Inflation soars again
This week, CPI and PPI inflation data for the month of March was released. CPI soared 1.2% MoM, with a 8.5% YoY increase. PPI soared 1.4% MoM and a 11.2% YoY increase.
This stubborn inflation has left the market in a bit of a frenzy, not knowing how the Federal Reserve will react to pull back this inflation, and if it will cause a recession.
The Federal Reserve is also stuck between a rock and a hard place. Most of the inflation in this data release seems to have came from the conflict in Europe, which can make the Fed's rate decision to be a very important one. Clamping down too hard on 'transitory' inflation can put a severe cap on growth, causing an unnecessary recession.
Poison?!
A new week, and the Twitter saga continues. Elon musk was offered a position on Twitter's Board of Directors, and was actually confirmed by the CEO of Twitter, Parag Agrawal, on 5th April, which Elon later declined, on 11th April.
Then, on 14th April, Elon submitted an offer to purchase twitter for $43 Billion, which is about $54.20 per share, a healthy premium above the current price of $45.08 but well below the highs of $80.75.
Upon hearing this news, Twitter opted for a poison pill defence, which is one of the more popular takeover defence strategies, preventing Elon from aggressively owning more shares by diluting him if he ever owns more than 15% of the company.
Charlie gives up on BABA?
Charlie Munger, the Chairman of Daily Journal Corp has sold off over 50% of their Alibaba stake in the first quarter of 2022, amounting to a total of 302,060 shares.
Munger has been one of the more prominent bulls of Alibaba and its company, publicly defending it for over a year. in fact, they actually doubled their position on Alibaba in January, of which the stock is now down over 25% since then.
Alibaba has performed poorly for more than a year now, and is down over 70% from its highs in October 2020, and is currently trading near its IPO price in 2015.
Earnings is here!
Earnings season has come around, with prominent companies such as JP Morgan, Delta Air Lines, Goldman Sachs, and Morgan Stanley, being the few who have already released their earnings for Q1 of 2022.
This earnings season comes amid pressures from the conflict in Europe, rising interest rates, as well as the halting of quantitative easing that has given a very cheap access to money in recent times. Investors are worried that all these factors combined may cause poor results in many companies, and may cause poor guidance in companies' expectations moving forward.
China shocks the market
On Friday, China's central bank kept a key interest rate unchanged at 2.85%, surprising the market as investors were expecting more stimulus as the country grapples with their latest COVID surge.
China is still taking on a zero COVID policy, which many countries have simply accepted that it was impossible to achieve. Lockdowns in cities such as Shanghai were put in place to try to achieve that goal, which put a significant halt to economic activity in the international hub.
Without this added stimulus many were hoping for, economists are now expecting that China may not hit its GDP growth expectation of 5.5% this year.
Upcoming events
Monday, 18 April
Singapore - Non-Oil Exports (March)
Singapore - Trade Balance
China - GDP (Q1)
China - Industrial Production (March)
Tuesday, 19 April
United States - Building Permits (March)
United States - Housing Starts (March)
Wednesday, 20 April
United States - API Weekly Crude Oil Stock
United States - Crude Oil Inventories
United States - Existing Home Sales (March)
China - PBoC Loan Prime Rate
Euro Zone - Trade Balance (February)
Thursday, 21 April
Euro Zone - CPI (March)
United States - Initial Jobless Claims
Friday, 22 April
United Kingdom - Retail Sales (March)
United Kingdom - Manufacturing PMI / Services PMI / Composite PMI
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