Weekly Market Update
Weekly Market Update
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Author : The BlackSummit Team
Date : May 13, 2023
The BlackSummit Team | May 13, 2023
Global equities fall
Global equities fell on the week. The S&P 500 and Dow Jones closed down 0.29% and 1.11%, respectively, while the Nasdaq gained 0.40%. The US 10-year Treasury yield ticked up a few basis points, ending the week at 3.46% while the price of a barrel of West Texas Intermediate crude oil decreased again, closing Friday at $70.13. Volatility, as measured by the CBOE Volatility Index, remained level at 17.03.
US inflation slows
Investors were encouraged this week following the release of April inflation data. The US Consumer Price Index (CPI) rose only 4.9% in April, down from 5% in March. The slowdown in price growth has stimulated expectations that the Federal Reserve will pause its rate hiking cycle at the upcoming June meeting.
International Developments
Turkey anticipates presidential election
Turkey is preparing for widely anticipated parliamentary and presidential elections on May 14. The presidential election pits incumbent president Recep Tayyip Erdogan against his main challenger Kemal Kilicdaroglu. Coming into the election, Kilicdaroglu has a slight lead in the polls over Erdogan, who has reigned as president over Turkey since 2014. One major point of contention has been the Turkish economy, which has suffered under Erdogan’s management. In expectation of a possible Kilicdaroglu victory, markets have strengthened in Turkey’s main stock index.
Pakistan’s Imran Khan arrested sparking protests
Former Prime Minister of Pakistan and cricket star Imran Khan was arrested by paramilitary police – who smashed their way into a courthouse – under multiple charges of corruption. The arrest has put the country on edge, sparking violent protests, with upwards of 2,000 arrests and 8 deaths so far. Khan has denied any wrongdoing. On Friday, Khan was released from custody on a two-week reprieve from his arrest after Pakistan’s Supreme Court ruled that that the arrest was “invalid and unlawful.”
US Social & Political Developments
Migrants surge at southern border as title 42 expires
The number of migrants at the US southern border surged prior to the expiration of Title 42, but has since begun to wane. Under Title 42, law enforcement were vested with the capability to swiftly expel migrants, including asylum-seekers, from the US under emergency health authorities related to Covid-19. To fill the gap, the Biden Administration is set to engage a range of measures to deal with the border situation, such as the revival of a Trump-era policy called the transit ban, opening migrant processing centers in Guatemala and Colombia, and the employment of a new mobile phone app designed for creating appointments for asylum seekers.
Trump found guilty of sexual abuse and defamation
A Manhattan jury has found former president Donald Trump liable for sexual abuse and defamation of E. Jean Carroll, awarding $5 million in damages. The jury did not find, however, that Trump had raped her. Trump, meanwhile, has continued insisting that he does not know Ms. Carroll and is set to appeal the verdict. Despite this outcome and his indictment last month which made him the first US president to be charged with a crime, he continues to push on with his 2024 presidential campaign.
Corporate/Sector News
Tesla to build lithium refining facility in Texas
Tesla has announced plans to build a lithium refining facility in Corpus Christi, Texas, making it the first North American automaker to refine its own lithium. The strategic move aims to relieve its supply chain and meet its ambitious electric vehicle sales targets. Tesla founder, Elon Musk, has compared lithium refining to “printing money” as the metal’s importance has increased substantially considering it is a critical material in electric car batteries and other green technologies. The new Tesla facility expects to produce enough battery-grade lithium to build 1 million electric vehicles by 2025.
Twitter to become a super app
Twitter is charging forward with its goal to become an “everything app”. The company has revealed plans for new features that would make Twitter a super app, including voice and video chat and encrypted direct messaging similar to other social media platforms like Instagram, WhatsApp, and Facebook. In addition, the company has recently entered a partnership with eToro to integrate stock and crypto trading as well as financial services and e-commerce. Twitter is also seeking to boost its content creator community by offering subscription revenue opportunities and advertising services to public figures like Tucker Carlson who just announced he would relaunch his show in the app.
Chronic obesity drugs make waves in the healthcare industry
A new generation of chronic obesity and weight loss drugs has been making headlines in the healthcare industry. Accoridng to recent reports, Novo Nordisk’s Wegovy and Eli Lilly’s dual-action Mounjaro can help people lose 10-20% of their initial body weight. Global health experts, including directors from the World Health Organization, are warning that these drugs are not a “silver bullet” and are instead intended to be part of a comprehensive approach to weight loss that includes diet and exercise. Obesity continues to be at the forefront of global health issues as the worldwide prevalence of obesity nearly tripled between 1975 and 2016. In the US alone, 1 in 3 adults are considered obese, and if the trend continues, it is expected that nearly half of all US men and women will be obese by 2030.
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