2023-04-13 07:17:14 ET
Listen on the go! Subscribe to Wall Street Breakfast on Apple Podcasts and Spotify Consumer inflation eases in March : core CPI rises 5.6% Y/Y, as expected. SoftBank ( SFTBY ) sells most of its remaining Alibaba ( BABA ) stake amid decline in its technology investment, limiting China exposure. Newly public Alliance Entertainment ( AENT ) files for Nasdaq uplisting , offering. Learn more about these stocks with Seeking Alpha Premium .
This is an abridged transcript of the podcast.
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Consumer inflation eases in March but core inflation is still coming in hot
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Today is crypto Thursday. We’re hearing from our weekly contributor Mike Fay with the Investing Group BlockChain Reaction on Seeking Alpha and one topic is mining.
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SoftBank sells most of its remaining Alibaba stake amid a decline in its technology investment, limiting it’s exposure to China
OUR TOP STORY
The government revealed that consumer prices climbed 5% in March compared to last year, slowing from an annual pace of 6% seen in February. The result also came in below the figure predicted by economists. On a month-over-month basis, the Consumer Price Index ticked up 0.1%, again less than expected. However, core CPI, which excludes food and energy prices, matched projections with a 5.6% annual increase.
The inflation report initially prompted a wave of buying, but investors lost conviction early in the day.
Daniel Jones is a Seeking Alpha contributor. He said "It seems that once the data was digested, the negative came out. This negative revolves around the idea that a decline in prices that is too rapid could cause a hard landing for the economy as opposed to the soft landing that the Federal Reserve is pushing for."
According to the CME FedWatch tool, markets are pricing in a 66.5% probability of a 25-basis point hike at the Federal Open Market Committee's May 2-3 meeting.
Stocks finished a bumpy session in the red on Wednesday, as investors digested the latest consumer price data.
The Nasdaq ( COMP.IND ) closed -0.9%, the S&P 500 ( SP500 ) ended -0.4% and the Dow ( DJI ) finished -0.1%.
Seven of the 11 S&P sectors finished lower, paced by a 1.5% drop in Consumer Discretionary. Communication Services and Tech posted modest declines. On the other side of the spectrum, Industrials and Energy edged out thin gains.
The bond market reacted to the inflation data with buying, sending yields lower. The 10-year yield ( US10Y ) retreated 2 basis points to 3.42%, while the more rate-sensitive 2-year yield ( US2Y ) declined 8 basis points to 3.98%.
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SoftBank ( OTCPK:SFTBY ) is raising cash by selling the majority of its remaining shares in Chinese internet giant Alibaba (NYSE: BABA ) amid a downturn in its technology investments and a move to limit its China exposure.
This is according to the Financial Times, citing regulatory filings it had analyzed.
The move reflected its shift to "a defensive mode" to address a more uncertain business environment, and added the company would provide details in its quarterly results announcement in May.
Alibaba shares fell as much as 5.2% in Hong Kong on Thursday, erasing about $13 billion of market value. SoftBank shares were little changed in Tokyo.
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Secretary of Energy Jennifer Granholm said the U.S. government could begin buying oil to replenish the Strategic Petroleum Reserve later this year "if it is advantageous to taxpayers."
Granholm made these comments at an energy conference in New York.
Those comments are in contrast to her remarks to Congress last month , when she said it would be "difficult to take advantage of this low price."
The Biden administration had said previously it would begin replenishing the emergency reserve if U.S. oil prices fell to a $67-$72/bbl range.
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Today is crypto Thursday
We’re joined by Mike Fay, the Investing Groups Leader of BlockChain Reaction on Seeking Alpha.
He’s talking bitcoin levels, CleanSpark and ETH Shanghai
*audio from Mike Fay*
Mike Fay referenced his article about CleanSpark in his report. I’ll leave a link to that article in show notes.
MORE OF OUR TOP STORIES
The European Commission sent Broadcom a "statement of objections" over its proposed deal to buy VMware (NYSE: VMW ).
In the statement , the E.C. said it was concerned that Broadcom ( AVGO ) “may restrict competition in the market for certain hardware components which interoperate with VMware's virtualisation software.”
The E.C. now has until June 21, 2023 to make a final decision
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3M’s healthcare business may not keep its headquarters in Minnesota after being spun off into a separate company by the end of the year,
This is according to a report from the Star Tribune on Wednesday.
The new company will remain in Maplewood, Minnesota, during a transitional period after the spinoff. Its management will decide on an eventual location for its global headquarters.
3M (NYSE: MMM ) so far doesn’t have a new name for the healthcare business. The company also hasn’t said who will lead the new company.
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Warner Bros. Discovery (NASDAQ: WBD ) has unveiled its combination of HBO Max and Discovery+ -- and it's a new, bigger streaming service simply named "Max."
Max will make its debut May 23.
The price is not changing from the related tiers at HBO Max. But there will be a new tier that’ll cost $19.99/month. This top tier will feature up to 4K resolution, Dolby Atmos sound, and more concurrent streams and downloads.
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IBM (NYSE: IBM ) is exploring a sale of its weather business and the unit could fetch more than $1 billion.
According to the Wall Street Journal, a potential sale is at an early stage, Private equity is the most likely buyer for the business, which includes weather.com
IBM ( IBM ) agreed to buy The Weather Company's B2B, mobile, and cloud-based Web properties, including Weather.com and Weather Underground, in 2015, for a reported price of about $2 billion.
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Tesla (NASDAQ: TSLA ) is planning another price reduction for Model 3 and Model Y vehicles in China.
The Hong Kong Economic Times said on Wednesday that the two models will see significant price cuts, with the Model 3 Performance edition seeing a 14.7% sticker price reduction, while the long range version of the Model 3 will see about an 11% discount. The report says Model Y prices will be cut by about 9%.
The changes are slated to go into effect as of April 15.
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US GoldMining (NYSEMKT: USGO ), a spin-out of Canada's GoldMining (NYSE: GLDG ), has updated terms for a proposed $20M initial public offering, which is expected to occur later this week.
The Alaska-based mining company plans to offer 2M units priced at $10 per unit. Each unit would consist of one share plus one warrant to buy one share for $13.
The company intends to list its shares on Nasdaq under the symbol USGO.
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Alliance Entertainment ( OTCPK:AENT ), which went public through a SPAC merger in February, has filed to uplist its shares to the Nasdaq and hold a public offering.
Alliance didn't specify the terms of the deal in its filing. The company hopes to uplist its shares to Nasdaq under the symbol AENT. The shares currently trade OTC under the same symbol.
Based in Florida, Alliance bills itself as a "gateway" between entertainment brands such as Sony, Xbox and Mattel and retailers like Best Buy, Amazon and Walmart.
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Now let’s take a look at the markets as of 6:20 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are in the green. The Dow is up a tiny fraction. The S&P 500 is up 0.1% and the Nasdaq is up 0.2%. Bitcoin is up 0.6% at $30,203.
On today’s economic calendar, at 8:30 am initial jobless claims. Also at 8:30 am the producer price index.
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Wall Street Breakfast Podcast: Consumer Inflation Eases, Core Remains Hot