May 05, 2022 TradeUP Thursday Latest news and bulletin updates
Dow Jones 33,854(-0.61%)
S&P 500 4,270(-0.70%)
(Opening price as of 05/05/2022 compared to last close)
Elon Musk gets $7bn for Twitter deal
Buffett bulks up on energy stocks
U.S. trade deficit widens to record $109.8bn
Biden launches review of China tariffs
Share Your Thoughts:
The Fed raised rates by a half point and announced plans to shrink its $9 trillion asset portfolio, what’s next? The Fed expects that 50 bps rate increases are on the table at the next couple of meetings. Powell’s remarks highlighted that the Fed’s policy would help cool off consumer demand by reducing the record number of job openings in the U.S.
S&P 500 indices fell in Jan, Feb, and Apr this year, while rising in Mar. The dates of the FOMC meetings are marked with a red circle in the above graphic. US broad indices declined before FOMC announcements but reversed their course after that. There were less market uncertainties after each FOMC meeting which helped the market rebound. But a lot of market noise rose from Fed officials’ remarks.
The next closely watched macroeconomic number is US CPI for April. Fed officials will adjust their monetary tightening pace based on that. The number was 8.5% for March, the biggest 12-month hike since 1981.
What’s your guess on April CPI?
Share your thoughts with us for a chance to win a free stock !
#1. Elon Musk gets $7bn from 19 investors for Twitter deal
• Musk secures about $7.1bn of new financing for his proposed $44bn Twitter buyout. The new financing allows Musk to cut the margin loan by half, down to an aggregate principal amount of $6.25bn from $12.5bn.
• Musk is expected to take over temporarily as Twitter CEO once his purchase is complete. Earlier this week, Musk said that he plans on launching Twitter IPO in as little as 3 years after buyout.
#2. Buffett bulks up on energy stocks
• Warren Buffett and Charlie Munger presided over the Berkshire Hathaway annual meeting on last Sat. During the meeting, Buffet said that the company has increased its stakes in Chevron.
• Buffett piled into the energy sector like never before in 1Q22, including increasing investment in Chevron and Occidental Petroleum. Berkshire bought $350m of stock in Occidental on Mon and Tue, increasing its holdings to a 15.2% interest of the energy company.
#3. U.S. trade deficit widens to record $109.8bn
• The trade gap in goods and services widened by 22.3% in Mar from the prior month to a seasonally adjusted $109.8bn. Inflation, supply imbalances and strong demand for imported goods widened the trade deficit, with clothing, computers, and vehicles driving the surge.
• Last week, US GDP unexpectedly contracted at a 1.4% annualized rate in Q1, driven by US goods trade deficit that raced to a record high in Mar.
#4. Biden launches mandatory review of Trump-era China tariffs
• The Biden administration is taking the first step toward a review of tariffs on more than $300bn in Chinese imports that’s required to keep them from starting to automatically expire in Jul.
• According to WSJ, Biden officials are divided over easing China tariffs to slow inflation. Treasury Secretary Janet Yellen favors move, while Trade Representative Katherine Tai is concerned about ceding leverage.
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