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Welcome to Read Sunday☕️

Welcome to Read Sunday☕️

Written by William Lemanske

William Lemanske
April 21, 2024 • Estimated Reading Time: 14 minutes

Welcome to Read Sunday, your essential source for a concise and impactful weekly Business & Finance recap. Dive into the pivotal market highlights from the week, distilled for your convenience, and stay tuned for the thought-provoking editor's piece that rounds off your Sunday with insightful perspectives.

Market Recap

This Week’s Headlines

Economy & World News

In March, U.S. consumers increased their spending more than expected despite rising inflation, with retail sales rising 0.7%, surpassing forecasts. This growth in spending outpaced the 0.4% increase in the consumer price index, with annual retail sales growth at 4%, ahead of the 3.5% inflation rate. (CNBC)
China's economy grew by 5.3% in the first quarter, exceeding the forecasted 4.6% and showing an improvement from last quarter's 5.2%. (REU)
Iran launched its first direct attack on Israel from its territory using hundreds of drones and missiles, causing minimal damage due to effective air defenses that intercepted 99% of the projectiles. Following the attack, Israel's war cabinet convened, and the U.S. urged caution to prevent further escalation of the conflict. (WSJ)
Singapore's Deputy Prime Minister Lawrence Wong is scheduled to become the country's fourth prime minister since its independence in 1965, succeeding Prime Minister Lee Hsien Loong. Wong will be sworn in on May 15th. (CNBC)
Federal Reserve Chairman Powell's recent remarks acknowledging that inflation remains uncontrolled led to a significant drop in bond prices. The yield on 2-year Treasury notes increased to 5%, and there is speculation that 10-year notes might reach the same level soon. This situation has caused traders to reassess their expectations for when and how much the Fed might cut interest rates. Additionally, some Fed policymakers have expressed willingness to raise rates further if inflation deviates further from the central bank's target. (BBN)
In March, the U.K.'s inflation rate decreased to 3.2%, according to the Office for National Statistics. This rate was slightly above the 3.1% predicted by economists in a Reuters poll. The core inflation rate, which excludes energy, food, alcohol, and tobacco, was 4.2%, also slightly higher than the expected 4.1%. (CNBC)
President Joe Biden announced plans to significantly increase U.S. tariffs on Chinese metal products, elevating them to 25% for certain steel and aluminum items. This move, aimed at gaining favor with steelworkers in the pivotal state of Pennsylvania, could potentially strain relations with Beijing. Biden's proposal came as he campaigned for reelection in Pittsburgh, known as the "Steel City." (REU)
The Biden administration announced that it will not renew a license that had previously eased sanctions on Venezuelan oil, citing President Nicolas Maduro's failure to fulfill his election commitments. The U.S. Treasury Department, just hours before the license was set to expire, issued a new license allowing companies 45 days to wind down their operations and transactions in Venezuela's oil and gas sector. This move marks a return to more punitive measures against Venezuela. (REU)
The United States vetoed a U.N. Security Council resolution supporting the Palestinian bid for full U.N. membership, blocking the motion despite 12 votes in favor. Britain and Switzerland abstained. Following the vote, Palestinian envoy Riyad Mansour delivered a passionate speech asserting Palestinian rights to self-determination. (NYT)
Workers at Volkswagen's Tennessee plant have voted to join the United Auto Workers (UAW), marking the union's first successful organization of a foreign automaker in the U.S. This milestone is expected to energize the UAW's broader campaign to unionize 13 automakers nationwide, following previous unsuccessful attempts at this plant in 2014 and 2019. (CNBC)
The House approved $95 billion in foreign aid for Ukraine, Israel, and Taiwan in a bipartisan vote, with Speaker Mike Johnson taking a significant political risk to push the aid package forward. The funding includes $60 billion for Ukraine, $26 billion for Israel and humanitarian aid for conflict zones like Gaza, and $8 billion for the Indo-Pacific region. The legislation also includes a provision allowing the president to seek repayment of $10 billion in economic assistance from Ukraine, a concept supported by former President Donald J. Trump. (NYT)

Public Markets

Apple Inc.'s iPhone shipments declined nearly 10% in the March quarter, the largest drop since 2022, with only 50.1 million units shipped compared to the expected 51.7 million. This decline was primarily due to weak sales in China, despite an overall recovery in the smartphone market. (BBN)
CVC Capital Partners, a global buyout firm, announced plans to list its shares in Amsterdam, marking its second attempt at going public within six months. The firm aims to raise at least 1.25 billion euros (approximately $1.33 billion) through the sale of new shares and some existing shareholder stock, with the listing anticipated in the coming weeks. (WSJ)
Microsoft plans to invest $1.5 billion in G42, an AI firm based in the United Arab Emirates, to bolster its technology standing. As part of the deal, Microsoft President Brad Smith will join G42's board of directors, and Microsoft will acquire a minority stake in the company. This investment, which deepens an existing partnership, is notable due to significant government involvement and comes amid U.S. scrutiny of G42 for its alleged connections to China. (CNBC)
Cocoa futures reached a new peak, surpassing $11,000 per metric ton. This increase comes despite a global supply shortage and record prices, as chocolate factories continue to maintain their processing pace. (ET)
Microsoft Corp.'s $13 billion investment in OpenAI Inc. is unlikely to face a formal investigation by European Union merger watchdogs, as the European Commission has determined the investment doesn't qualify as a takeover. According to sources familiar with the matter, the Commission concluded that Microsoft does not exert control over OpenAI's operations, easing concerns that the partnership might be disrupted. (BBN)
Oracle announced on Wednesday its plan to invest over $8 billion in the next decade to expand its cloud computing and AI infrastructure in Japan. This investment aims to enlarge the presence of Oracle Cloud Infrastructure (OCI) across the country. Additionally, Oracle intends to bolster its operations and support engineering teams with personnel based in Japan, according to the company's statement. (REU)
Micron Technology is poised to receive $6.1 billion in grants from the U.S. Commerce Department, as announced by Senate Majority Leader Chuck Schumer. This funding, which is still pending final approval, is intended to support Micron's chipmaking facility projects in New York and Idaho. The grants are part of the initiatives under the CHIPS & Science law, aimed at boosting domestic semiconductor production. (REU)
A cyberattack on Yanfeng, an automotive supplier, last year led to over $26 million in damages for Stellantis NV and halted production at three Detroit-area plants and one in Mexico. After Stellantis charged these damages to Yanfeng, the supplier ceased shipments, prompting a court order in January to resume them. (CRAIN)

Real Estate

General Motors plans to move its headquarters to a new high-rise called Hudson's in downtown Detroit by 2025, shifting from its current location at the Renaissance Center where it has been based for over 20 years. The new building will be Detroit's second-tallest skyscraper and will include collaborative spaces for employees, areas for hosting events, and vehicle displays. (REU)
The Michigan Strategic Fund has approved a significant brownfield plan involving over $231.7 million in tax revenue reimbursements over 35 years for a $3 billion development in Detroit’s New Center neighborhood. This development is a collaboration between Henry Ford Health, the Detroit Pistons, and Michigan State University. (CRAIN)
Red Lobster is reportedly considering filing for Chapter 11 bankruptcy as part of a debt restructuring plan, according to sources familiar with the matter. The seafood restaurant chain has been consulting with the law firm King & Spalding. This potential filing could allow Red Lobster to terminate long-term contracts and renegotiate numerous leases. (BBN)
Detroit rapper Big Sean will headline the NFL Draft concert series in Detroit, performing on the first day of the event from April 25-27. The lineup also includes local stars like rocker Bob Seger. Following Big Sean, the Detroit Youth Choir and dance/electronic artist Bazzi will perform on subsequent days. Official announcements are expected today. (CRAIN)
Mortgage rates in the U.S. have risen above 7% for the first time this year, reaching 7.1% this week for 30-year mortgages, according to Freddie Mac. This increase marks the highest rate since November and comes close to the nearly 8% peak observed late last year, the highest since 2000. This rise poses a significant challenge to the housing market, potentially deterring millions of potential buyers and sellers as the market shows signs of slowing. (NYT)

Mergers & Acquisitions

Shares of Volvo AB fell by up to 5.9% in Stockholm trading on Friday following news that China's Zhejiang Geely Holding Group sold all its Class B shares, valued at approximately 14.1 billion Swedish kronor ($1.3 billion). Despite this sale, Geely stated in a Thursday announcement that the divestment aligns with its long-term strategy and confirmed it will continue as Volvo’s second-largest investor, holding 88.5 million Class A shares. (BBN)
Apollo Global Management Inc. and Sony Group Corp. are contemplating a joint bid for Paramount Global, causing the company's shares to rise amid potential bidding war speculation with tech mogul David Ellison. Sony Pictures Entertainment's chief, Tony Vinciquerra, discussed the partnership with Apollo, but no official proposal has been made yet, according to an anonymous source. (BBN)
Claudia Sheinbaum, Mexico's leading presidential candidate, anticipates that Petroleos Mexicanos (Pemex) will refinance its bonds due in 2025, which amount to $6.8 billion. She expects the current Pemex CEO and president to devise a long-term plan to address the company's $106 billion debt burden, viewed as a major challenge for the next Mexican president. (BBN)
Hipgnosis Songs Fund, home to artists like Neil Young and Shakira, has agreed to a $1.40 billion takeover by Apollo-backed music company Concord Chorus. Shareholders of the London-listed fund will receive $1.16 in cash per share, a 32% premium to the closing price on Wednesday. Following the announcement, shares surged 31% to 92.60 pence, up 8.2% over the past 12 months. (WSJ)
Salesforce is in advanced discussions to acquire data-management software provider Informatica. Informatica, based in Redwood City, California, has seen its shares rise 43% this year, giving it a market capitalization of over $11 billion. However, the price being discussed for the acquisition is reportedly below Informatica's recent closing stock price of $38.48, which has been inflated by the anticipation of a deal. (WSJ)
Members of the Nordstrom family are exploring taking Nordstrom private amid challenges in the department store industry. CEO Erik Nordstrom and President Pete Nordstrom are interested in a deal, prompting the formation of a special committee of independent directors to evaluate their proposal and others. The committee is working with bankers from Morgan Stanley and Centerview Partners. (WSJ)