its January-March earnings report, attributed to increased investment for future growth [WSJ


  • China introduced bold measures to address its housing market crisis, including city and local authorities buying unsold homes to convert them into affordable housing [WSJ



Outside of standard macroeconomic updates and M&A developments, Berkshire Hathaway’s silent investment, meme stocks, and grade inflation have led news cycles


  • GameStop's Monday rally inflicted nearly $1 billion in losses on short sellers, with GameStop's short position at over 24% of its freely available shares, while other meme stocks like AMC and Reddit also surged [CNBC


  • Warren Buffett's Berkshire Hathaway has silently accumulated a $6.7 billion stake in Chubb, a major insurance company, reflecting Buffett's ongoing interest in financial services [FT


  • Microsoft's total carbon emissions have increased by nearly 30% since 2020, primarily due to indirect emissions associated with constructing new data centers, as reported in its latest sustainability report [CNBC


  • TikTok is currently testing a new feature that allows users to upload videos up to an hour long, targeting a limited group of users in select markets as it takes on its competitor, YouTube [DM


  • Since the pandemic began, U.S. schools' more lenient grading policies have led to higher grades despite lower test scores and attendance, stirring debate among educators [WSJ


  • The first crewed mission of Boeing’s Starliner spacecraft has been postponed to no earlier than May 21 due to a small helium leak found in the service module, requiring further testing and solutions [CNN


  • Masters champion Scottie Scheffler was detained by police while driving to the PGA Championship in Louisville, after he failed to comply with police orders during an investigation of a pedestrian fatality near Valhalla Golf Club [CBS

Cole LaCour

May 17, 2024

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