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M360 Roundup - Volume 70

January 13th - 17th, 2024

M360 Roundup - Volume 70

Cole LaCour

Equity markets rose Friday, with the S&P 500 posting its biggest weekly gain since the election, driven by strong consumer discretionary and technology stocks


  • The S&P 500 is up 3.71%, the Nasdaq is up 3.84%, and the Dow Industrials is up 3.73% WTD


  • The 10-Yr U.S. Treasury yield has decreased -0.143% to a current yield of 4.623%, whereas the 30-Yr U.S. Treasury yield decreased -0.102% to a current yield of 4.855%


  • Crude oil prices increased 0.40% to a current $77.37/bbl while bitcoin increased 9.87% to a current $103,855.10/coin


  • Investors are debating whether the Federal Reserve might reverse its recent rate cuts and raise rates this year, weighing the higher barriers to hiking rates versus cutting them, amidst economic uncertainty and historical precedence for cautious policy shifts [WSJ


  • Wall Street views U.S. homes as overvalued by 10% to 35%, with institutional investors scaling back purchases due to high borrowing costs and low cap rates, while some shift to building or renovating properties to navigate the overpriced housing market [WSJ


  • The Congressional Budget Office forecasts slower U.S. population growth due to reduced immigration and lower fertility rates, predicting deaths will outpace births by 2033, impacting economic growth and fiscal policy over the next three decades [WSJ


  • Wall Street banks thrive on trading and deals, while slow loan growth signals challenges for Main Street lenders and a shift toward nonbank financing [WSJ


Reversing tax cuts and tariffs in Trump's economic plans risks stalling growth with China growing its $1 trillion trade surplus


  • Despite Western tariffs and industrial policies aimed at reducing reliance on China, its trade surplus has grown to nearly $1 trillion, highlighting the enduring dominance of China's manufacturing sector and the challenges in rebalancing global trade [WSJ]


  • As the labor market cools, power shifts back to employers, leading to stricter return-to-office mandates, reduced perks, and subtle cost-cutting measures, signaling a reset in workplace expectations [WSJ]


  • Reversing the order of tax cuts and tariffs in President-elect Trump's economic plans risks stalling growth, as front-loaded tariffs could act as a consumer tax and hinder momentum before any growth-driven tax relief is introduced [WSJ


M&A activity continues to remain mixed


  • Chinese TikTok-rival REDnote's largest shareholders GGV Capital, GSR Ventures and Tiantu Capital are in talks to sell existing shares to Tencent, Hongshan Capital, and Hillhouse Investment at a $20B valuation


  • Honda is interested in acquiring French auto maker Renault's 35.7% stake in Nissan, which is worth $3.6B 


  • KKR is considering joining Apollo with a $6.4B investment in the proposed family-led take-private of 7-Eleven-owner Seven & i


  • O&G firm Civitas Resources is exploring a sale its Denver Basin assets, which could be valued at over $4B


  • Industrial equipment company United Rentals agreed to acquire smaller rival H&E Equipment Services in a $4.8B cash deal, including debt


  • Heavy industrial parts maker Wabtec agreed to buy Evident's inspection technologies unit for $1.78B 


  • Brookfield is planning a sale of its $1.3B Spanish student housing business Livensa Living


  • French PE firm Ardian will acquire a 60% stake in three of luxury goods company Kering's Paris properties for $860M


Recent developments across four key industries highlight colder weather driving up natural-gas prices, the Supreme Court potentially banning TikTok, and JPMorgan planning to launch Chase in Germany by 2026 


Energy & Natural Resources


  • TotalEnergies expects a slight increase in fourth-quarter hydrocarbon production and higher gas prices to offset weaker oil prices, but refining margins remain low despite some improvement [WSJ


  • U.S. crude oil stockpiles fell for the eighth week, driven by lower imports and production, while gasoline and distillate inventories rose significantly, reflecting reduced refinery capacity use and softening demand [WSJ


  • Colder weather has significantly reduced the natural-gas surplus, driving prices up 58% from last year as storage levels near the five-year average [WSJ


Technology, Media, & Telecommunications


  • The Supreme Court's upholding of a ban on TikTok in the U.S. over national security concerns may lead to its shutdown, though political interventions and potential negotiations could offer paths for its return or adaptation [WSJ


  • Nintendo shares fell 4.3% after its underwhelming Switch 2 announcement, which lacked key details like price and launch date, disappointing investors despite plans for exclusive games and a 2025 release [WSJ


  • Macquarie will invest up to $5 billion in Applied Digital's AI data centers, including $900 million for a North Dakota facility, highlighting strong investor interest in AI infrastructure and expansion opportunities [WSJ


Healthcare & Life Sciences 


  • Medicare's second round of drug price negotiations targets 15 high-cost medications, including Ozempic and Wegovy, aiming to save billions by mandating steep price cuts starting in 2027 despite pushback from pharmaceutical companies [WSJ


  • The FDA approved flavored Zyn nicotine pouches as a safer alternative for adult smokers while imposing advertising restrictions to limit youth exposure amid rising concerns about teen usage [WSJ


  • Eli Lilly's Omvoh received FDA approval for treating moderate to severe Crohn's disease, expanding its use beyond ulcerative colitis and offering new treatment options for patients [WSJ


Financial Services


  • JPMorgan Chase, under CEO Jamie Dimon's leadership, is expanding its digital retail banking footprint globally, with plans to launch Chase in Germany by 2026, leveraging its $17 billion annual tech investment to compete in Europe's unprofitable banking sector following success in the U.K. [WSJ


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