- Asian Stocks Climb After US Gain on Rates Optimism: Markets Wrap
(Bloomberg) — Asian stocks rose in early trading, following Wall Street’s gains on optimism the Federal Reserve will start cutting interest rates this year. The yen dropped. Japan’s benchmark Nikkei 225 climbed as much as 1.6% as the market reopened on Tuesday after a holiday. Australian shares rose 0.7%. - Xi Urges Macron to Help China to Avoid a ‘New Cold War’
(Bloomberg) — Chinese President Xi Jinping called on France to help fend off a “new Cold War” as the European Union increasingly aligns with US concerns over security risks and trade tensions. He told French President Emmanuel Macron the two nations should uphold mutual benefits, and jointly oppose decoupling and the disruption of supply chains, the official Xinhua News. - FDIC’s Workplace Probe Concludes With Call for Major Changes
(Bloomberg) — A probe into the Federal Deposit Insurance Corp.’s workplace found credible allegations of a toxic environment for bank examiners and that the agency’s culture needs an overhaul, according to four people with direct knowledge of the findings. The report by law firm Cleary Gottlieb Steen & Hamilton says the FDIC needs a “structural and cultural. - Israel Says a Cease-Fire Plan Backed by Hamas Falls Far Short
(Bloomberg) — The Palestinian militant group Hamas said it had agreed to a cease-fire proposal for the Gaza Strip, but Israel’s war cabinet unanimously rejected it as “far from Israel’s necessary demands,” dashing hopes for an immediate pause in the fighting. Israel vowed to continue “its operation in Rafah to exert military pressure on Hamas”. - Fed’s Barkin Says Full Impact of High Interest Rates Yet to Come
(Bloomberg) — Federal Reserve Bank of Richmond President Thomas Barkin said he expects high interest rates to slow the economy further and cool inflation to the central bank’s 2% target. Barkin, who votes on monetary policy this year, said Monday the strength of the labour market offers the Fed time to gain confidence that inflation is moving sustainably. - Big Take: Jane Street, Citadel Securities Race Into Bond Markets
(Bloomberg) — They subdued stocks, claimed a chunk of foreign exchange and muscled into the commodity market. Now high-tech trading firms like Citadel Securities LLC and Jane Street are pushing deeper than ever into fixed income. Riding a wave of digitization and a boom in ETFs, electronic market makers — who keep securities moving by continuously buying and selling in lightning-fast transactions — are expanding their reach in government bond trading and finally gaining ground in the once-untouchable world of corporate debt. - Gold Extends Advance on Rate-Cut Optimism, Mideast Tensions
(Bloomberg) — Gold edged higher on signs the Federal Reserve will implement rates cuts this year, while an escalation in geopolitical tensions in the Middle East stoked haven demand. Bullion closed 1% higher on Monday, with investors weighing dovish remarks from US policymakers. - Brookfield Buys Stake in Private Debt Firm Castle lake’s Fees
(Bloomberg) — Brookfield Asset Management struck a partnership with Castle lake LP to get a majority share of the private debt firm’s fee-related earnings, another moves in the Canadian investing giant’s effort to grow its credit business. Brookfield Asset will invest about $1.5 billion, including money that the firm’s reinsurance arm will place in Castle lake’s strategies. - Hedge Fund LMR Partners Adds US Oil Strategy in Commodities Push
(Bloomberg) — Hedge fund LMR Partners added a US-based oil strategy earlier this year and has been bolstering its commodities team to profit from the increasingly popular business, according to an investor letter seen by Bloomberg. The multi-strategy firm recently hired Mike Severo, who formerly traded oil, exotics and commodity index options at Goldman Sachs Group Inc. - Exxon Sees Chevron Arbitration Going Into 2025, CEO Woods Says
(Bloomberg) — Exxon Mobil Corp. Chief Executive Officer Darren Woods foresees arbitration with Chevron Corp. over a premier Guyanese asset stretching into 2025 due to the importance of the case to both companies. The companies still need to appoint a third arbitrator before they go into the discovery phase, Woods said during an interview on CNBC on Monday. - Palantir shares fell as much as 11% in extended trading, as the market appeared to be unimpressed by the company’s forecast for the full year.
Palantir sees full year forecast revenue between $2.68 billion and $2.69 billion, which was previously $2.65 billion to $2.67 billion, meeting analysts’ estimates of $2.68 billion. It also sees its operating profit to range between $868 million to $880 million, previously $834 million to $850 million, beating estimates of $846.6 million. - ANZ Group reported its first half earnings results today which saw its cash profit missing estimates.
The company reported a cash profit of A$3.55 billion, -7.2% YoY, missing its estimates of A$3.63 billion. It also reported an interim dividend per share of A$0.83 vs A$0.81 YoY, beating estimates of A$0.81. ANZ Group also announced a $2 billion shares buyback as part of its capital management plan. - Berkshire Hathaway’s cash pile hit yet another record as billionaire investor Warren Buffett confronted a dearth of big-ticket deals. Operating earnings also rose, buoyed by his collection of insurance businesses.
The firm’s cash increased to $189 billion at the end of the first quarter, topping the record it set at year-end. The company also reported first-quarter operating earnings of $11.2 billion, versus $8.07 billion for the same period a year earlier. Buffett, 93, has long decried a lack of meaningful deals that he said would give the firm a shot at “eye-popping” results. Even as the company ramped up acquisitions in recent years, including an $11.6 billion deal to buy Alleghany Corp. and its purchase of shares in Occidental Petroleum Corp., Berkshire has struggled to find sizable deals. That’s left Buffett with more cash — what he called an unrivalled mountain of capital — than he and his investing deputies could quickly deploy. - Advanced Micro Devices shares rose 3.4% after Phillip Securities analyst Jonathan Woo raised the recommendation to buy, from accumulate, citing “recent price movements” and writing that the chipmaker stands to benefit from artificial intelligence and the shift to the cloud.
“We believe AMD will benefit from increasing AI-related investments while also gaining traditional server market share from enterprise transition to the Cloud,” the analyst wrote. The company will also gain PC market share on the strength of its CPU products, Woo wrote. The analyst sees “prolonged weakness” in the Gaming and Embedded segments. PT cut to $190, from $195. - Tyson shares fell 5.7% after an earnings conference call where management discussed chicken production headwinds, ongoing beef challenges and a pressured consumer.
SECOND-QUARTER RESULTS: Adjusted EPS 62c vs. loss/shr 4.0c y/y, estimate 40c. Sales $13.07 billion, -0.5% y/y, estimate $13.15 billion. Sales volume -1.5%. Adjusted operating income $406 million vs. $65 million y/y, estimate $286 million. Adjusted operating margin 3.1% vs. 0.5% y/y, estimate 2.05%. COMMENTARY: Sales in the chicken segment dropped 8.2% y/y, primarily due to a decline in volumes, which were down 6.1% on lower production. While the USDA forecasts industry chicken production to be up about 1% in 2024, Tyson said on the call that it expects production to be more like flat to up 0.5%. - Palantir Technologies shares fell 8.4% in afterhours trading Monday as the market appeared unimpressed by the company’s outlook for annual sales after the stock has tripled in the past year.
The company nudged its annual revenue forecast slightly higher to a range of $2.68 billion to $2.69 billion. Analysts expected $2.68 billion, on average. The company raised its outlook for adjusted operating income to a range of $868 million to $880 million. Analysts, on average, estimated $846.6 million. Palantir, co-founded by Peter Thiel, develops software and analysis tools for companies and government agencies allied with American interests. Its roots are in government sales — the venture arm of the US Central Intelligence Agency was among the initial backers — but “unbridled and growing demand” from US companies for its artificial intelligence software now drives the business, Chief Executive Officer Alex Karp told shareholders in a letter. - Li Auto shares rose 4.3% after the Chinese electric-vehicle maker posted strong orders for its first model priced under 300,000 yuan, or equivalent of nearly $41,452.
Li Auto said Saturday that orders of its L6 model reached 30,000 units since its launch on April 18. Sentiment was further buoyed by a mid-morning update Monday that the number had risen further to 41,000. The orders of the L6, Li Auto’s newest model, helped investors look past the company’s lacklustre April deliveries, which expanded at the lowest rate in almost two years, analysts said. Citi analyst Jeff Chung described the May order numbers as strong, with orders so far setting the stage for a potential acceleration in demand this month. He kept a buy rating on the shares. - UBS swings back to profit and smashes earnings expectations for the first quarter
UBS on Tuesday reported a net profit of $1.8 billion for the first quarter of the year, smashing analyst expectations. It is the Swiss banking giant’s first earnings report in the black since it completed the acquisition of fallen rival Credit Suisse in June 2023, as it continues to undergo a mammoth integration project to unite the businesses. Lower expenses following the takeover of Credit Suisse, helped the bank post a net profit of $1.8 billion in the first quarter, ahead of a consensus forecast in an LSEG poll of $721.4 million. - Disney quarterly results are on deck.
Disney reports second-quarter earnings before the bell Tuesday. This will be the company’s first earnings call since it won a proxy fight against Trian Partners. Analysts expect earnings per share of $1.10 and revenue of $22.11 billion, according to LSEG. Wall Street will also be looking for updates on its streaming and theme parks businesses. - Amazon’s AWS to invest nearly $9 billion in Singapore to grow cloud infrastructure
Amazon Web Services on Tuesday said it will pump another $9 billion into Singapore over the next five years to grow its cloud infrastructure and services in the country. “Starting with our investment in Singapore in 2010, AWS has continued to strengthen their commitment to the ASEAN region, sharing the uplift [in] digital skills across the nations, providing secure and resilient infrastructure consistently across the region,” Priscilla Chong, country manager of AWS Singapore, said on Tuesday. - South Korea stocks lead gains in Asia markets; RBA keeps benchmark rate unchanged at 4.35%
South Korean stocks led gains in Asia-Pacific markets on Tuesday after Wall Street rose overnight on expectations that the Federal Reserve could cut interest rates soon. South Korea’s Kospi gained over 2% to hit a one-month high, powered by heavyweights Samsung Electronics and SK Hynix. The small-cap Kosdaq rose 0.76%. The Reserve Bank of Australia held its benchmark lending rate at 4.35% for the fourth meeting in a row.
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