Wall Street, which has been declining for six weeks, has evolved with little trend within minutes of opening. Despite the massive rebounds on Friday, Nasdaq has abandoned 26.5% compared to the November 2021 record of 16,057 points. Even if the “fear index” Vix falls below 30 on Monday, anxiety is still apparent in the trading room. However, it is well above the 200-day moving average (21). Investors continue to fear the impact of central bank tightening to counter inflation in the global economy. Concerns were reinforced by the release of the Empire State Manufacturing Index from the Federal Reserve Bank of New York, which fell into the negative territory in May, as well as China’s data released earlier this morning.
As a result, retail sales in China fell 11.1% year-on-year, almost double expectations, and industrial production fell 2.9%, the sharpest decline since February 2020. The risk of a sharp economic slowdown amid rising price pressures and rising borrowing costs remains a major concern. Goldman Sachs boss Lloyd Blankfein also urged businesses and consumers to prepare for the US recession, calling it a “very, very high risk.” Bank economists have lowered their growth forecasts in the United States. They now expect the economy to grow 2.4% this year and 1.6% in 2023 from the previous 2.6% and 2.2%.
In business news, Twitter’s soap opera continues to be in the spotlight as Wal-Mart and The Home Depot release quarterly accounts tomorrow. The day when retail sales in April and industrial production in the same month will be announced.
In the bond market, interest rates rose again on Friday after several declines in interest rates. They will relax a little again this Monday. Therefore, the yield on 10-year bonds fell 2.2 basis points to 2.897% and the yield on 2-year bonds was 2.564% (-1.2 bp). Last Monday, “10 years” before the revision exceeded 3.10% and “2 years” exceeded 2.7%, the highest since November 2018.
Gold definitely seemed to lose its appeal, dropping another 0.3% to $ 1,806 on the June Comex futures contract. Yellow metal fell by almost 4% last week to its lowest level in three and a half months.
In the currency market, the dollar index is still the highest in 20 years, trading at 104.5 points (-0.2%) against a basket of benchmark currencies. The euro rose 0.16% against the greenback to $ 1.0428 in the New York interbank market.
Bitcoin, which plunged to $ 26,000 on Thursday morning, is trading at around $ 30,189, almost stable over a 24-hour period, although it is far from the November 2021 record of $ 69,000.
Finally, oil prices fell somewhat at the beginning of the week. Barrels of US WTI light crude (June futures contract) fell 0.6% to $ 109.8 at Nymex and Brent in the North Sea fell 0.8% to $ 110.7. Crude oil prices are torn between two opposing forces. On the one hand, there is a threat of slowing demand, especially due to the weakening of the economy in China, and on the other hand, the fear of a decline in the alliance’s supply of Russia’s oil embargo to Europe. , Currently under discussion in the EU. This embargo project, which requires the unanimous adoption of 27 member states, is still thwarted by Hungary, which relies heavily on Russia’s oil and gas.
* JetBlue Airlines has not given up. While Spirit Airlines has previously supported the Frontier Group’s lower bids, JetBlue is now planning to launch hostile bids against low-cost competitors. JetBlue is launching this hostile takeover in hopes of putting pressure on Spirit’s management to resume negotiations, according to people familiar with the issues cited in The Wall Street Journal. Will appeal directly to Spirit’s shareholders. At the same time, JetBlue urges Spirit shareholders to vote against the upcoming merger with Frontier Group on June 10 and make further efforts to influence company executives. As part of the attack, JetBlue will offer $ 30 in cash per share, but Spirit comes to the negotiating table and JetBlue. The tender offer will begin on Monday, May 16th and is expected to remain open until June 30th, but JetBlue may extend this period, sources have told the WSJ. JetBlue is said to have already started meetings with some Spirit shareholders.
Spirit is the subject of a conflict between two rival airlines that see Florida-based airlines as the key to their ability to grow and challenge celebrities in the American industry. In February, Spirit agreed to be acquired by Denver-based low-cost carrier Frontier for a $ 2.9 billion cash and equity transaction. However, JetBlue retaliated in April by announcing an unsolicited offer of $ 3.6 billion in cash, claiming that the merger with Spirit would create even stronger competitors. However, Spirit rejected the offer because the carrier’s board of directors determined that the risk of antitrust authorities banning such transactions was too great. Nonetheless, JetBlue promises to sell a large number of assets, especially all of the New York and Boston spirits, in order to convince the spirit’s management, if the transaction fails due to antitrust reasons. Provided $ 200 million in contract breach compensation. Insufficient attempt so far. Whatever the winning combination, it will result in the creation of three incumbents and a fifth American aircraft carrier behind the Southwest.
* Twitter fell 9.6% on Wall Street to $ 40.72 on Friday. That’s because Elon Musk, the wealthiest person on the planet, has promised to buy a social media network for $ 54.2 per share, for a total of $ 44 billion. “Twitter agreements will be temporarily suspended until details support the calculation that spam / fake accounts actually make up less than 5% of users,” tweeted businessman, Tesla, and SpaceX bosses. did. “Estimate, May 2nd article. This article from the press estimates that fake accounts and spam account for less than 5% of total monetizable daily active users in the first quarter. During the period, 229 million users were advertising on social networks. Mask, which proposed to acquire the platform for $ 44 billion in April, is one of the priorities of the network. I presumed that it was to remove the “spambot” from.
Separately, Elon Musk’s legal team on Saturday revealed that social networks are using a sample of 100 followers to determine the number of fake accounts on the platform. Announced that he has accused him of violating a nondisclosure agreement.
* McDonald’s. Quite a symbol. Among the first Western signs established in Moscow in 1990, McDonald’s will undoubtedly leave the country following Russia’s invasion of Ukraine. Since March, the fast food giant has begun steps leading to a complete withdrawal from a country where all restaurants have been closed. Ownership of Russian business can no longer be maintained. “
According to McDonald’s, fast food giant Russia’s business will be sold to local investors. This withdrawal from Russia should result in an exceptional cost of $ 1.2 billion to $ 1.4 billion to the Group’s account. Nevertheless, management has confirmed the 2022 target. The American company has 62,000 employees in Russia, and this market accounts for 9% of sales and 3% of operating profit.
* Tesla will delay plans to return production at its Shanghai plant to pre-COVID-19 blockade levels by at least a week, according to internal documents confirmed by Reuters.
* Ford sold 7 million shares of electric vehicle maker Rivian Automotive for about $ 188.2 million, or $ 26.88 per share, according to a stock filing released Friday. This follows the sale of 8 million shares last week, with both transactions leaving Ford with a 9.7% stake.
* Carlyle plans to acquire defense group Mantech International in full cash and value the latter at approximately $ 4.2 billion. Reuters reported in February that ManTech co-founder George Pederson was exploring options for his majority stake, including the sale of the company. Based on the terms of the transaction, ManTech shareholders will receive $ 96 per share. This represents a premium that is 32% above the closing price on February 2nd, the last trading day before the first article that evokes the possibility of a sale was published.
“As a result of a comprehensive review of strategic alternatives, our board of directors has stated that this transaction is in the best interests of shareholders, providing shareholders with the most convincing and potential maximum value and a significant amount of cash. We have decided to offer it as a premium, “says Kevin M. Phillips. , ManTech boss. The transaction has been unanimously approved by ManTech’s board of directors and shareholders are encouraged to vote in favor of the proposal. The transaction is expected to close in the second half of 2022, subject to regular regulatory approval.
* Pfizer and BioNTech have agreed to postpone the shipment of the COVID-19 vaccine to the European Union, which is preparing for a potential recall campaign in the fall, by three months. Delays that do not question the purpose of delivery and annual profits of both companies.