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Welcome to Read Sunday☕️

Welcome to Read Sunday☕️

Written by William Lemanske

William Lemanske
March 17, 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

U.S. inflation in February was slightly higher than expected, with consumer prices rising 3.2% from a year earlier, according to the Labor Department. Despite this, expectations for the Federal Reserve to begin cutting rates later this year remain unchanged. (WSJ)
China Vanke Co., a financially strained developer, is working to avoid its first default. While immediate concerns of a collapse seem to be easing, its long-term outlook remains uncertain. With 1.28 trillion yuan ($178 billion) in total liabilities, Vanke faces several bond maturities this year, including a $600 million note due in June. Despite this, short-term notes are currently trading near par, suggesting limited worries about an imminent crisis. (BBN)
Japan avoided a technical recession as the economy grew in the October-December 2023 period, driven by strong capital expenditure. The growth was weaker than expected, with private consumption remaining subdued. There's speculation that the Bank of Japan might raise interest rates at its March meeting, supported by signs of robust wage gains. Japan's GDP expanded by 0.4% year-on-year in Q4 2023, lower than the expected 1.1% growth and contrasting with the initial 0.4% contraction. (CNBC)
TikTok displayed a notification to some U.S. users, urging them to call their senators and request a no vote on a bill that would ban the app if it remains under Chinese tech company ByteDance. The notice encouraged users to emphasize TikTok's importance and provided a zip code locator for senators' phone numbers. (REU)
The EU parliament has approved the world's first major regulatory framework for AI in media, known as the EU AI Act. It categorizes AI based on risk levels and is set to come into effect in May pending final checks and endorsement from the European Council. (CNBC)
The International Energy Agency (IEA) expects a supply deficit in global oil markets throughout 2024, contrary to previous forecasts of a surplus. This projection is based on the assumption that OPEC+ will continue its output cuts in the second half of the year. Saudi Arabia and its partners recently agreed to extend production curbs of roughly 2 million barrels per day until the middle of the year. The IEA assumes these measures will continue until the end of 2024, reflecting the bloc's efforts to balance oil markets. (BBN)
The Labor Department reported on Thursday that its producer price index, which tracks wholesale inflation before reaching consumers, rose by 0.6% in February compared to the previous month. On an annual basis, prices were up 1.6%, marking the highest level since September 2023. These figures exceeded the 0.3% monthly gain and the 1.1% annual figure predicted by LSEG economists. (FOX)
The National Association of Realtors has agreed to settle litigation over commission rules for U.S. real estate agents, potentially leading to changes in how Americans buy and sell homes. The settlement could alter how agents communicate about commissions, possibly resulting in lower fees for homeowners and buyers. The NAR, which represents about 1.5 million members, would pay around $418 million over about four years under the agreement, pending court approval. The Realtor group maintains that it did not engage in wrongdoing regarding its model rule for broker compensation. (BBN)

Public Markets

Reddit Inc. and its investors are aiming to raise up to $748 million in one of the largest initial public offerings of the year. The plan involves selling 22 million shares for $31 to $34 each. This move could value the company at around $6.5 billion. (BBN)
Comcast Cable Communications LLC has sued call center operators, accusing them of posing as company support agents to deceive Xfinity broadband customers into paying for fake services. The lawsuit, filed in federal court, alleges that the operators persuaded victims to pay with prepaid gift cards, credit cards, or checks. (BLN)
The Pentagon has withdrawn from a plan to allocate up to $2.5 billion in chip grants to Intel Corp., according to sources familiar with the matter. This development shifts the responsibility to another federal agency, the Commerce Department, to cover the funding gap. Intel had been anticipating a substantial amount in federal funding, including incentives worth over $10 billion from the Chips and Science Act. (BBN)
Microsoft plans to release AI tools on April 1 to help cybersecurity workers summarize suspicious incidents and uncover hacker tactics. The tools, part of Copilot for Security, have been in trial with corporate clients and will be charged based on usage, similar to Azure cloud services. (BBN)
Dollar Tree Inc. plans to close approximately 1,000 stores to improve profitability amid various challenges, including litigation. The company aims to shut down about 600 Family Dollar stores in the first half of fiscal 2024, with an additional 370 Family Dollar and 30 Dollar Tree locations closing as leases expire. Dollar Tree expects the store closures to benefit 2024 earnings by 15 cents per share. (BBN)
The US plans to award over $6 billion to Samsung Electronics Co. as part of the 2022 Chips and Science Act, aiding the chipmaker's expansion beyond its existing project in Texas. The award is one of several significant grants expected from the Commerce Department in the coming weeks, including a grant of over $5 billion to Samsung's rival, Taiwan Semiconductor Manufacturing Co. The federal funding for Samsung, South Korea's leading chipmaker, would be accompanied by substantial additional investment in the US. (BBN)
Apple has agreed to a $490 million settlement to resolve a class-action lawsuit accusing CEO Tim Cook of defrauding shareholders by concealing declining iPhone demand in China. The preliminary settlement was filed with the U.S. District Court in Oakland, California, and is subject to approval by Judge Yvonne Gonzalez Rogers. The lawsuit originated from Apple's announcement on January 2, 2019, that it would reduce its quarterly revenue forecast by up to $9 billion, citing U.S.-China trade tensions. (CNBC)

Real Estate

Hungary and the United Arab Emirates signed a 5 billion euro ($5.5 billion) deal to revitalize a run-down neighborhood in Budapest with a touch of Dubai glitz. Eagle Hills Properties LLC will collaborate with the Hungarian government to develop a partly disused railway station. The project, signed by Hungarian Foreign Minister Peter Szijjarto and UAE Minister of State for Foreign Trade Thani Al Zeyoudi, has faced criticism even before being formalized. (BBN)
The Ilitch-owned Detroit Tigers have invested close to $30 million in renovations at Comerica Park before Opening Day, with additional plans to spend millions more on upgrades in the next offseason. The renovations include a new videoboard, TVs throughout the concourse, and audio enhancements, with significant changes also made behind the scenes to improve the team's competitiveness. Fans can expect these upgrades when the Tigers return to town on April 5. (CRAIN)
Jon and Lauren Cotton, a couple from Grosse Pointe, have expanded their boutique lodging portfolio with the purchase of the Harbour View Inn on Mackinac Island in Northern Michigan. The inn was acquired from Karen Pulte of Naples, Florida, and her daughter and son-in-law, Katie Pulte Moskalik and Timothy Moskalik of Mullett Township. The transaction was announced on Wednesday. (CRAIN)
Hilton Worldwide Holdings is acquiring Graduate Hotels, a company that specializes in college towns, for $210 million. This move is part of Hilton's strategy to capitalize on the potential growth in these areas. Graduate Hotels, founded ten years ago, operates numerous hotels in major college towns in the United States and the U.K. Hilton's CEO, Chris Nassetta, sees an opportunity in college towns where existing hotels are either older and high-end but close to campus or more standard limited-service hotels farther from the action. (WSJ)

Mergers & Acquisitions

Former Treasury Secretary Steven Mnuchin has announced plans to assemble an investor group to attempt to acquire TikTok. He expressed support for legislation that would require ByteDance to divest TikTok, stating, "I think the legislation should pass and I think it should be sold." Mnuchin's comments followed the House of Representatives passing a bill that would mandate ByteDance to divest TikTok, or the social media platform would be banned in the U.S. (CNBC)
Nippon Steel defended its planned acquisition of U.S. Steel as a move to bolster American supply chains and economic defenses against China. This comes after President Joe Biden expressed opposition to the $14 billion deal, citing concerns about its impact on union workers, supply chains, and U.S. national security. Nippon Steel remains determined to complete the takeover, which was agreed upon in December. (CNBC)
Kimmeridge Energy Management has made a new offer to acquire SilverBow Resources, valuing the U.S. oil and gas producer at nearly $2.1 billion, including debt. This offer includes combining SilverBow with Kimmeridge's gas-producing assets in South Texas, valued at approximately $1.4 billion, including debt. This offer comes after previous unsuccessful bids by Kimmeridge for SilverBow over the last two years. (REU)
Apple Inc. has acquired Canadian artificial intelligence startup DarwinAI, as part of its efforts to strengthen its capabilities in generative AI. The acquisition, which took place earlier this year, includes the transfer of dozens of DarwinAI employees to Apple's artificial intelligence division. (BBN)

**Due to the large amount of news surrounding airline manufacturer Boeing, this week will feature a section dedicated to “Boeing News”.**

Boeing News

Federal prosecutors are investigating the midair blowout of a door plug on a Boeing Co. plane operated by Alaska Airlines on Jan. 5. The investigation, based in Seattle, involves subpoenas and a grand jury. The US Attorney for the Western District of Washington is seeking documents and communications related to Boeing, Spirit AeroSystems Holdings, and the "door plug" used in the Boeing 737 Max 9 aircraft. (BBN)
Southwest Airlines announced that it will reassess its 2024 financial forecast due to Boeing's delivery delays this year. Airline CEOs, including Southwest's, have expressed frustration over Boeing's repeated setbacks, which have affected the delivery of new planes. Boeing is currently dealing with a quality control crisis following a blown fuselage panel on an Alaska Airlines flight earlier this year. (CNBC)
Qatar Airways is reportedly in preliminary discussions with Boeing and Airbus to order between 100 to 150 widebody jets. This move is part of the airline's plan to expand and update its fleet. Major airlines are competing to acquire new fuel-efficient widebody jets to reduce operating costs and meet the growing demand for international travel. The order is expected to involve either the Airbus A350 or Boeing 777X models. (REU)
United Airlines is close to securing a deal for around three dozen Airbus A321neo jets from lessors to replace delayed Boeing 737 Max 10 orders. The A321neos are scheduled for delivery between 2025 and 2027. The move comes as Boeing's delays have affected United's growth plans, and converting some orders to Airbus would give the European manufacturer an opportunity to undercut Boeing. (BBN)
A Boeing 787 flying to New Zealand experienced a sudden plunge, injuring 50 passengers, possibly due to a mishap with a cockpit seat. A flight attendant accidentally hit a seat switch, pushing the pilot forward and causing the plane's nose to drop. Boeing is cooperating with the investigation and may issue a memo about the seat switch to airlines. (BBN)
A United Airlines flight from San Francisco to Oregon landed with a missing external panel on Friday. The Boeing 737-800's missing panel was discovered after landing, but there were no indications of damage or emergencies during the flight. (NYT)