Minor Gains in European Markets
European stocks experienced minor gains on Friday, as traders remained on the lookout for the potential impact of higher interest rates on inflation. The Stoxx 600 (STOXX:SSXP), which covers the entire region, experienced a 0.3% increase after eurozone inflation fell more than anticipated and is on course to finish the quarter up over 6%. Germany’s Dax (DBI:DAX) rose 0.3%, and London’s FTSE 100 (FTSE:UKX) was up 0.1% after figures revealed that the UK economy had grown by 0.1% between the third and fourth quarters of 2022.
Futures Rise Amid Indictment
Traders are waiting for an inflation reading that is preferred by the Federal Reserve to assess underlying price pressures. US equity futures remained stable while a global share gauge is on track to see a second consecutive quarterly increase, indicating optimism among investors despite elevated interest rates and banking turmoil. The S&P 500 (SPI:SP500) index edged up, while the Nasdaq 100 (NASDAQI:NDX) remained unchanged, with the underlying index showing its strongest performance in March since 2010. Stocks associated with Donald Trump increased after he became the first former president to be indicted.
Investors Flock to Cash
Investors have started to flock to cash at the quickest rate since the pandemic began, amid fears of a series of bank runs and while seeking out money-market funds with higher interest rates. During the first quarter of this year, investors put $508bn into cash funds, marking the largest quarterly inflow since the start of the Covid-19 pandemic three years ago, according to Bank of America Corp (NYSE:WFC). strategists citing data from EPFR Global. They revealed that more than $100bn had flowed into money-market funds in the past two weeks alone.
Bond Market Rally Concerns
Bond markets have experienced a sharp rally for U.S. government debt, leaving investors and analysts concerned about a potential reversal. After investors lowered their expectations for how high the Federal Reserve would raise interest rates, Treasury prices surged. However, with banks stabilizing, a resumption of the Fed’s inflation-fighting efforts could result in declines as rapid as the rally. This potential bond selloff could spell bad news for stocks, which have managed to make gains despite the turbulent trading conditions experienced so far this year.
UK Stock Performance Criticized
A top UK fund manager, Nick Train, has defended domestic pension funds for reducing their exposure to London-listed stocks, arguing that the City has fallen behind global equity markets. He stated that the “dismal capital performance” of the UK over the past two decades and the lack of globally significant technology champions are reasons for London’s unwelcome reputation as a “backwater” in 21st-century equity markets.
Virgin Orbit Reduces Workforce
Virgin Orbit Holdings Inc. (NASDAQ:VORB), has reduced its workforce by about 85% (approximately 675 employees) to reduce expenses, as the company has been unable to secure meaningful funding. The company expects the workforce reduction to be substantially complete by April 3rd. Following this announcement, shares in the company plummeted 39% to 21 cents in after-hours trading.
Ford Increases F-150 Lightning Price
Ford Motor Co. (NASDAQ:FORD) has once again increased the starting price of its all-electric F-150 Lightning truck, after temporarily halting production and shipments to address a battery issue. The cheapest of the company’s electric trucks now costs $59,974, marking the latest in a series of price increases since the full-size, battery-powered pickup trucks began production. The company attributes the price increases to rising raw material costs. The automaker sold 15,600 Lightnings in 2022 and aims to increase output to an annualized rate of about 150,000 vehicles by late this year.
Bed Bath & Beyond Fundraising Deal Terminated
Bed Bath & Beyond Inc. (NASDAQ:BBBA) has terminated its fundraising deal with hedge fund Hudson Bay Capital Management LP after reporting another sharp drop in sales in the most recent quarter. The company now plans to sell up to $300 million of common stock in the open market in an effort to stave off bankruptcy. Shares in the company fell 26% on Thursday, hitting an all-time low of 59 cents. The company’s market capitalization now stands at roughly $70 million.
JD.com Units Plan Hong Kong IPOs
JD.com Inc.’s (NASDAQ:JD) property and industrials units are planning to raise about $1 billion each in Hong Kong initial public offerings. This will add to the supply of potentially sizable deals that could hit the market this year. JD.com plans to hold on to about 50% of each company after they go public. The company’s Nasdaq-listed American depositary receipts rose 7.8% on Thursday to $44.40, while its Hong Kong-listed shares closed 5.4% higher on Friday.