Mixed Performance for US Stocks
US stocks showed mixed performance as investors awaited inflation data that could impact Federal Reserve interest-rate decisions. The Nasdaq 100 (NASDAQI:NDX), heavily influenced by tech stocks, edged lower for the fifth session in the past six, while the S&P 500 (SPI:SP500) fluctuated between gains and losses. The yield on two-year Treasuries, which is closely watched for policy implications, remained stable around 4%.
European Stocks Up
European stocks saw gains on Tuesday as investors took confidence from a late rally on Wall Street and anticipated potential interest rate increases from the European Central Bank and US Federal Reserve. The Stoxx 600 (STOXX:SSXP), a broad European index, rose 0.5%, while Germany’s Dax (DBI:DAX) and France’s Cac 40 (EU:PX1) were up 0.5% and 0.9% respectively. London’s FTSE 100 (FTSE:UKX) also climbed 0.4% after markets were closed for the Easter holiday.
US Corporate Risks
A new study from the US Chamber of Commerce revealed that tax changes, regulatory enforcement, and government policy shifts pose a greater threat to corporate profits compared to a decade ago. The study analyzed annual reports of publicly traded companies in the S&P 500 (SPI:SP500) index and found that mentions of potential risks from government action increased by 27% in 2021 compared to 2011. In contrast, risks from non-governmental forces remained relatively stable during the same period.
Glencore Increases Takeover Bid
Glencore (LSE:GLEN) has sweetened its hostile takeover bid for Teck Resources with a cash offer to buy out Teck shareholders’ stake in a coal-focused spin-off, along with granting them a 24% stake in a separate industrial metals business. The revised proposal allows investors to choose cash instead of shares in the coal spin-off, while the overall valuation of the deal remains the same as the original bid at nearly $23 billion. This move by Glencore increases pressure on Teck Resources’ board to reconsider their rejection of the deal.
BP Acquires Stake in Viking CCS
BP (NYSE:BP) has acquired a 40% stake in the UK’s Viking CCS project from Harbour Energy as the government looks to accelerate plans for carbon capture and storage. The Viking project aims to capture up to a third of the UK’s annual target of 30 million tonnes of carbon dioxide by 2030 by repurposing old depleted gas fields off the Humber region coast. BP’s investment provides significant support for the project, which is among the leading contenders for the government’s next phase of approvals under its Track 2 carbon capture development process.
Taiwanese ETF Assets Reach Record Highs
Taiwanese exchange traded fund assets have reached record highs, driven by younger investors influenced by online influencers. Total ETF assets grew from NT$146 billion ($4.8 billion) in February 2018 to a record high of NT$945 billion as of the end of February, making ETFs the most popular fund type in Taiwan, accounting for 39.8% of all onshore domestic public funds’ assets under management. The surge in interest from young investors, with nearly 50% of those aged 25 to 34 investing in ETFs in 2022 compared to about 10% in 2018-2020, has been a key factor behind the rise of ETF investing in Taiwan, according to a survey by the Chung-Hua Institution for Economic Research.
Exxon Mobil Seeks Blockbuster Deal
Exxon Mobil Corp. (NYSE:XOM) is actively seeking a blockbuster deal in the U.S. shale industry, which could potentially trigger a wave of deal-making in the oil sector. The company has engaged in preliminary talks with Pioneer Natural Resources Co. (NYSE:PXD), a Texas-based fracker with a market capitalization of around $52 billion, about a potential acquisition. Exxon has also explored potential deals with other companies, signaling a trend of drillers in the Permian Basin, the hottest oil field in the U.S., looking to expand through acquisitions. Oil companies, with strong balance sheets and ample cash reserves, are well-positioned to pursue strategic targets.
South Korea Fines Google
South Korea has fined Google (NASDAQ:GOOG), a subsidiary of Alphabet Inc., approximately $32 million for abusing its dominant market position to hinder a local rival in the mobile app ecosystem. The Fair Trade Commission of South Korea has determined that Google engaged in anti-competitive practices to block the growth of rival app marketplace One Store Co. The regulator stated that game companies were induced to release their apps exclusively on the Google Play store in exchange for favorable promotion and support for overseas launches.
Rising Interest Rates Impact Rental Market
The impact of surging interest rates on the rental housing market is becoming evident as an apartment-building investor lost four Houston complexes to foreclosure. Applesway Investment Group, which borrowed nearly $230 million to purchase the buildings during the pandemic as part of a buying spree in Texas, defaulted on the loans. Arbor Realty Trust (NYSE:ABR), a publicly traded mortgage company, foreclosed on the properties. New York-based investment firm Fundamental Partners has acquired the Houston properties for an undisclosed amount, highlighting the challenges posed by rising interest rates in the multitrillion-dollar rental housing market.
Hyundai Announces $18.2B Investment in EVs
Hyundai Motor Group (KRX:005380) has announced plans to invest approximately 24 trillion won ($18.2 billion) by 2030 to increase production of electric vehicles (EVs). The South Korean automotive conglomerate aims to become one of the top three global EV manufacturers and intends to raise its annual output of EVs in Korea to 1.51 million units by the end of the decade, accounting for about 40% of the estimated global EV production of 3.64 million units. This ambitious investment and production target underscores Hyundai’s commitment to EVs and its ambition to be a major player in the growing global EV market.
Moderna Stock Declines After Vaccines Day
Moderna (NASDAQ:MRNA), a biotech company based in Cambridge, Massachusetts, experienced a decline in its stock price by over 5% in morning trading after its “Vaccines Day” event failed to impress investors. The company had announced plans to launch six major vaccine products in the coming years, including candidates targeting viruses such as norovirus and Lyme disease, which would be its first bacterial vaccine. However, Moderna also revealed that its first influenza vaccine candidate did not meet the criteria for early success in a Phase 3 trial. This news dampened investor sentiment, resulting in a decline in Moderna’s stock price from its mid-2021 peak.
Churchill Downs Sells $600M Junk Bonds
Churchill Downs Inc. (NASDAQ:CHDN), renowned for owning the racetrack that hosts the prestigious Kentucky Derby, is in the process of selling $600 million of junk bonds to repay existing debt. The initial price talk for the senior unsecured notes, which have an eight-year term and are set to price today, is estimated to be between 6.75% and 6.875%, as per sources familiar with the matter. An investor call is scheduled to be hosted at 11 a.m. today, with JPMorgan Chase & Co. (NYSE:JPM) leading the transaction.
Macquarie Considers India Highway Project
Macquarie Group (ASX:MQG) is reportedly considering the sale of a portfolio of nine highway projects in India, and may seek at least $1.5 billion for the assets, according to insiders. The firm is currently engaged in preliminary discussions with advisers regarding the potential deal, with the individuals requesting anonymity due to the private nature of the matter. Deliberations are still at an early stage, and Macquarie may ultimately decide to retain the assets. A representative for Macquarie declined to provide comments.