US Equities Rise on Soft Inflation Data
US equities traded higher on Thursday as the latest readings on jobs and factory-gate inflation came in slightly softer than expected, which provided a boost to those hoping for a potential end to the era of aggressive interest rate hikes by the Federal Reserve. The S&P 500 (SPI:SP500) rose 0.3%, while the Nasdaq 100 (NASDAQI:NDX), which is more sensitive to interest rate changes, gained 0.9%.
Germany Pressures Intel for More Investment
Germany is pressuring Intel (NASDAQ:INTC) to expand its plans for a €17 billion chip plant in exchange for higher subsidies, in what is already set to be the country’s largest foreign direct investment since World War II. The US semiconductor group was initially due to receive €6.8 billion in subsidies from Berlin to build its manufacturing plant in Magdeburg, but German officials have indicated that they could increase the financial support only if Intel invests more.
LSE to Clear Crypto Derivatives
The London Stock Exchange Group announced plans to begin clearing crypto derivatives, joining the race among global exchanges to capture a share of the rising institutional demand for trading digital assets. The UK group will use the Paris arm of its clearing subsidiary, LCH, to manage the risks associated with bitcoin futures and options traded on GFO-X, a UK regulated marketplace. This move comes despite bankruptcies among crypto companies, declines in token prices, and enforcement actions by US regulators.
UK Housing Market Recovery Expected
HSBC Holdings Plc (NYSE:HSBC) analysts believe that the UK housing market is on a path to recovery and are recommending clients to invest in the country’s homebuilder stocks, which have been impacted by the pandemic. The bank expects mortgage rates to start falling from the middle of the year, which is expected to bolster a typically quieter second-half of the year. Sales reservations, or agreements to buy homes before they are built, are also expected to return to pre-pandemic levels between 2025 and 2027, according to the bank.
Tesco Struggles with Inflation Impact
Tesco (LSE:TSCO), the UK’s largest supermarket chain, announced that it would struggle to increase profits this year due to “unprecedented levels of inflation” across its supply chain. Chief executive Ken Murphy said the group has been grappling with rising costs of products from suppliers while also trying to prevent customers from being lured away to discount chains. Tesco disclosed that retail adjusted operating profit, which excludes petrol, is expected to be “broadly flat” this financial year, as the measure of profits fell 6.3% to £2.4 billion in the year to February, in line with expectations. Overall pre-tax profits halved to £1 billion.
Delta Air Lines Reports Q1 Loss
Delta Air Lines Inc. (NYSE:DAL) reported a Q1 loss, but expects strong summer bookings to boost profits. Delta’s net loss for the first three months of the year was $363 million. Excluding one-time costs, Delta reported a profit of $163 million or 25 cents a share, in line with guidance but below analysts’ expectations. Delta anticipates adjusted earnings of $2 to $2.25 a share in Q2, with revenue up 15% to 17% compared to the same period in 2022. Delta CEO Ed Bastian stated that while demand remains on track, consumer behavior has been unpredictable.
Google Seeks Dismissal of Antitrust Case
A judge will hear Google’s (NASDAQ:GOOG) arguments for dismissing the landmark antitrust case over its search-engine dominance. U.S. District Judge Amit Mehta has scheduled an oral argument on Google’s request for judgment in its favor in a 2020 civil lawsuit brought by the Justice Department. Google is also seeking dismissal of a similar lawsuit by 38 state attorneys general. Google has argued in court filings and corporate blog posts that users choose its search engine due to its superior product, not anticompetitive agreements.
WisdomTree Shareholder Dispute
WisdomTree’s (NYSE:WT) largest shareholder is attempting to gain control of the board of the $90.7 billion U.S. asset manager. Jonathan Steinberg, WisdomTree’s founder and CEO, plans to launch a blockchain-enabled digital assets platform, but this is opposed by Graham Tuckwell, the largest shareholder. Tuckwell argues that the company should focus on its core fund management business and operational performance, leading to an acrimonious dispute over strategy.
CVC Eyes Network International Acquisition
A private equity consortium backed by CVC Capital Partners is in talks for a potential acquisition of Middle Eastern credit card processor Network International Holdings Plc. The investor group, including Francisco Partners, has made a preliminary proposal to take Network private, confirming an earlier Bloomberg News report. Network has been in discussions with advisers after attracting takeover interest from CVC. Shares of the company surged 25% in London, putting Network on track for its biggest daily gain since November 2020, with a market value of £1.6 billion ($2 billion) at 2:14 p.m. Thursday.
BP to Invest $9 billion in Gulf of Mexico
BP (NYSE:BP) has commenced operations at its new $9 billion offshore platform in the oil-rich US Gulf of Mexico, signaling a slower transition away from fossil fuels due to increasing energy security concerns. The Argos deepwater platform, BP’s largest project in the region in over a decade, is now producing oil and gas from fields thousands of feet beneath the water, with a capacity to pump 140,000 barrels per day. Bernard Looney, BP’s CEO, emphasized that this investment demonstrates the company’s commitment to the current energy system. Additionally, he noted that the Argos platform will further solidify BP’s position as the largest producer in the Gulf of Mexico for years to come.