European Stocks Rise, Led by Deutsche Bank
European stocks opened higher on Monday, led by Deutsche Bank (NYSE:DB) and other financial stocks, indicating a growing sense of confidence among investors about the health of the banking sector. The Stoxx 600 (STOXX:SSXP) rose 0.9%, while the Dax (DBI:DAX) and Cac 40 (EU:PX1) increased by 0.8%, and the FTSE 100 (FTSE:UKX) gained 0.6%. The banking sector, which suffered significant losses the previous day, saw gains, with the Stoxx 600 banks index rising 1.2%. Deutsche Bank’s share price rose 4.4% after losing 8.5% on Friday. The bank’s decline was due to its credit default swaps climbing to 200 basis points as investors speculated which bank would be the next to face issues after Credit Suisse’s (NYSE:CS) failure.
Banks Extend Services to Crypto
Several banks are extending their services to cryptocurrency firms that require banking services following the collapse of crypto-friendly lenders, Silvergate Capital (NASDAQ:SI) and Signature Bank (NASDAQ:SBNY) . Industry insiders have reported that regional banks like Customers Bancorp (NYSE:USB) in West Reading, PA, and Fifth Third Bancorp in Cincinnati have provided a positive response to these crypto companies’ efforts to establish new banking relationships. Some crypto firms have moved their deposits to smaller upstart banks, such as New Jersey-based Cross River Bank, while others are contemplating offshore banking. Meanwhile, large banks such as JPMorgan Chase (NYSE:JP) and Bank of New York Mellon (NYSE:BK) still serve crypto clients but are particular about their client base and the banking services they provide.
BioNTech’s 2023 Revenue Decline
BioNTech (NASDAQ:BNTX), the vaccine manufacturer, has revised its projected revenue downward for 2023, indicating the challenges facing firms that enjoyed a windfall from the pandemic as coronavirus immunization demand decreases. The German biotech company, Pfizer’s (NYSE:PFE) Covid-19 vaccine partner, announced on Monday that Covid vaccine revenue would decrease to around €5bn in 2023, compared to total revenue of over €17bn in 2022 and €19bn the previous year, with most of the revenue generated by coronavirus vaccinations. This decline was worse than market expectations, with analysts predicting total revenues of almost €8bn in 2023.
US Steelmakers Increase Production
Major US steelmakers, such as Cleveland-Cliffs (NYSE:CLF) and U.S. Steel Corp (NYSE:X)., are increasing their production of electrical steel, a paper-thin and difficult-to-make material that is critical to the electric vehicle industry’s growth. Steelmakers are competing with a small group of foreign-based firms that produce electrical steel, which converts electricity into mechanical power for products like air conditioners, washing machines, power tools, and more recently, electric vehicles. As executives report, electrical steel, which accounts for only 1% of the world’s total steel production, is already in short supply for EVs. As the demand for EVs increases in the coming years, companies anticipate that demand will outstrip production. Supply chains for battery-powered EVs have become a focal point for the US auto industry as production shifts away from internal combustion engines.
Big Cloud Companies Promote AI Tools
The biggest cloud companies, Amazon (NASDAQ:AMZN) , Microsoft (NASDAQ:MSFT), and Google (NASDAQ:GOOG), are promoting new artificial intelligence (AI) tools, which they claim will revolutionize work, learning, and creativity while rejuvenating sales in their cloud-computing businesses. The potential of new generative AI, like the viral chatbot ChatGPT, is at the core of their sales pitches, as they aim to capitalize on the explosion of interest in applications. OpenAI launched the ChatGPT chatbot in November 2022, which can perform functions such as drafting memos and producing computer code at near-human levels of sophistication.
China Increases Oversight of Auditing Firms
China has warned Deloitte to “learn a lesson” following a recent fine against the auditing firm, and pledged to increase its oversight of both international and local auditors, including the Big Four. This warning comes as President Xi Jinping aims to eliminate financial system risks after several large corporate failures. It signals tighter scrutiny of the accounting and consulting sector, and raises uncertainty about the future of Deloitte, PwC, KPMG, and EY in China.
Salesforce Shakes Off Proxy Fight
Elliott Management has abandoned plans to nominate directors to the board of Salesforce (NYSE:CRM) after the software group’s better-than-expected earnings report in March. In a joint statement, Elliott said it would not nominate rival directors since Salesforce had put a “clear focus on value creation”. This move represents a rare retreat for the activist investor and relieves pressure on Salesforce’s co-founder and CEO Marc Benioff, who had to reassess the company’s strategy.
Uber Eats Removes Online-Only Brands
Uber Eats (NYSE:UBER) is removing thousands of online-only brands from its app this week, as it is concerned that the platform is becoming clogged with restaurants listing multiple delivery options with different names but the same menu. Virtual brands – delivery businesses without physical storefronts – mushroomed on delivery apps during the pandemic, accounting for 8% of Uber Eats’ storefronts listed in the US and Canada but less than 2% of bookings in the region.
Tether Extends Lead in Stablecoin Market
Tether, the world’s largest stablecoin by market cap, has extended its lead in the stablecoin market, while its main competitors have faltered. Its value has increased by over $5 billion in the past two weeks to about $79 billion, according to CoinMarketCap data. The value of USD Coin has shrunk by $5 billion to about $34 billion, while the market cap of Binance USD has more than halved from November’s record after New York regulators banned the new US issuance of the stablecoin.
Walmart Creates Director of Workplace Mobility Position
Walmart (NYSE:WMT) has created a new position called “director of workplace mobility” among its 15,000 headquarters employees in Bentonville, Arkansas. The role’s specific task is to figure out how to get 10% of the retailer’s local workforce to commute by any means other than driving alone. Originally, the goal was to get 10% of Bentonville staff commuting on bikes by this year, but the deadline has been pushed back to 2025, when the new campus is set to open, and Kourtney Barrett has been hired to help achieve it.