Flip Flop!
Early in the trading week, major indices moved upwards, with the S&P rallying to about 2.82% higher while the Nasdaq rallied about 2.69% higher. However, all of this turned for the worse when Federal Chairman Jerome Powell came out with remarks at the International Monetary Fund (IMF) debate.
The Federal Reserve, Chairman Powell specifically, has detailed their plans to hike rates, previously referencing this current rate hike cycle to that of the '04 - '06 rate hike cycle, where rates were raised 17 times in a row.
At the debate, he seemed to have reversed on that, stating that 50 basis points hikes are on the table and hinted at the possibility of more 50 basis points hikes in the future, turning the market significantly lower for the rest of the week.
Crash and burn!
Many companies released earnings this week, Netflix amongst them. In the next trading day, the stock plummeted well over 35%, ending the week lower by 38%.
This was the first earnings report in which Netflix reported that detailed a total loss in subscribers. The expected for Q1 2022 was well above 2 million additional new subscribers, but the reported number was a loss of 200,000 subscribers.
This is happening amidst new competition from established businesses in the entertainment space, such as Disney and YouTube, as they challenge to take up more market share.
Elon goes again
After the Twitter board elected to take up a poison pill defence strategy to prevent Musk from obtaining more than 15% of the company's shares, it seems that Musk is looking to give another go at attempting to buy over the company.
This time, Musk is looking to submit a tender offer to the shareholders, and have already received significant funding to help secure the deal.
According to an updated filing of his takeover attempt, Musk has received $46.5B to help finance the deal, with $25.5B in debt financing and $21B in which he has stated to have committed in equity financing.
According to Musk, he only did this due to the lack of response from the board.
Earnings review
Another week of intensive earnings reports has come to a close, with many big companies such as Bank of America, Tesla, and Johnson & Johnson reporting earnings.
According to Refinitiv, out of the 99 companies from the S&P500 that have reported Q1 2022 earnings, 77.8% have beaten estimates, with the long-term average being 60%.
Companies such as Tesla beat earnings heavily, with record margins in Q1 and huge beats in EPS. This is amidst time where recession risks are highly elevated and supply chain issues are increasing costs of materials.
Yangzijiang spin-off of investment segment
Yangzijiang's proposed spin-off of its investment segment has been approved by shareholders with an approval rate of 100%.
Yangzijiang Financial Holding (YZJFH) will therefore proceed to list on the Singapore Exchange under the ticker symbol “YF8” on Apr 28.
On the same day, YZJFH will be added to the Straits Times Index (STI) with the same investable weight as Yangzijiang Shipbuilding.
Yangzijiang shareholders will receive 1 share for every Yangzijiang share they hold upon the successful listing.
Upcoming events
Monday, 25 April
Singapore - CPI (March)
Tuesday, 26 April
Singapore - Industrial Production (March)
United States - Durable Goods Orders (March)
United States - New Home Sales (March)
United States - CB Consumer Confidence (April)
Wednesday, 27 April
China - Chinese Industrial Profit (February)
United States - Pending Home Sales (March)
United States - Crude Oil Inventories
Thursday, 28 April
Singapore - Unemployment Rate
United States - GDP (Q1)
United States - Initial Jobless Claims
Friday, 29 April
China - Caixin Manufacturing PMI (April)
Singapore - Bank Lending
Euro Zone - GDP
Euro Zone - CPI
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