1. Asian Stocks Follow US Rally Before CPI Report: Markets Wrap

    (Bloomberg) — Stocks in Asia rose, following a big tech-led rally in US benchmarks, as investors look to key inflation data later Wednesday for clues on the Federal Reserve’s next steps. The MSCI Asia Pacific Index – a gauge for benchmarks in the region inched higher in early trading, extending gains after closing at a two-year high Tuesday.

  2. Biden Accuses China of ‘Cheating’ on Trade, Imposes New Tariffs

    (Bloomberg) — President Joe Biden unveiled sweeping tariff hikes on a range of Chinese imports, in an election-year bid to bolster domestic manufacturing in critical industries. The US president cast the move as a necessary action to protect US workers and businesses from companies that he accused of stealing, cheating and dumping underpriced goods into international.

  3. Powell Reiterates Fed Likely to Keep Rates Higher for Longer

    (Bloomberg) — Federal Reserve Chair Jerome Powell said the US central bank must be patient and wait for evidence that inflation continues to cool, doubling down on the need to keep borrowing costs elevated for longer. The Fed chief said recent inflation figures indicate it will likely take more time than previously thought to attain the confidence needed to lower interest.

  4. US Producer Prices Top Forecasts, But Details Offer Some Relief

    (Bloomberg) — US producer prices rose in April by more than projected, though key components that feed into the Federal Reserve’s preferred inflation gauge were more muted. The producer price index for final demand increased 0.5% from a month earlier, driven largely by services and following a downwardly revised 0.1% drop in March, Bureau of Labor Statistics data showed.

  5. Japan’s Gloomy GDP Report May Create Challenges for Policymakers

    (Bloomberg) — Japan’s economy is likely to have contracted in the first three months of 2024 due in part to disruptions at car makers, clouding the growth outlook as the central bank attempts to set the right pace for policy normalization. A government report on Thursday is forecast to show that gross domestic product shrank at an annualized pace of 1.2%.

  6. Hogan Wins Senate Republican Primary in Maryland

    (Bloomberg) — Former Maryland Governor Larry Hogan won the Republican primary for the US Senate in Maryland, AP projected. Hogan beat six other candidates. He is vying to succeed Democrat Ben Cardin, who is not running for re-election. Republicans see Hogan as a strong candidate to flip the seat to their party.

  7. S&P 500 Losing Sheen Against Credit May End in Tears: Macro View

    (Bloomberg) — Investors are paying the most since the global financial crisis to own US stocks rather than similar-rated credit — which may crimp prospective returns from equities. The S&P 500 Index promises an earnings yield of 4.64%, compared with the 5.74% yield on offer from BBB rated corporate debt.

  8. Goldman Looks to Entice Wealthy Clients to Plow Cash in Gulf

    (Bloomberg) — Goldman Sachs Group Inc. is planning to launch several investment strategies that will allow the firm and its wealthy clients to deploy capital in the Gulf’s public markets. Companies based in the Middle East currently comprise about 7% of the widely tracked MSCI Emerging Markets Index and the bank’s research suggests that could grow to as much as to 10%, Marc Nachmann.

  9. Traders Set Up for Post-CPI Pop, Targeting 10-Year Yield at 4.3%

    (Bloomberg) — Traders in US Treasury options are positioning for a bond rally and sharp drop in yields in the aftermath of crucial inflation data to be released on Wednesday. Heavy buying over the past week has centered on options that would stand to benefit from US 10-year yields dropping to roughly 4.3%.

  10. Anglo Goes for Bold Breakup Plan in Move to Fend Off BHP

    (Bloomberg) — Anglo American Plc will exit diamond, platinum and coal mining in a massive restructuring designed to fend off a £34 billion ($43 billion) bid from rival BHP Group and turn itself into a copper giant. Anglo’s hand was forced by BHP’s approach which it has twice rejected but the move also responds to pressure from shareholders.

  11. Alibaba finished 1.85% higher in the Hong Kong Stock Exchange leading up to the company’s fourth quarter results.

    It reported a revenue of 221.87 billion yuan, +6.6% YoY, beating estimates of 219.79 billion yuan. However, it reported net income of 3.27 billion yuan, -86% YoY, due to net loss from its investments in publicly traded companies during the quarter. As a result, the ADR (BABA UN) traded 6.02% lower.

  12. Tencent Holdings reported upbeat first quarter earnings on Tuesday, buoyed by rapid growth in its high-margin businesses.

    It reported a revenue of 159.50 billion yuan, +6.3% YoY, beating estimates of 158.81 billion yuan. The company also reported a net income of 41.89 billion yuan, +62% YoY, beating estimates of 34.5 billion yuan.

  13. Brenntag shares fall as much as 8.1%, their steepest decline since November 2022, after the German chemicals distribution firm’s first quarter missed estimates due to pricing pressures. The company reduced its guidance for the full year to the lower end of its range. Morgan Stanley sees further consensus downgrades.

    YEAR FORECAST: Sees operating Ebita low end of EU1.23 billion to EU1.43 billion, saw EU1.23 billion to EU1.43 billion, estimate EU1.26 billion (Bloomberg Consensus). FIRST QUARTER RESULTS: Operating gross profit EU984.4 million, estimate EU1 billion; Essentials operating gross profit EU698.1 million, estimate EU643.8 million; Specialties operating gross profit EU286.3 million, estimate EU354.9 million; Profit after tax EU143.7 million, estimate EU181.2 million; EPS EU0.97, estimate EU1.03; Essentials revenue EU2.70 billion, estimate EU2.39 billion; Specialties revenue EU1.30 billion, estimate EU1.74 billion; Sales EU4.00 billion, estimate EU4.26 billion; Operating Ebita EU259.7 million, estimate EU280.2 million.

  14. Illumina shares rise as much as 6.1% after RBC Capital Markets analyst Conor McNamara (outperform, PT $253) highlighted positives from a conversation with executives, writing in a note that there is “significant potential upside in the share price” if the gene-sequencing company can improve revenue growth and margins.

    The analyst sees “the potential for beats and raises throughout 2024,” given comments on customer order patterns and initiatives to raise prices in the first quarter. Comments indicate that the company can continue to innovate while reducing R&D investment as a share of sales, McNamara wrote. Growth potential isn’t priced into the stock.

  15. Oracle shares are jumping 2.8% in midday trading, after The Information reported that Elon Musk’s xAI artificial intelligence startup is near a deal to rent the company’s AI servers.

    The deal would be for $10 billion, according to the report, which cited a person who has been involved in the talks.

  16. Vodafone shares rise as much as 3.8% after the telecom operator set full-year profit and cash flow guidance ahead of estimates.

    The German market, which now accounts for more than 45% of Vodafone’s Ebitda following a disposal of Spanish and Italian operations, saw service revenue growth ahead of expectations. It expects to retain 50% of its TV customers after a new local law kicks into effect. FOURTH QUARTER RESULTS: Organic service revenue +7.1%; Germany organic service revenue +0.6% vs. -2.8% y/y, estimate -0.11%; UK organic service revenue +3.6% vs. +3.8% y/y, estimate +4.5%; Other Europe organic service revenue +5.5% vs. +3.6% y/y, estimate +4.04%; UK service revenue EU1.41 billion, +6.8% y/y, estimate EU1.4 billion (Bloomberg Consensus); Germany service revenue EU2.84 billion, +0.6% y/y, estimate EU2.82 billion.

  17. Alcon shares rise about 9% after first-quarter results from the Swiss eye-care product manufacturer beat expectations, helping derisk full-year estimates, according to RBC. Citi described it as a “broad-based” beat, while Morgan Stanley noted concern related to FX heading into the print.

    FIRST-QUARTER RESULTS: Core EPS 78c vs. 70c y/y, estimate 72c (Bloomberg Consensus); Net sales and other revenue $2.46 billion, +4.5% y/y, estimate $2.45 billion; Surgical net sales $1.34 billion, +2.6% y/y, estimate $1.36 billion; Vision Care net sales $1.11 billion, +7.5% y/y, estimate $1.09 billion. YEAR FORECAST: Sees core EPS $3.00 to $3.10, estimate $3.01; Still sees net sales $9.9 billion to $10.1 billion, estimate $10 billion.

  18. Google I/O wrap-up: Gemini AI updates, new search features and more

    Google on Tuesday hosted its annual I/O developer conference. The company announced a range of artificial intelligence products, from new search and chat features to AI hardware for cloud customers. Google rolled out updates to Gemini 1.5 Pro, its AI model that will soon be able to handle even more data, and a new smaller Gemini 1.5 Flash AI model.

  19. Putin wants 3 things from Xi as he seeks to deepen Russia-China ties

    Russian President Vladimir Putin’s meeting with Chinese leader Xi Jinping in China this week is the latest sign of the deepening strategic ties between both sides. Putin will make a two-day state visit to China from Thursday at the invitation of Xi, it was announced on Tuesday. This will be the Russian leader’s first overseas trip since Putin kicked off his fifth term in office last week.

  20. Baidu’s robotaxi unit expects to turn profitable next year

    Chinese tech company Baidu said Wednesday its Apollo Go robotaxi arm expects to turn profitable next year. Baidu is one of the major players in China’s nascent robotaxi market and received permission from a Beijing city district to begin charging fares in November 2021. Apollo Go operated about 839,000 rides in the last three months of 2023, according to Baidu’s latest earnings report. The company is due to release quarterly results Thursday.

  21. Asia markets track Wall Street gains ahead of key U.S. inflation data

    Asia-Pacific markets were mostly higher Wednesday, tracking Wall Street gains overnight that saw the Nasdaq Composite index hit a fresh record closing high despite strong inflation data. The producer price index reading for April came in at 0.5%, above the 0.3% those economists polled by Dow Jones had expected. The initial market reaction was negative but stocks subsequently rose as March wholesale prices were revised down to show a 0.1% decline.

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