Wall Street Today | Bed Bath & Beyond Files For Bankruptcy Protection, Begins Liquidation Sale
MACRO
Fed's Cook Says Assessing Tighter Credit, Strong Data for Rate Decisions
Federal Reserve Governor Lisa Cook said that US inflation remains elevated and "broad based," but she's assessing the impact of tighter credit conditions to determine how high interest rates need to be to bridle price pressures.
She pointed to welcome developments in inflation data, with many prices abating, and said it was “encouraging”that March consumer prices indicated a slowdown in housing services inflation.
But a lot of the declines have been driven by easing energy prices, she said, warning that the path back to the Fed's goal of 2% could be long and uneven.
US Watchdogs Propose Tighter Oversight of Nonbanks Posing Systemic Risk
The top US financial regulators proposed strengthening tools for addressing threats to financial stability, including changes to Trump-era guidance that had made it difficult to tag nonbank firms as systemically important institutions.
US Treasury Secretary Janet Yellen on Friday announced a proposal by the Financial Stability Oversight Council that would revise the way nonbank firms are designated.
"The existing guidance — issued in 2019 — created inappropriate hurdles as part of the designation process," Yellen said Friday. "These additional steps are not legally required by the Dodd-Frank Act. Nor are they useful or feasible. Some are based on a flawed view of how financial crises begin and the costs that they impose.”
SECTORS
Lithium Miners Slump Friday as Chile Unveils State-Led Policy
Shares of some of the world's biggest lithium mining companies traded sharply lower on Friday after Chilean President Gabriel Boric unveiled a new state-led strategy to develop its vast resources of the metal, which is vital for the development of electric vehicles.
Mr. Boric, a leftist former student protest leader who took office last year, announced late Thursday plans to create a state-owned lithium company to develop Chile's lithium resources, a key campaign promise. In a televised address, Mr. Boric said the state would take a majority stake in partnerships with private companies to develop lithium.
Citigroup: Bonds in Trouble as $1 Trillion Liquidity Drains
This year's rally in risk assets is more to do with a $1 trillion central bank liquidity injection than any improvement in the economic outlook, according to Citigroup Inc.. That massive tailwind — enough to lop 50 basis points off the investment-grade risk premium — may soon become a huge drag as policymakers get back to quashing inflation, having extinguished the banking-sector fire.
"With peak liquidity past, we would not be at all surprised if markets were now to experience a sudden pressure loss," Matt King, Citi's global markets strategist, wrote in a note. "Keep watching the liquidity data — and buckle up."
COMPANY
Bed Bath & Beyond Files For Bankruptcy Protection, Begins Liquidation Sale
$Bed Bath & Beyond Inc(BBBY.US$, the big-box retailer that for decades provided essential shopping for college dorms and new homes, will close all of its stores and liquidate inventory after its turnaround failed. The shuttering of one of America’s most well-known home goods retailers will put the jobs of 14,000 employees — and their retirement savings and severance pay — on the line. The New Jersey-based company filed for Chapter 11 bankruptcy on Sunday. The company expects its properties to be vacated by June 30.
Musk Counts On Full Self-Driving As Next Tesla Profit Driver
Elon Musk is years behind on his ambition to render $Tesla(TSLA.US$ 's cars fully autonomous. He's now saying he's willing to bet the company's profit margins on making it happen — selling cars now at “zero profit” and then earning immense sums later from the driverless software the company develops. The trouble with that for investors? As far back as 2019 he's been saying driverless cars are just around the corner. Meanwhile, a group of Tesla investors holding more than $1.5 billion of stock has accused the company of mismanagement, claiming CEO Musk is distracted by his other companies — SpaceX and Twitter — and needs reining in.
Elon Musk Urges Entrepreneurs 'Please Refine Lithium' As Evs Face Choke Point
Elon Musk this past week reminded investors of a growing challenge in the US when it comes to the electric vehicle industry — securing refined lithium for EV batteries.
"The choke point is much more on refining capacity than it is on mining. Lithium is actually is very common throughout the world, including in the US," Musk said on Tesla's earnings call. "It's much more a question of where is the refining capacity and can the refining capacity keep up."
Musk highlighted Tesla's plan for a lithium refinery near Corpus Christi, Texas which breaks ground in May.
Apple Will Take Scattershot Approach to Pitching AR/VR Headset
$Apple(AAPL.US$ is taking a scattershot approach to the upcoming Reality headset's features, hoping that a wide variety of options will get consumers to try the product. Also: The company's Apple Card savings account finally launches, its first stores open in India, and there are new details on the headset's charging system.
Source: Bloomberg, CNBC
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