A daily market update from FS Insight — what you need to know ahead of opening bell

“A prudent question is one-half of wisdom.” — Francis Bacon

Overnight

Google unveils custom Arm-based chips, following similar efforts at rivals Amazon, Microsoft (CNBC)

Intel unveils latest AI chip as Nvidia competition heats up (CNBC)

Costco selling as much as $200 million in gold bars monthly, estimates Wells Fargo (CNBC)

EIA raises 2024 oil output and price forecasts, crude expected to average $83.78 per barrel (RT)

For the first time since the pandemic, more workers prefer hybrid work than fully remote setups (PMC)

Nearly nine years after co-masterminding the blockbuster merger of Kraft Foods and Heinz together with Warren Buffett, Brazilian PE firm 3G Capital quietly exited its 16.1% stake in Kraft Heinz in Q423 (CNBC)

L’Occitane International SA’s billionaire owner Reinold Geiger nearing deal to take the skin-care company private with funding help from Blackstone (BBG)

Blackstone is going on a real estate offensive, making $10 billion in multifamily purchase (WSJ)

Hedge funds are dumping equities at fastest rate in three months (CNBC)

Copper trading near 15-month highs amid tight supply and growing demand (BBG)

Strategist survey shows expectation for 10Y yield to wipe out YTD increase, fall to 4.0% in six months (RT)

Merger arb investors say M&A less robust than expected after surge to start the year (BBG)

USDA says inflation for food at home leveling, but prices still rising at restaurants (BBG)

Vivendi-owned Canal+ made a formal bid Monday to buy all shares of South African broadcaster MultiChoice, valuing it at $2.9 billion, with billionaire Patrice Motsepe in talks with Canal+ to join the bid, in part to help Vivendi meet the country’s stringent Black-ownership requirements (BBG)

Boeing’s March deliveries fall by 50% due to increased quality checks (RT)

Norfolk Southern agrees to $600 million Ohio derailment settlement without admitting liability, wrongdoing, or fault (WSJ)

Tanzania’s railway authority receives electric trains purchased from South Korean manufacturer Hyundai Rotem for a line that will connect the country to Rwanda, Uganda, Burundi, and DR Congo (ITW)

Meta may launch smaller versions of its AI model, requiring less computational power and memory to train and run, as a precursor to the launch of the biggest version of Llama (The Verge)

OpenAI, Meta close to releasing new AI models that will be capable of reasoning and planning (FT)

Baird says Tesla may announce another surprise drop in sales in its next earnings (BBG)

Nigerian bank mergers loom after regulator’s rule change on capital requirements (Semafor)

TikTok staff face big U.S. tax bills on shares they can’t sell (FT)

Commodities CEOs say era of bribes is over (FT)

Global VC funding dropped 30% in Q1 (BBG)

Trader places biggest-ever bet on SOFR futures (BBG)

Australia sets mandatory notification rule in M&A shakeup (RT)

Exotic corporate debt products lure yield-hungry Indian savers (BBG)

Falling loan demand builds rate cut pressure at ECB (FT)

U.S. small-business sentiment slid to lowest level in over 11 years (RT)

Global firms with China units switch from dollar to yen for borrowing (RT)

Fidelity clawback of free ETF trading costs to hit investors (FT)

HSBC to accelerate China wealth expansion (RT)

JPMorgan, BlackRock among BLS economist’s CPI ‘super users’ (BBG)

Goldman see European defense stocks as overvalued (BBG

Traders grow increasingly bullish on oil (BBG)

Global steel demand is expected to return to growth this year (RT)

European ports turn into ‘car parks’ as vehicle imports pile up (FT)

Comcast sells $1.2B in ads for Paris Olympics (BBG)

Carnival puts Miami HQ for sale as Florida real estate soars (BBG)

Salt Lake City officially the hottest job market for 2023 (WSJ)

First news

  • Where will the U.S. get a steady supply of battery materials?
  • Who will stand against the gathering tide of M&A among investment firms?
  • How will the gobble-happy LLMs of AI giants find enough original content to feed on?

Chart of the Day

The Perennial Questions

MARKET LEVELS

Overnight
S&P Futures +2 point(s) (+0.0% )
overnight range: +1 to +10 point(s)
 
APAC
Nikkei -0.48%
Topix -0.43%
China SHCOMP -0.7%
Hang Seng +1.85%
Korea flat
Singapore flat
Australia +0.31%
India +0.58%
Taiwan -0.16%
 
Europe
Stoxx 50 +0.8%
Stoxx 600 +0.58%
FTSE 100 +0.58%
DAX +0.7%
CAC 40 +0.54%
Italy +0.67%
IBEX +0.47%
 
FX
Dollar Index (DXY) -0.07% to 104.07
EUR/USD +0.06% to 1.0863
GBP/USD +0.13% to 1.2695
USD/JPY +0.05% to 151.84
USD/CNY +0.02% to 7.2338
USD/CNH +0.05% to 7.2417
USD/CHF -0.01% to 0.9034
USD/CAD -0.02% to 1.3568
AUD/USD -0.08% to 0.6624
 
Crypto
BTC -0.21% to 68983.63
ETH +0.17% to 3518.74
XRP -2.48% to 0.6105
Cardano -3.61% to 0.5788
Solana -1.04% to 170.5
Avalanche +1.01% to 46.93
Dogecoin -1.31% to 0.188
Chainlink -1.48% to 17.33
 
Commodities and Others
VIX +1.8% to 15.25
WTI Crude +0.31% to 85.49
Brent Crude +0.29% to 89.68
Nat Gas +2.19% to 1.91
RBOB Gas +0.04% to 2.757
Heating Oil +0.16% to 2.681
Gold -0.2% to 2348.12
Silver -0.5% to 28.01
Copper +0.68% to 4.314
 
US Treasuries
1M -1.1bps to 5.3629%
3M +1.2bps to 5.3597%
6M -1.1bps to 5.2997%
12M -1.9bps to 5.0133%
2Y -0.6bps to 4.7365%
5Y -0.7bps to 4.3666%
7Y -0.5bps to 4.3662%
10Y -0.6bps to 4.3557%
20Y -0.5bps to 4.589%
30Y -0.4bps to 4.4924%
 
UST Term Structure
2Y-3 M Spread narrowed 2.6bps to -66.2 bps
10Y-2 Y Spread widened 0.0bps to -38.3 bps
30Y-10 Y Spread widened 0.2bps to 13.5 bps
 
Yesterday's Recap
SPX +0.14%
SPX Eq Wt +0.4%
NASDAQ 100 +0.39%
NASDAQ Comp +0.32%
Russell Midcap +0.21%
R2k +0.34%
R1k Value +0.16%
R1k Growth +0.12%
R2k Value +0.43%
R2k Growth +0.25%
FANG+ +0.11%
Semis +0.47%
Software +0.28%
Biotech +1.37%
Regional Banks +0.65% SPX GICS1 Sorted: REITs +1.29%
Utes +0.55%
Cons Staples +0.51%
Cons Disc +0.46%
Healthcare +0.39%
Materials +0.27%
Tech +0.16%
SPX +0.14%
Comm Srvcs +0.11%
Energy +0.06%
Indu -0.22%
Fin -0.5%
 
USD HY OaS
All Sectors +1.4bp to 346bp
All Sectors ex-Energy +1.3bp to 332bp
Cons Disc +0.8bp to 281bp
Indu +0.1bp to 245bp
Tech +3.6bp to 437bp
Comm Srvcs +2.3bp to 601bp
Materials +2.4bp to 305bp
Energy +1.1bp to 264bp
Fin Snr +1.0bp to 305bp
Fin Sub -0.4bp to 236bp
Cons Staples +2.0bp to 303bp
Healthcare -1.2bp to 406bp
Utes +2.6bp to 207bp *
DateTimeDescriptionEstimateLast
4/108:30AMMar CPI m/m0.30.4
4/108:30AMMar Core CPI m/m0.30.4
4/108:30AMMar CPI y/y3.43.2
4/108:30AMMar Core CPI y/y3.73.8
4/102PMMar 20 FOMC Minutesn/a1.0
4/118:30AMMar PPI m/m0.30.6
4/118:30AMMar Core PPI m/m0.20.3
4/128:30AMMar Import Price m/m0.30.3
4/1210AMApr P UMich 1yr Inf Exp2.92.9
4/1210AMApr P UMich Sentiment79.079.4
4/158:30AMMar Retail Sales m/m0.40.6
4/1510AMApr Homebuilder Sentiment51.051.0

MORNING INSIGHT

Good morning!

We are still buying dips (even these baby dips).

March CPI could be an upside catalyst for stocks to break this 18-day consolidation.

Click HERE for more.

TECHNICAL

Tuesday’s late day rally in both Treasuries and Equities helped eliminate much of the early-day weakness and, by end of day, SPX had risen to multi-day highs while TNX had dropped nearly 7 bps on the day.

Most of the early Semiconductor weakness was reversed, and the Philly Semiconductor Index (SOX) rose by nearly 1%. Meanwhile, sector-wise, Materials, REITS, Communication Services, Healthcare, and Technology all rose by more than +0.50%.

AAPL Selloff could be complete this week

One of the more significant stocks to always keep a close eye on, given its percentage holding within SPX and QQQ, is AAPL, which has steadily declined from a peak near $200 nearly four months ago.  Incredibly enough, SPX managed a 10% quarterly return despite AAPL losing nearly $30 dollars from its peak. Based on cycles, technical structure, and DeMark’s counter-trend exhaustion tools, AAPL 0.16%  looks quite close to bottoming. 

Click HERE for more.

CRYPTO

In our latest video, we discuss why now is a good time to consider adding miners, and a couple of ETH catalysts to look for on the horizon.

Click HERE for more.

FIRST NEWS

Clock Ticking on Battery-Materials Integration. A report by the United States Institute of Peace (USIP) emphasizes the need for the U.S. to implement strategic changes to keep pace with Chinese and Gulf state companies actively tapping into Africa’s vast mineral resources. The report highlights the U.S.’s near-total dependence on “foreign entities of concern,” mainly China, for critical minerals such as graphite, manganese, and cobalt, which are essential for electric vehicle battery manufacturing. Identifying this reliance on China as a national economic and security concern, the report advises a renewed focus on “commercial diplomacy” to enable the creation of new mineral supply chains around the world, including in Africa.

It also argues that U.S. firms could offer a more beneficial approach to mining in Africa compared to Chinese firms, which it claims offer “little local value” and enable corruption and human rights abuses, including child labor. Among its suggestions is the opening of a U.S. embassy in the mining city of Lubumbashi in the Democratic Republic of the Congo (DRC), the world’s largest cobalt producer. It also calls for the execution of a Memorandum of Understanding signed in December 2022 to establish a mining supply chain for electric vehicle batteries with the DRC and Zambia, the second-largest cobalt producer in Africa and one of the world’s leading copper producers.

Other recommendations include supporting African media and civil society to drive accountability and developing a comprehensive critical-minerals strategy as part of U.S.-Africa policy. Semafor

Can Do It, Won’t Do It. Much has been written about the forces pushing investment firms to merge. One investment giant that has found it easy and desirable to resist these forces is the fiercely private Capital Group, a manager of $2.2 trillion in traditional stock and bond funds. “We are not going to buy anybody and we are not going to sell ourselves,” said CEO Mike Gitlin in Hong Kong two days ago. “The one thing that for sure happens in M&A is, it’s distracting.” A PWC survey last summer revealed that three-quarters of asset managers believe they’ll merge with a rival over the next few years. Semafor

The Perennial Questions

Ouroboros Dept. The big existential question of the latter third of the first third of the twenty-first century (i.e. the 2020s) is: will the giants of AI consistently be able to find the raw materials, i.e. the words and images that companies call tokens, to train their models? One study suggests the world may run out of high-quality data as soon as 2026. Others predict a dystopian future in which most new online content will be AI-generated by 2030 – which is in ~5 years, i.e. sooner than we all think – meaning that ChatGPT will constitute a carousel of inputs of its own output. There have been reports that Meta executives had the idea of buying a publisher on the order of Simon & Schuster so as to legally absorb its published works. Less legally, they floated the idea of putting copyrighted materials into their AI model and worrying about the lawsuits later.

Disclosures (show)

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