Morning Brief: Top Stories Dominating Financial Media on Monday, April 11

CNBC

Investment Strategist Says Global Economy Entering ‘War-Cession’

• As per investment strategist David Roche, the global economy is likely entering a “war-cession,” and markets are underestimating its duration.
• Speaking to CNBC’s “Squawk Box Europe,” Roche, president of Independent Strategy, suggested that evidence of atrocities committed against civilians in Ukraine by Russian forces will prevent any possibility of swift peace negotiation with Russian President Vladimir Putin.
• “When the pain does become extreme on the output and performance, growth side of the economy, of course they will slip back, but I think it will take a lot longer to happen than the equity market assumes,” he said.

Reuters

Economists Expect Fed To Hike Rates Aggressively In Coming Months

• According to economists polled by Reuters, the Federal Reserve is anticipated to raise interest rates by a half-point in May and June to tackle rising inflation. They also predict a 40% chance of a recession next year.
• With the unemployment rate nearing a four-decade low, inflation at its highest level in four decades, and global commodity prices rising, most analysts believe the Fed needs to act fast to keep price pressures under control.
• 85 of 102 economists forecast 50 basis points in May, and a still-solid majority of 56 said the Fed would follow up with 50 basis points in June.

Goldman Sachs Acquires NN Investment Partners For $1.9B

• Goldman Sachs Group Inc GS has acquired Netherlands-based asset manager NN Investment Partners for 1.7 billion euros ($1.9 billion), Reuters reported.
• Through the acquisition, Goldman expects to expand its asset management footprint in Europe and increase its sustainable investment capabilities.

Western Sanctions On Russia Jeopardizes Satellite Launches To Space

• U.S. rocket companies remain saddled with hauling hundreds of satellites to space as sanctions sideline the Russian space launch industry.
• More than 800 satellites under 100 kilograms would likely be put in orbit this year alone, nearly double the number of launches year-on-year.
• Analysts saw Rocket Lab USA Inc RKLB, Astra Space Inc ASTR, Amazon.com Inc’s AMZN Project Kuiper, and Tesla Inc TSLA ’s Elon Musk owned SpaceX’s Starship as the winners from the surging demand.

BMW CEO Sees Semiconductor Shortage To Continue Into 2023

• German carmaker BMW or Bayerische Motoren Werke AG BMWYY Chief Executive Officer Oliver Zipse said the semiconductor shortage will continue into 2023, Reuters reported.
• In an interview with the newspaper Neue Zuercher Zeitung (NZZ), the CEO said, “I expect us to start seeing improvements at the latest next year, but we will still have to deal with a fundamental shortage in 2023.”
• The report noted Zipse’s comment is the latest after Volkswagen’s financial head Arno Antlitz said he expected the chip supply and demand deficit to extend until 2024.

WSJ

JetBlue, Alaska Airlines Reduce Summer Schedules Aiming For Smoother Summer

• Airlines are increasing staff and reducing flights to avoid disruptions as both customer demand and labor shortages persist.
• After canceling more than 300 flights over the weekend, JetBlue Airways Corp JBLU announced that it would curtail flights in May and into the summer due to staffing constraints. Alaska Air Group, Inc. ALK announced last week that it would limit spring flights to catch up on pilot training.
• Meanwhile, like American Airlines Group Inc AAL, some airlines claim they are ready for the summer surge following a months-long recruiting spree.

Experts See Possible Exodus Of Bank Deposits Following Pandemic Recovery

• The year 2022 could jinx the U.S. banks’ streak of increasing deposits as a group every year since at least World War II.
• Bank analysts have slashed their deposit level expectations at the biggest banks over the past two months.
• The 24 institutions that make up the benchmark KBW Nasdaq Bank Index will likely see a 6% decline in deposits in 2022.
• Bank deposits have grown sharply during the pandemic, fueling doubts over a full-year decline.

FedEx, Uber, Lyft Drivers Press Help Button Amid Rising Gas Prices

• FedEx Corporation FDX, Uber Technologies Inc UBER, and Lyft Inc LYFT have imposed new or higher fuel surcharges on customers as energy prices shoot higher amid Russia-Ukraine War.
• In an online petition being circulated, FedEx Ground contractors are asking for a cash injection, either through a temporary payment or additional compensation per stop.

Citigroup Plans To Re-Enter Saudi Arabia

• Citigroup Inc C is planning to apply for a full banking permit in Saudi Arabia.
• The move comes after Citigroup pulled out its operations from Saudi Arabia following the September 11, 2001, attack.
• The banking giant obtained a license for investment banking in 2018 and had taken part in the offering of oil giant Aramco.

Bloomberg

BitMEX Founder Says Technology Rout Could Push Bitcoin to $30K

• According to Arthur Hayes, co-founder of crypto trading platform BitMEX, Bitcoin’s tendency to fluctuate in tandem with technology stocks suggests the largest cryptocurrency might fall to $30,000 by June.
• In a blog post on Monday, Hayes stated that the same mechanism might propel Ether to $2,500. At 12:43 p.m. in Hong Kong, the tokens were worth roughly $42,300 and $3,180, respectively. Hayes stated that he is purchasing “crash” puts on both coins that expire in June while also noting that he is in a “long crypto position” overall.

Here’s Why Bitcoin Continues To Lose Conviction As Diversifier

• Bitcoin continued to move in tandem with the Nasdaq 100 index, a trend maintained since the pandemic.
• The growing correlation between the indexes erodes the argument regarding Bitcoin’s importance as a diversifier.
• The 40-day correlation between the two reached a record of 0.6945 on April 8.

Financial Times

US Banks Warn On Plummeting Investment Banking Revenues As Dealmaking Dries Up

• The largest US banks are warning of lower investment banking revenue next week on a slowdown in dealmaking following a blockbuster 2021 supported by markets and widespread stimulus measures.
• Financial Times writes that the first quarter of 2021 was a lucrative three months in which banks minted fees from a boom in initial public offerings of special purpose acquisition companies.
• The slowdown has been worse than expected. Bank executives have blamed Russia’s invasion of Ukraine and the subsequent market volatility.

Benzinga

Why Twitter Shares Are Plunging Today

• Twitter Inc. TWTR shares traded 5.15% lower in the pre-market session at $46.23 early Monday.
• The plunge in the stock comes as the world’s richest person and Tesla Inc. TSLA CEO Elon Musk declined a board position at the social media company.
• Twitter shares are tumbling following a tweet from CEO Parag Agrawal that said Musk had refused to join the company’s board of directors on the day when his addition would have become effective. The Tesla CEO had previously said that he hoped to improve the social media platform.

Elon Musk Calls Tesla Co-Founder Eberhard’ Pure Poison’

• Tesla Inc TSLA CEO Elon Musk said on Sunday he wished he had never met Martin Eberhard, one of the founders and the first CEO of the electric vehicle company now led by the world’s richest man.
• Musk said Eberhard is “true poison,” in response to a thread on Twitter, adding the real credit for creating Tesla goes to him and another co-founder JB Straubel, who now runs a battery recycling startup called Redwood Materials.

Shark Tank’s Kevin O’Leary Sats’ Bitcoin Mining Is Going To Save The World

• Shark Tank investor Kevin O’Leary believes that Bitcoin BTC/USD mining is going to save the world.
• In his keynote speech at the Bitcoin 2022 conference in Miami, O’Leary said: “Bitcoin mining is going to save the world.”
• Bitcoin’s proof-of-work consensus model requires a significant amount of energy that goes towards validating transactions. The energy consumption involved in the mining process has been a point of concern for critics of its impact on the environment.

Why Alibaba And Other Major Stocks Are Sliding In Hong Kong Today

• Shares of U.S.-listed Chinese tech companies Alibaba Group Holdings Ltd. BABA, JD.Com Inc. JD, Tencent Holdings TCEHY, and Baidu Inc. BIDU continued their losing streak in early trading in Hong Kong on Monday.
• The overall Hang Seng index was trading nearly 3% lower amid negative cues from its global peers.

BREAKING: Tesla’s China Sales Jumped 85.5% In March

• Tesla Inc TSLA reported higher sales for locally made electric vehicles in China last month, according to multiple reports on Sunday, citing the China Passenger Car Association (CPCA).
• Austin, Texas-based Tesla sold 65,814 China-made electric vehicles in March, a jump of 85.5% year-on-year and a rise of 16.5% over February, CnEVpost reported.
• Tesla sold 35,478 vehicles in March last year in China and 56,515 vehicles in February this year.
• The Elon Musk-led company shipped only 60 vehicles in March, the report said.

Former SoftBank CEO Has 10% Of Portfolio In Bitcoin: ‘Listen To Your Kids’

• Marcelo Claure, the former chief executive officer of SoftBank Group Corp. SFTBY has allocated 10% of his personal portfolio to Bitcoin BTC/USD.
• Speaking at the Bitcoin 2022 conference in Miami, Claure said he believes Bitcoin is one of the safest ways to preserve wealth.
• “We’re starting to see Bitcoin as one of the safest ways in order for us to maintain our wealth, but more importantly, also it’s probably the only investment that exists today where the potential of gains is so much larger than the potential of an asymmetry,” he said.

Tesla Getting Into Lithium Mining Is True ‘Vertical Integration,’ Says Gene Munster

• Tesla Inc’s TSLA plans to directly mine and refine lithium at scale is a true example of vertical integration in an organization, CNBC reported on Sunday, citing Gene Munster, founder-analyst at venture capital firm Loup Ventures.
• CEO Elon Musk on Friday tweeted Tesla may directly mine and refine lithium at scale due to the rocketing prices of the metal, a key ingredient used in making electric vehicle batteries.

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