Wall Street Inflation Relief
Wall Street stocks rose and Treasuries rallied on Wednesday as US inflation data came in slightly lower than expected, alleviating pressure on the Federal Reserve to raise interest rates. The benchmark S&P 500 climbed 0.6% in early trade, led by technology and basic material stocks. The Nasdaq Composite, which is heavily weighted towards tech stocks, also gained 0.7% shortly after the New York open. These market movements followed the release of the latest US consumer price index report from the Bureau of Labor Statistics.
Elon Musk on Twitter’s Future
Elon Musk recently spoke to the BBC in a surprise interview, describing his ownership of Twitter as “quite painful,” but expressing optimism about the future of the social-media platform. Musk believes that Twitter is “headed to a good place” and expects the company to start making money in “a matter of months.” He estimated that Twitter’s workforce has decreased to around 1,500 employees, down from 8,000 when he acquired the company last year.
Bitcoin Flows and HODLing
Bank of America Corp (NYSE:BAC) strategists suggest that Bitcoin’s recent rally in 2023 may continue based on flows between cryptocurrency exchanges and personal digital wallets. According to their note, a net $368 million of Bitcoin was sent to personal wallets in the week through April 4, which coincided with the second-largest net outflow of Bitcoin from crypto exchanges this year. The strategists interpret this as a potential decrease in sell pressure, as investors transfer tokens from exchange wallets to their personal wallets with the intention of holding them for the long term, also known as “HODL” in the crypto sector meme.
Thoma Bravo’s Failed Acquisition
Thoma Bravo, a private equity group known for its acquisitions, lost out in its bid to purchase Qualtrics (NASDAQ:XM), a highly sought-after technology company. The deal was eventually sold for $12.5 billion due to concerns about potential antitrust issues with US authorities. Thoma Bravo had planned to merge Qualtrics with Medallia, a rival company it already owns, but the sale was eventually made to Silver Lake and Canada’s largest pension fund, CPP, in the largest leveraged buyout of the year. Qualtrics later revealed in a proxy statement that an unnamed bidder had offered $21 per share, even though Thoma Bravo had considered making a higher offer.
UK VCTs Raise £1 Billion
Venture capital trusts (VCTs) in the UK raised over £1 billion from retail investors for the second consecutive year, signaling continued interest in early-stage companies. According to the Association of Investment Companies, VCTs raised £1.08 billion in 2022-23, a 5% decrease compared to the record-setting inflows of £1.13 billion in the previous year. Despite the slight decline, the strong inflows are positive news for early-stage companies seeking funding, particularly as the wider venture capital market has experienced a retreat due to higher borrowing costs.
Volvo Group’s Record Results
Volvo Group (STO:VOLV-B), the second-largest truckmaker in the world, posted record results, surpassing analysts’ expectations and causing its shares to jump 8% on Wednesday morning. This success comes despite concerns about waning demand and supply chain disruptions for truck manufacturers. In January, Volvo had warned of potential supply chain disturbances, stoppages, and inflationary pressures. However, the company unexpectedly pre-released its first-quarter results, which showed an underlying operating profit increase of nearly 50% without providing an explanation for the better-than-expected figures.
Brookfield Acquires Triton
Brookfield Infrastructure Partners LP (NYSE:BIP) announced its acquisition of Triton International Ltd. (NYSE:TRTN), a company specializing in intermodal freight equipment leasing and maritime container management services, in a deal valued at $13.3 billion. In a joint statement, the two companies revealed that the acquisition will be made through a cash and stock transaction, with Triton’s common equity estimated at $4.7.
Walmart Closes Urban Stores
Walmart Inc. (NYSE:WMT) is closing four stores in Chicago, following the closure of several other urban locations, indicating a strategic shift away from stores that have not been as profitable as their rural and suburban counterparts. The company had hoped to attract new shoppers in urban markets, but has faced challenges in finding a profitable business model in those areas. This year, Walmart also closed a store near the White House in Washington, D.C., two locations in downtown Portland, Ore., and did not reopen a store in downtown Atlanta after a fire.
JPMorgan Ends Hybrid Work
JPMorgan Chase & Co. (NYSE:JP) has informed its managing directors that they are now required to be in the office every weekday, ending a hybrid-work practice that had been implemented during the pandemic. In a memo to staff, the bank’s operating committee emphasized the critical role of leaders in reinforcing the company’s culture and running its businesses.