Weekly Market Update

Author : The BlackSummit Team
Date : April 1, 2023

The BlackSummit Team | April 1, 2023

Global Market News

Global equities make gains

Global equities made gains this week. The S&P 500 and Dow Jones closed up 3.48% and 3.22%, respectively, while the Nasdaq rose 3.37%. The US 10-year Treasury yield began rising again, ending the week at 3.47%. The price of a barrel of West Texas Intermediate crude oil shot up more than 9% to end the week at $75.67. Volatility, as measured by the CBOE Volatility Index, continued to decline, ending Friday at 18.70.

First Citizens buys out SVB, White House proposes stricter banking rules

This week, First Citizens Bank agreed to acquire the deposits and loans of Silicon Valley Bank (SVB), calming some of the financial volatility we’ve seen in the markets over the last couple of weeks. While the SVB case is still being investigated and assessed by the Federal Reserve, the Vice Chair for Supervision Michael Barr called the SVB failure a textbook case of mismanagement in his testimony before the Senate Banking Committee. On Thursday, the White House proposed stricter banking regulations that would include reinstating liquidity requirements and annual stress tests for banks with $100-250 billion in assets.

Updated Market Figures

International Developments

Netanyahu pauses judicial reform amid protests

Right-wing Israeli Prime Minister Benjamin Netanyahu has delayed voting on his coalition’s controversial judicial reform package in response to widespread protests against the legislation running the gamut of Israeli society, including within Israeli security services. The Israeli PM has come out in support of dialogue over the bill. Proponents of the legislation argue that it is necessary to make the court more representative of the diversity of Israeli society and to give lawmakers primacy over unelected judges, while critics argue that it will radically expand government authority by eliminating the judicial check.

Finland becomes a NATO member

Turkey has ratified Finland’s bid to enter into the North Atlantic Treaty Organization (NATO), becoming the final country to sign off on accession into the military alliance. An exchange of letters will now take place in line with NATO accession protocol, after which Finland, which shares a border with Russia, will be formally invited into the alliance. The vote comes after a drawn-out process, in which Turkey sought concessions from both Sweden and Finland in order to vote affirmatively. While Finland’s process has ended in success, Sweden’s NATO aspirations nonetheless remain tied up over Turkish concerns regarding certain Kurdish individuals, which the government views as terrorists, living in Sweden.

US Social & Political Developments

Trump becomes first former president to be indicted

A Manhattan grand jury indicted former president Donald Trump on Thursday over his role in hush money payments made to porn actress Stormy Daniels. The move makes Trump the first former president to be indicted in US history. Trump is set to turn himself in on Tuesday, after which he will be arraigned and the specific charges will be unsealed. The former president has denied any wrongdoing, vowed to stay in the race for the GOP nomination for president, and called on his supporters to protest the prosecution.

US-Russian tensions reach new heights over nuclear weapons and journalists

Tensions between the US and Russia escalated to new highs this week as a US journalist was arrested for alleged espionage and the US stopped sharing its nuclear stockpile information. In response to Moscow’s February decision to suspend its participation in the New START treaty on nuclear arms control, the US stopped sharing nuclear stockpile information with Russia. Coincidentally, Russian President Vladimir Putin announced earlier this week that Moscow would be moving tactical nuclear weapons to Belarus, enraging Ukraine and its western allies. Also this week, Russian authorities arrested US reporter Evan Gershkovich from the Wall Street Journal for alleged espionage. This is the first time since the Cold War that Russia has detained a US journalist on spying charges. Foreign policy analysts believe Moscow may be gearing up for another prisoner exchange with the US.

Corporate/Sector News

AI experts sign off on letter calling for pause on ChatGPT

Hundreds of prominent AI experts, entrepreneurs, and scientists have signed a letter calling for a pause on the development and testing of AI technologies more powerful than OpenAI’s ChatGPT chatbot. The letter raises concerns that the bot is already capable of competing with humans at a growing range of tasks and could be used to automate jobs and spread misinformation. Concerns that AI systems could replace humans and remake civilization also featured. Ultimately, the letter fears that the development of ChatGPT and its positive reception may unleash an AI arms race that will run ahead of safe development of new products.

Alibaba splits into 6 businesses

Chinese e-commerce giant Alibaba announced it will split its company into 6 different business segments: Cloud Intelligence, Taobao Tmall Business, Local Services, Global Digital Business, Cainiao Smart Logistics, and Digital Media and Entertainment. Investors seem to be supportive of the restructuring because shares of the company soared 14% following the news. Each unit will be independently managed by its own CEO and board of directors and will have the flexibility to raise outside capital. The company has faced headwinds in recent years due to a slowdown in China’s economic growth and growing geopolitical tensions.

Moderna to build factory in Kenya

Moderna is set to open a manufacturing facility in Kenya, its first African facility, to produce its mRNA Covid-19 shots in a bid to increase vaccination across the African continent, where vaccination rates are still lagging. Moderna will invest $500 million in support of the facility and the facility is expected to produce as many as 500 million doses of its vaccine to the African continent each year. The facility may be operational as early as 2023.

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