Source: China Fund News
Tensions continue in Eastern Ukraine
U.S. tech stocks tumbled
The situation in Russia and Ukraine continues to evolve. The Russian Defense Ministry said the guided-missile cruiser Moscow sank. Putin also announced new moves in the energy sector.
Fed officials are once again letting go. Expectations of aggressive Action by the Federal Reserve to suppress inflation have risen again, coupled with higher-than-expected economic data on U.S. import prices, sparked investor concerns, U.S. Treasury yields soared again, and the three major U.S. indexes closed down again this week.
Technology stocks fell under pressure again. Among the leading technology stocks, Apple and Microsoft fell by nearly $140 billion (about 890 billion yuan).
Twitter is considering "Poison Pill" to prevent Musk from significantly increasing his stake in the company after he offered to buy Twitter in cash for about $43 billion in deals.
Summary of information on the situation in Russia and Ukraine
Russian Ministry of Defense: The guided-missile cruiser Moscow sank
On the 14th local time, the Russian Defense Ministry said that the Russian Black Sea Fleet "Moscow" guided missile cruiser lost its stability and sank in the wind and waves in the process of being towed to the destination port. The Russian Defense Ministry previously confirmed that the moscow guided-missile cruiser caught fire and caused the ship's ammunition to explode, causing serious damage to the hull.
The Ukrainian side said that the "Moscow" was seriously damaged by the Ukrainian side with the "Neptune" cruise missile.
Russia claims that border checkpoints and houses in the Bryansk region were shelled by the Ukrainian side
CCTV News reported that the Russian Federal Security Service said on the 14th that the novoroyurkivic border checkpoint in The Bryansk region in southwest Russia was shelled by mortar shelling from the Ukrainian side, and the shelling caused damage to two refugee vehicles and injured several people. At present, the border checkpoint has resumed normal operation. The Ukrainian side has not responded to the matter at this time.
In addition, the governor of bryansk region said on the same day that the Ukrainian army also shelled houses in the border area of the region of Klimovsky, which caused casualties, and the shelling also caused two houses to catch fire, which has now been extinguished. Schools in the area have also been suspended as a result.
The Russian Reconnaissance Commission said on the 14th that the Ukrainian army used two helicopters equipped with heavy offensive weapons to illegally enter Russian airspace and carried out at least 6 strikes on houses in the Klimovsky District.
The Klimovsky district of The Bryansk Oblast of Russia has entered a state of emergency
On the 14th local time, the Klimovsky District of the Bryansk Oblast of Russia has entered a state of emergency. On the same day, the area was attacked by Ukrainian helicopter gunships, injuring 8 people and damaging more than 100 houses.
The Russian region of Belgorod was attacked from the direction of Ukraine
The governor of Russia's Belgorod region said on the 14th that a village in the border area of the state was attacked from the direction of Ukraine, but no civilian casualties were caused, and no buildings and public facilities were damaged. At present, residents of two villages near the Ukrainian border have been evacuated.
Belgorod Oblast is located in the south of Russia, bordering Ukraine.
Zelenskiy and Macron had a telephone conversation between the two sides to discuss the Russian-Ukrainian negotiation process and other issues
On the 14th local time, Ukrainian President Zelenskiy said on social media platforms that he had a phone call with French President Macron, and the two sides discussed the Russian-Ukrainian negotiation process and other issues.
Macron had earlier said he planned to speak on the phone with Zelenskiy and Putin in the near future.
U.S. President Joe Biden said he was considering sending senior officials to visit Ukraine
On the 14th local time, US President Biden said that he was studying with his team to decide whether to send a senior government official to visit Ukraine.
According to people familiar with the matter, the U.S. government has held preliminary discussions about the possibility of sending a senior official to Ukraine, including Defense Secretary Austin and Secretary of State Blinken. However, neither Biden nor Vice President Harris have any plans to visit Ukraine anytime soon.
Russian President Vladimir Putin has called for the conversion of certification systems in the natural gas and petrochemical industries to domestic systems by the end of the year
On Thursday (April 14), local time, Russian President Vladimir Putin ordered that the standardization and certification system in the natural gas and petrochemical industries be shifted from foreign to domestic by the end of this year.
Putin also issued a televised statement saying that Russia expects Europe to reduce Russian energy imports in the future and will begin to shift supply to other routes and shift energy exports to the east and southeast. He also stressed that there is currently no alternative to Russian gas in Europe.
Putin pointed out that "Russia plans to increase the share of local currency payments, and efforts need to be made to improve the local foreign exchange market." One of the most serious problems that sanctions pose for Russia's energy sector is in terms of export logistics. ”
Since the conflict between Russia and Ukraine, the United States, Britain, Canada and Australia have successively announced the ban on importing Russian crude oil. A number of multinational companies, including Shell and Total Energy, have also said that they have stopped buying Russian crude oil products or will stop buying Russian crude oil products by the end of 2022.
As sanctions increase, Russian benchmark oil Ural crude is increasingly discounted in global commodity markets. Putin said: "On the issue of energy exports, Russia mainly wants to increase the proportion of local currency settlement, and Russia's foreign exchange market needs to be ready to turn to ruble export settlement." ”
Musk's acquisition plan to be yellow?
Twitter is considering "Poison Pill Defense" to block hostile takeovers
According to the Financial Associated Press, on April 14, Eastern Time, according to the disclosure documents of the U.S. Securities and Exchange Commission (SEC), Tesla CEO Elon Musk intends to acquire the social media platform Twitter for $54.20 per share in cash, and the transaction amount will reach $43 billion. Boosted by the news, Twitter shares rose more than 15% at one point before the market, but the stock finally closed down more than 1.5%, highlighting that the market is not optimistic about the deal.
In addition, Saudi Prince Alwaleed bin Talal, Twitter's majority shareholder, rejected Musk's offer, arguing that given Twitter's growth prospects, the offer did not come close to Twitter's intrinsic value.
In addition, Twitter confirmed it had received an offer to takeover and said the board would review the offer. According to the Wall Street Journal, citing sources, Twitter is considering the so-called "Poison Pill" to prevent Musk from significantly increasing his stake in the company.
"Poison Pill Defense" is a legal mechanism, also known as "equity dilution anti-takeover measures" or "shareholders' equity plan", which is a defensive measure for target companies to resist hostile takeovers. Specifically, the board of directors of the target company passes an equity dilution clause in advance, and once the hostile party acquires a certain proportion of the company's shares (usually 10% to 20% of the shares), the clause is triggered to take effect, so that the company's original shareholders can obtain a large number of shares in the company at a lower price, thereby driving up the acquirer's costs.
Musk is the world's richest man, with his total assets of about $260 billion, according to the Bloomberg Billionaires Index. But because it's a cash acquisition, how Musk came up with $43 billion in cash remains to be revealed.
Neil Campling, head of TMT research at Mirabaud Equity Research, commented that this would constitute a hostile takeover offer and would cost a lot of cash, and Musk would have to sell a significant portion of Tesla stock to raise cash.
At TED late Thursday, Musk himself further elaborated on the acquisition of Twitter, admitting that he was not sure if he could successfully complete the acquisition, but if Twitter rejected his proposal, he had Plan B. However, Musk did not provide more details of the backup plan.
Musk revealed that if the acquisition succeeds, he will retain as many other shareholders as possible instead of becoming the sole owner of Twitter. According to documents released last week, Musk now holds a 9.1 percent stake in Twitter. Twitter had proposed that Musk join the board, but he rejected the offer.
Technology stocks under pressure led the broader market
Rising U.S. Treasury yields weighed on technology stocks as investors feared that soaring inflation and slowing economic growth were starting to affect businesses, with large tech stocks all falling.
The Tamama Technology Index fell 2.8 percent, Apple 3.00 percent, Microsoft 2.71 percent, and the value of a night market totaled nearly $140 billion (about 890 billion yuan); Amazon fell 2.47 percent, Meta 2.24 percent, Google 2.44 percent, and Netflix 2.65 percent.
Tesla recalled more than 600,000 vehicles in the United States
On April 14, Eastern Time, according to the website of the National Highway Traffic Safety Administration, Tesla recalled more than 600,000 vehicles in the United States. This includes a total of 594,700 Model S/X/Y units produced between 2020 and 2022 and Model 3 produced between 2017 and 2022. Recall information shows that the Boombox feature allows sounds to be played through external speakers while the vehicle is moving, potentially masking the sound of the Pedestrian Warning System (PWS), increasing the risk of crashes.
Meta may launch the first generation of AR glasses in 2024
No need to connect your phone
According to sources, Facebook parent company Meta is developing an AR (augmented reality) glasses project called Project Nazare to further bet on the metaverse field.
According to the schedule, Meta will release the first generation of AR glasses by 2024; the second generation of lighter and more advanced in 2026; and a more complete third generation product in 2028. People familiar with the matter said that Meta's AR glasses will work independently of mobile phones, meaning that there is no need to use the computing power of mobile phones. In addition to the Nazare project, Meta is also developing a lower-end AR smart glasses code-named "Supernova", which is also scheduled to be released in 2024.
Although billions of dollars have been spent on the development of AR glasses, Meta's internal sales expectations for the first version are not high, and it is expected to sell only tens of thousands of pairs, mainly for technology enthusiasts and developers.
Economic data superimposed on Fed officials to let go
Three major stock indexes closed down in unison Us Treasury yields soared
The market continues to pay attention to fed policy and economic data.
On Thursday (April 14), local time, The Fed's "third in command" and New York Fed President John Williams said that given the current ultra-low interest rate, a rate hike in 50 basis points is a "reasonable option" for the Fed. He added: "I think it's a reasonable option for us because the federal funds rate is very low. ”
In terms of economic data, the number of initial jobless claims in the United States for the week to April 9 was 185,000, which exceeded expectations; retail sales in the United States rose 0.5% month-on-month in March, less than expected; and the US import price index rose 12.5% year-on-year in March, exceeding expectations.
Previously, some analysts believed that the weakening of the core CPI indicates that an inflection point is coming. But the Producer Price Index (PPI) released on Wednesday and retail sales and import and export prices on Thursday show that the upward momentum of U.S. prices has not subsided in the slightest.
Investors are increasingly betting that each currency rate adjustment window from the May meeting of the Fed will be in units of 50 basis points instead of the traditional 25 basis points.
Corporate profits have been growing sharply over the past year thanks to the government's fiscal stimulus and strong consumer spending. Traders and investors fear that rising inflation will end this trend. Affected by aggressive interest rate hikes and high inflation, the three major US stock indexes all closed down.
David Donabedian, chief investment officer at CIBC Private Wealth, said: "Investors are trying to figure out if the Fed is on the right path and whether they can lower inflation without dragging down the economy. ”
By the close, the Dow was down 0.33 percent at 34,451.23; the Nasdaq was down 2.14 percent at 13,351.08; and the S&P 500 was down 1.21 percent at 4,392.59.
In terms of constituent stocks, SAIFUSHI fell more than 3%, leading the Dow.
U.S. Treasury yields, which had dived intraday in the previous session, pulled up intraday, with benchmark 10-year Treasury yields rushing to 2.70% and 2.80%, respectively, before rising below 2.83% intraday to a three-year high after Tuesday. As of closing, the benchmark 10-year Treasury yield was 2.828%.
Adam Sarhan, founder and CEO of 50 Park Investments, said that at this stage, changes in yields directly affect the stock market, and this is just one of many negative figures that investors have to deal with.
Most of the popular Chinese stocks closed down New energy vehicles fell
Popular Chinese stocks generally declined, Alibaba fell 4.54%, JD.com fell 2.95%, Weibo fell 2.69%, Pinduoduo fell 8.84%, Bilibili fell 4.95%, Baidu fell 3.79%, New Oriental fell 1.77%, NetEase fell 0.66%, Tencent Music fell 2.19%, iQiyi fell 4.63%, Didi fell 3.15%.
Chinese new energy vehicle stocks collectively fell, WITH NIO down 3.77%, Xiaopeng Auto down 2.64%, Ideal Auto down 1.23%, and Faraday Future down 2.60%.
Bank earnings reports hit
Goldman Sachs Q1 profit fell more than 40% but exceeded expectations
Before the market on Thursday (April 14), Goldman Sachs announced its first quarter 2022 results. Despite a sharp 42% drop in Q1 profits, it exceeded Wall Street expectations.
Goldman Sachs Q1 revenue was $12.93 billion, down 27 percent year-over-year, but better than the market's expectation of $11.83 billion. Goldman Sachs Q1 profit fell 42 percent from the year-ago quarter to $3.94 billion, or $10.76 per share, or more than market expectations of $8.89, due to a sharp decline in investment banking.
(Source: Goldman Sachs Earnings Report)
In terms of specific business, the Q1 revenue of the investment banking business was US$2.41 billion, down 36% year-on-year, due to the significant reduction in stock listing and bond underwriting expenses in the context of the Russian-Ukrainian conflict.
David Solomon, CEO of Goldman Sachs, said: "The rapidly changing market environment has had a significant impact on client activity, with equity offerings almost stagnant with the rise of risk brokering. Despite the harsh environment, our first quarter results show that we continue to support our customers effectively. ”
Although the six major U.S. banks have all been hit by the Russian-Ukrainian conflict, JPMorgan Chase, Morgan Stanley and Citi have all exceeded expectations, and Goldman Sachs has performed better than them.
Goldman Sachs' Q1 Global Markets Segment revenue was $7.87 billion, even 4 percent higher than the same period last year, when the Fed's accommodative monetary policy drove a significant increase in trading activity, thanks to strong activity in foreign exchange and commodities markets. According to Goldman Sachs, fixed income revenue rose 21 percent to $4.72 billion, driving the global markets segment's strong performance in the quarter.
Revenue from Goldman Sachs' Q1 consumer and wealth management business increased 21 percent to $2.1 billion, driven primarily by higher overhead and credit card balances.
Goldman Sachs' Q1 transaction advisory business revenue of $1.13 billion is nearly the same as last year, in stark contrast to rival Morgan Stanley, which doubled its transaction advisory business revenue.
In addition to Goldman Sachs, other Wall Street banks also announced their first-quarter results. Morgan Stanley's first-quarter net profit of $3.666 billion and revenue of $14.801 billion exceeded expectations. Citigroup's first-quarter net profit of $4.3 billion and revenue of $19.19 billion exceeded expectations. Wells Fargo's first-quarter net profit of $3.7 billion exceeded expectations; revenue of $17.59 billion fell short of expectations.
As of the close, U.S. bank stocks were mixed, with JPMorgan Chase down 0.96%, Goldman Sachs down 0.07%, Citi up 1.62%, Morgan Stanley up 0.75%, Bank of America down 3.32 percent and Wells Fargo down 4.55 percent.