1. Asian Stocks Fall, Dollar Rallies on US Price Data: Markets Wrap

    (Bloomberg) — Stocks in Asia fell after higher-than-expected US inflation data supported the view the Federal Reserve may keep interest rates higher for longer. Equity benchmarks in Japan and Australia and share futures for Hong Kong all slipped, mirroring selling on Wall Street on Wednesday.

  2. Amazon Dealt $525 Million Jury Verdict Over Cloud Tech Patents

    (Bloomberg Law) — Inc. must pay $525 million to software firm Kove IO Inc. for infringing three patents covering distributed cloud storage technology, an Illinois federal jury found Wednesday. The final judgment said the infringement was not willful, and dismissed Amazon’s counterclaims asserting non-infringement, invalidity, and unpatentability.

  3. US Sees Imminent Missile Strike on Israel by Iran, Proxies

    (Bloomberg) — The US and its allies believe major missile or drone strikes by Iran or its proxies against military and government targets in Israel are imminent, in what would mark a significant widening of the six-month-old conflict, according to people familiar with the intelligence.

  4. Singapore Set to Keep Monetary Policy Tight, May Ease in October

    (Bloomberg) — Singapore’s central bank will likely maintain tight monetary policy settings for a fourth straight time as inflation remains elevated though an easing is widely expected later this year. All 20 economists surveyed by Bloomberg forecast the Monetary Authority of Singapore.

  5. Japan’s FX Chief Warns No Options Ruled Out After Yen Slide

    (Bloomberg) — Japan’s top currency official warned that authorities will consider all their options for the foreign exchange market and are ready to respond to any event after the yen fell to its lowest level versus the dollar since 1990. “Whether this involves currency intervention or not, we authorities are prepared for all situations all the time.

  6. Consumer prices rose 3.5% from a year ago in March, more than expected

    The consumer price index accelerated at a faster-than-expected pace in March, pushing inflation higher and likely dashing hopes that the Federal Reserve will be able to cut interest rates anytime soon. The CPI, a broad measure of goods and services costs across the economy, rose 0.4% for the month, putting the 12-month inflation rate at 3.5%, or 0.3 percentage point higher than in February, the Labor Department’s Bureau of Labor Statistics reported Wednesday. Economists surveyed by Dow Jones had been looking for a 0.3% gain and a 3.4% year-over-year level.

  7. Great Escape to Pivot Peril – Upgrading Global Economic Outlook

    (Bloomberg Intelligence) — Bloomberg Economics’ forecast is for the global economy to grow 2.9% in 2024, down from 3.1% in 2023. That’s some way below the pre-Covid run rate, but still marks an upward revision from December – when we expected 2.7%. Relative to expectations that the price for taming runaway inflation would be a rash of recessions, a year of modestly slower global growth looks like a great escape.

  8. Traders See Fed Waiting Until After Summer to Cut as Yields Soar

    (Bloomberg) — Investors are signalling the Federal Reserve will cut interest rates just twice this year, starting in September, after a fresh round of hot inflation sent Treasury yields soaring to 2024 highs. This turn of events was unthinkable at the start of the year, when the consensus view was for six cuts totalling 1.5 percentage points, beginning in March.

  9. UBS Faces Higher Capital Requirement in Swiss Bank Reform

    (Bloomberg) — UBS Group AG faces a “substantial” increase in regulatory capital requirements under reforms that the Swiss government is advocating for in the wake of the collapse of Credit Suisse. The Federal Council is proposing that systemically important Swiss banks must hold significantly more capital against their foreign units.

  10. Powell’s Soft-Landing Dream in Danger as Traders Hedge Inflation

    (Bloomberg) — Signs that inflation has yet to release its grip on markets have simmered for weeks. Now they’re boiling over after Wednesday’s hotter-than-forecast consumer price index sent stocks and bonds reeling. With gold, oil and cryptocurrency rallying of late amid fresh demand for inflation hedges, the March CPI report unleashed a rout across Wall Street.

  11. ‘Tokenized Hedge Fund’ Rakes in Crypto Billions With 37% Yield

    (Bloomberg) — A crypto token that aims to replicate a common hedge-fund trade is attracting billions of dollars’ worth of investment and widespread buzz in the market. Yet the project, known as Ethena, is also stoking skepticism about the sustainability of its yields that are currently about 37%.

  12. Alibaba shares rose 2.2% after founder Jack Ma says the company is successfully fixing the “diseases of a big company”.

    In his post, Ma said Alibaba was embracing a more aggressive start-up mindset. “We are starting to operate on the diseases of a big company,” Ma wrote. While Alibaba once suffered from “slow decision-making,” it is now a firm “where efficiency and market leadership are paramount, making our company once again simple and agile,” he wrote. Ma also praised Alibaba CEO Eddie Wu and chair Joseph Tsai, two Alibaba co-founders who took the reins of the company in a September management reshuffle. Ma backed up his call with his wallet, by reportedly buying $50 million worth of Alibaba shares in the last quarter of 2023. Tsai’s family office also bought an additional $150 million worth of shares.

  13. Shares of US real estate companies dropped on Wednesday, falling more than the broader market as investors mulled the outlook for Fed rate cuts following hotter than expected consumer price index data.

    An index of homebuilding stocks slumped, with D.R. Horton dropping 6.4%. Luxury builder Toll Brothers falls 4.6% and Lennar is down 5.8%, while KB Home sinks 4.9%. Interest-rate sensitive REITs also plunged, with a broad gauge heading for its worst day since 2022.

  14. Delta Air Lines fell 2.3% on Wednesday, reversing earlier gains, after the carrier released first quarter results. While Delta’s update topped estimates thanks to a recovery in corporate travel, US inflation data released on Wednesday showed airfares dropped 7.1% in March from the prior year, the biggest decrease since November.

    Separately, oil gained as geopolitical jitters resurfaced. Jet fuel is one of the airline industry’s biggest expenses. FIRST QUARTER RESULTS: Adjusted EPS 45c vs. 25c y/y, estimate 36c. EPS 6.0c vs. loss/shr 57c y/y. Adjusted revenue $12.56 billion, estimate $12.5 billion. Passenger load factor 83% vs. 81% y/y, estimate 81.6%. Available seat miles 65.54 billion, +6.8% y/y, estimate 65.10 billion. SECOND QUARTER FORECAST: Sees adjusted EPS $2.20 to $2.50, estimate $2.23. Sees 2Q total revenue up 5% to 7% year-over-year.

  15. US-listed shares of TSMC rose 0.6% Wednesday, after the Taiwanese chipmaker reported better-than-expected sales growth for the first quarter after the market closed in Taiwan.
    The company reported a better-than-expected 16% rise in March-quarter sales to about NT$592.6 billion ($18.5 billion), versus the NT$579.5 billion average projection. Needham (buy, PT to $168 from $133): “TSMC is one of the best AI pick-and-shovel stories,” and while it could see some impact from a recent earthquake, “we expect TSMC to make up most of the lost sales in 3Q24 and meet its full-year growth target”.

  16. Vertex Pharmaceutical Inc. has agreed to buy Alpine Immune Sciences Inc. for a total equity value of about $4.9 billion, or $65 a share in cash for Alpine, which is 67% more than Alpine’s closing price of $38.94 on Tuesday.

    The company CEO Reshma Kewalramani believes this deal will further Vertex’s strategy of making drugs for serious diseases with high unmet need in specialty markets. Vertex’s latest big deal came in 2019, when it bought Semma Therapeutics, a private biotech developing a treatment for Type 1 diabetes, for $950 million in cash.

  17. Meta Platforms Inc. is utilising a new homegrown chip to power artificial intelligence (AI) services, to decrease its reliance on semiconductors from Nvidia Corp. and other outside companies.

    Meta announced on Wednesday that the chip is the latest version of the Meta Training and Inference Accelerator (MTIA), which ranks and recommends content across Facebook and Instagram. The first MTIA product was released last year. In October 2023, Meta announced that it would spend as much as $35 billion on infrastructure to support AI, including data centres and hardware. The company’s CEO, Mark Zuckerberg, believes that AI will continue to be Meta’s biggest investment area in 2024.

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