Global News： Is the American Banking Crisis Back？ Risk aversion rose sharply, and US stocks closed down across the board.
On Tuesday, local time, US stocks finally got rid of the light market trend for more than a week, but unfortunately it was not a big rise but a big drop. The three major indexes closed down across the board, with the Dow down more than 300 points and the Nasdaq down 2%.
On the one hand, the power of the earnings season began to show, and giants such as McDonald’s and UPS warned that the macroeconomic prospects were not good in the earnings report. On the other hand, the deposits of Daiwa Bank in the United States dropped by 40%, and UBS’s net profit in the first quarter halved, all of which highlighted that the banking crisis had not completely subsided and the market risk aversion was ignited.
On Monday, the First Total Bank disclosed that even though Wall Street giants had jointly deposited 30 billion dollars, they lost over 70 billion dollars in the first quarter of this year alone. At the end of the first quarter, the deposit figure was only $104.5 billion, far below the $136.6 billion expected by analysts.
The first total and the bank lost 49.38% of its market value on Tuesday. In the news, the media reported that the bank was going to sell "50 billion to 100 billion dollars" of long-term assets to solve the mismatch problem. It is reported that Biden administration officials have been keeping in touch with Daikyo Bank in recent days, and the White House is increasingly worried that there is not much time left for Daikyo Bank to appease investors and depositors, but American policy makers are not worried that risks may spread further among banks.
It is worth noting that due to various indications that there are still many risk factors in the market, traders no longer bet 100% that the Fed will continue to raise interest rates before the middle of this year. According to the observation tool of the Federal Reserve, the probability of raising interest rates by 25 basis points in May fell to 81.5%, compared with 90.5% the previous day.
However, for technology stocks, the financial reports of Microsoft and Google have slightly eased some market concerns. AI and cloud services helped Microsoft’s financial report exceed expectations, with revenue of $52.9 billion, higher than analysts’ expectations of $51.03 billion; Earnings per share were $2.45, higher than analysts’ expectations of $2.24. More importantly, a strong profit guidance was released, which rose by 8% after hours.
Google’s parent company Alphabet’s revenue in the first quarter was $69.79 billion, higher than analysts’ expectations of $68.99 billion. Earnings per share was $1.17, higher than analysts’ expectations of $1.09. At the same time, it was announced that the board of directors authorized an additional repurchase of up to $70 billion. Google rose more than 4% after hours.
In addition, OpenAI plans to launch a new product, ChatGPT Business, which is the enterprise version in the next few months. At the same time, the new function of ChatGPT allows all users to turn off chat records, which will not be used to train and improve the model of OpenAI.
In terms of important macro news, according to Xinhua News Agency, US President and Democrat Biden officially announced his re-election as US President on the 25th. Biden released a video on the same day to officially announce his decision to run for re-election as president of the United States, and pointed his finger at the so-called Republican extremist forces, saying that the United States is still in the struggle of "fighting for the soul of the country" and he needs more time to "complete this work."
This means that next year, the world may once again witness the "peak confrontation" between Trump and Biden.
[overnight U.S. stocks]
Among the large Chinese stocks, Alibaba fell by 4.58%, Baidu by 4.63%, Netease by 6.35%, Tencent Music by 4.96% and Pinduoduo by 3.25%.
Among the large US technology stocks, Apple fell 0.94%, Amazon fell 3.43%, Google A fell 2.00% and Netflix fell 1.97%.
[global index]
[global goods]
The main contract of WTI crude oil closed at $77.26 per barrel, down 1.90%; The main contract of Brent crude oil closed at $80.76 per barrel, down 2.38%; The main contract of crude oil in the previous period closed at 551.20 yuan per barrel overnight, down 2.58%.
Overnight, the Shanghai gold main contract closed up 1.06% to 447.58 yuan per gram; The main contract of Shanghai Bank closed down 0.16% to 5622.00 yuan per kilogram.
[overnight news]
Biden officially announced his re-election as president of the United States.
According to Xinhua News Agency, U.S. President and Democrat Joe Biden officially announced his re-election campaign on the 25th. Biden released a video on the same day to officially announce his decision to run for re-election as president of the United States, and pointed his finger at the so-called Republican extremist forces, saying that the United States is still in the struggle of "fighting for the soul of the country" and he needs more time to "complete this work."
Biden is 80 years old. In the 2020 US presidential election, he defeated Trump, the then US president and Republican, and became the US president in January 2021.
Banking crisis worries have re-suppressed the market’s interest rate hike pricing for the Fed.
The interest rate swap contract of the Federal Reserve in June currently reflects that the benchmark interest rate of the central bank is only 20 basis points higher than the current effective federal funds rate, which implies that the possibility of raising interest rates in one of the next two FOMC meetings is about 80%, while it was almost certain that the Fed would raise interest rates in May.
The debt ceiling deadlock is hard to solve. The White House says Biden will veto the Republican bundled spending reduction plan.
The Republican proposal put forward by House Speaker McCarthy requires that the debt ceiling of $1.5 trillion be raised and the future total government expenditure be reduced by $4.5 trillion. On Tuesday, the White House said that the debt ceiling must be solved without any conditions. Also on Tuesday, US Treasury Secretary Yellen warned lawmakers that if the debt ceiling is not resolved, the economic achievements made in the past two years will be threatened.
New Governor of Bank of Japan: Tightening monetary policy now may lead to serious consequences.
Industry insiders predict that Ueda and Kazuo may choose "a cautious start" for their first monetary policy meeting this Friday, but they do not rule out the possibility of changes in June.
Argentina’s inflation exceeded 100% for the first time in 30 years.
As the inflation rate exceeded 100% for the first time in 30 years, and the record drought dealt a heavy blow to agriculture-related industries, Argentina’s economic activity remained stagnant in February, with GDP increasing by 0% month-on-month and only 0.2% year-on-year. But high inflation does not seem to cool down in a short time. Argentina’s central bank predicts that the country’s inflation rate will reach 110% in 2023.
[company news]
Prosus, the major shareholder of Tencent, resold 789,600 shares of Tencent, and its shareholding ratio dropped to 25.99%.
Prosus, the largest shareholder of Tencent and the Dutch subsidiary of South African Naspers Group, announced in official website on April 25th local time that in order to continue to implement the repurchase plan, Prosus sold 789,600 ordinary shares of Tencent on April 25th, 2023, and its shareholding ratio dropped to 25.99%. In addition, as part of the repurchase plan, during the period from April 17, 2023 to April 21, 2023, Prosus repurchased 2,651,096 shares of Prosus at an average price of 698,795 euros per share, with a total consideration of about 185 million euros.
Resist the impact of Microsoft AI, Google search returns to growth in the first quarter, and the cloud business turns losses into profits.
In the first quarter, Alphabet’s revenue and profit were better than expected. The year-on-year growth rate of revenue exceeded expectations and accelerated to 3%. EPS profit decreased by 4.9%, less than half of market expectations. Google’s advertising revenue fell by 0.2%, which was much lower than expected, and its search revenue changed from 3.6% in the fourth quarter to nearly 2%. YouTube advertising revenue fell less than expected; Google Cloud changed from an operating loss of more than $700 million a year ago to a profit of 190 million; The expenses related to layoffs and office space reduction in the first quarter were $2.6 billion. Alphabet announced that it plans to buy back up to $70 billion in shares.
AI and cloud services help Microsoft’s financial report exceed expectations.
After the close of trading on Tuesday, Microsoft announced its financial data for the third quarter. Among them, the revenue was 52.9 billion US dollars, which was higher than the analyst’s expectation of 51.03 billion US dollars; Earnings per share were $2.45, higher than analysts’ expectations of $2.24. In terms of main business, revenue from productivity and business services reached $17.5 billion, up 11% year-on-year; Intelligent cloud’s revenue was US$ 22.1 billion, up 16% year-on-year; Personal computer business revenue was $13.3 billion, a year-on-year decrease of 9%. After the financial report was released, Microsoft’s share price rose more than 8% after hours.
Microsoft CEO Nadella said in a statement that the company’s performance indicates the beginning of a "new era of computing", and the world’s most advanced artificial intelligence model is being combined with the world’s most common user interface-natural language.
OpenAI will launch a new paid product, ChatGPT Enterprise Edition, and add a new function to "appease" supervision.
OpenAI plans to launch a new product ChatGPTBusiness in the next few months, and introduce a new subscription group for ChatGPT to meet the needs of corporate customers. In addition, the new function of ChatGPT allows all users to close the chat record, which will not be used to train and improve the model of OpenAI; ChatGPT data can also be exported to users’ mailboxes.
UBS’s quarterly results were bleak, but after the $3.2 billion acquisition, it successfully "retained" $28 billion of Credit Suisse’s client funds.
UBS released a quarterly report that after the announcement of the acquisition of Credit Suisse, the wealth management department of UBS obtained a net increase of 28 billion US dollars, of which 7 billion US dollars flowed in in the last ten days of March alone. However, on the whole, UBS’s first-quarter report card is still disappointing: its total revenue decreased by 7% year-on-year to $8.74 billion, its net interest income decreased by 22% year-on-year to $1.39 billion, and its net profit decreased by 52% year-on-year to $1.03 billion, setting a record for the lowest quarterly profit in three years. All three results were lower than market expectations. UBS said that the acquisition of Credit Suisse in the second quarter will actively reduce the risk and resource consumption of Credit Suisse’s investment banking business.
After the "escape" of deposits, the first total and the bank brewed self-help and considered selling assets of up to 100 billion US dollars.
According to the media, First Total Bank may give warrants or preferred shares to potential buyers, including big American banks, to encourage them to buy assets of the bank above the market value; The bank tried to strengthen its balance sheet, avoid being taken over by the regulator FDIC, and clear the way for possible financing in the future.
Apple is developing AI-driven health guidance services and emotional tracking functions.
According to informed sources, Apple is developing an AI-driven health guidance service, which will be available as soon as next year. For this year’s WWDC, Apple will release the user emotion tracking function and the first health monitoring application for iPad devices.
[financial calendar]
