Wall Street Today | Elon Musk Plans to Rely More Heavily on Equity to Finance Twitter Deal
MACRO
Fed's Inflation Fight Gets a Boost Amid the Wall Street Rout
Beneath the latest global market disruptions are clues that the Federal Reserve is making slow but sure progress in its bid to curb the excesses of this inflation-addled business cycle.
Ever-tightening financial conditions and the draining of stock-market froth suggest Wall Street is taking the Fed's hawkish stance seriously, a development that should eventually help cool the expansion. Meanwhile falling market-derived inflation expectations constitute a rare win for monetary officials on a mission to convince Americans that price pressures will ease soon enough.
Fed Minutes Show Agreement on More 50-basis Point Rate Hikes: What You Need to Know
Minutes released on Wednesday from the May 3-4 Fed meeting confirm what many investors already knew: there's a high likelihood that additional 50-basis point rate hikes are coming.
The minutes show that Fed officials plan to begin reducing the central bank's balance sheet in June, which stands at $9 trillion.
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SECTORS
Oil Musters First Gain This Week as US Inventories Slip
Oil edged forward after a US government report showed crude stocks fell, though the slower pace of declines and higher fuelmaking rates restrained upward momentum.
West Texas Intermediate futures gained 56 cents to regain $110 a barrel Wednesday. Crude inventories fell both nationally and at the storage hub in Cushing as exports soared and Gulf Coast refiners pushed runs to their highest level since January 2020. With refineries accelerating output, fuel inventories fell at a slower pace than previous weeks, signaling some relief for tight markets.
SEC Proposes More Disclosure Requirements for ESG Funds
Regulators proposed new disclosure and naming requirements for investment funds that tap into public angst regarding climate change or social justice, in an effort to address concerns about "greenwashing" by asset managers seeking higher fees.
Rising Rates Are Battering Mortgage Lenders
Mortgage lenders are scrambling to survive a sharp drop-off in the number of homeowners refinancing their loans, with demand drying up as interest rates rise.
Mortgage giants including $Wells Fargo & Co(WFC.US$ and $Rocket(RKT.US$ have trimmed staff this spring. Online lender Better.com has laid off or offered buyouts to about half of its workforce since last December.
COMPANIES
Snowflake Shares Slide Despite Earnings Beat, Falling Below 2020 IPO Price
$Snowflake(SNOW.US)$shares are trading sharply lower late Wednesday, on apparent investor disappointment with the financial outlook provided by the cloud-based data warehousing company.
With the late afternoon slide, Snowflake shares have fallen below their $120 September 2020 IPO price. The stock peaked above the $400 level last fall.
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Elon Musk Plans to Rely More Heavily on Equity to Finance Twitter Deal
Elon Musk is committing more of his wealth to finance his $44 billion deal for $Twitter(TWTR.US)$and seeking additional financial backers amid a sharp decline in $Tesla(TSLA.US$ stock in recent weeks.
Mr. Musk's funding plan now includes $33.5 billion in equity, up from $27.25 billion, according to a Wednesday regulatory filing. The billionaire Tesla chief executive no longer plans to rely on a margin loan backed by shares of his electric-vehicle company, which are down by about a third since Twitter accepted his bid in late April.
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Nvidia Earnings, Sales Increase in Fiscal Q1, but Guidance Lags Market Expectations
$NVIDIA(NVDA.US)$reported fiscal Q1 adjusted diluted earnings late Wednesday of $1.36, up from $0.91 a year earlier. Analysts polled by Capital IQ expected $1.29.
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Despite Focus on Amazon Worker Issues, No Shareholder Proposals Approved
$Amazon(AMZN.US)$, in the spotlight over working conditions and facing more than a dozen shareholder proposals, announced at its annual general meeting Wednesday that none of the resolutions passed.
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Walmart, CVS to Stop Filling Controlled-Substance Prescriptions for Cerebral, Done
$CVS Health(CVS.US$ and $Walmart(WMT.US$ will stop filling prescriptions for controlled substances ordered by clinicians working for Cerebral Inc. and Done Health, the broadest curbs yet by major pharmacies against the telehealth companies following scrutiny of their prescription practices.
A CVS spokesman confirmed the change, citing concerns with the two companies following a review it conducted. Cerebral had earlier disclosed the change to The Wall Street Journal. A Walmart spokeswoman said the retail giant is taking steps to no longer fill those prescriptions but didn't immediately respond to questions about why it made the decision.
Source: Bloomberg, WSJ
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RDK79 : Mortgage lenders are scrambling to survive a sharp drop-off in the number of homeowners refinancing their loans, with demand drying up as interest rates rise.
Much of this is bank self induced!!!!! I follow this stuff a bit and banks / lenders jacked the rates much higher than the raised amount by the Fed, and even before the Fed! Not to mention ‘points’ they also require. So, not feeling sorry for the banks. Their stocks were up last week. So, they can bring those rates back down some if they really wanted to! Guess adjustable loans aren’t selling as much as they thought. In any case, guess banks forgot raised rates were supposed to slow things down; system is working.