Morning Brief: Top Financial Stories Dominating on Monday, May 23

CNBC

US Announces Asia Economic Deal To Strengthen Foothold, Check China

• The U.S. has announced the Indo-Pacific Economic Framework (IPEF) with Asian partners, including Australia, Japan, and the Republic of Korea, to raise its economic profile and create another counterbalance to China.
• CNBC writes that the group wants to set international rules on the digital economy, supply chains, decarbonization, and regulations applying to workers.
• Notably, the IPEF is not a free trade agreement. Biden faces political pressure from both the left and right in the United States to avoid free trade deals.

Reuters

Hyundai Motor To Invest $10B In US By 2025

• Hyundai Motor Company HYMTF said it is planning to invest $10 billion by 2025 in the United States for smart mobility solutions.
• The investment will support the development of key future businesses, including robotics, AI technologies, advanced air mobility, and autonomous driving capability.
• Hyundai had earlier disclosed a $5.54-billion plan to establish its first dedicated U.S. EV and battery manufacturing facilities in the State of Georgia.

BMW Weighs Solar, Geothermal, Hydrogen Energy Investments To Reduce Dependence On Russian Energy

• Bayerische Motoren Werke AG BMWYY explored new solar, geothermal, and hydrogen energy investments to lower its dependence on natural gas.
• BMW’s plans reflect more comprehensive preparations underway across the German industry to shift away from Russian gas and develop a system to ration available supplies in a sudden halt to deliveries.
• BMW chief saw an embargo on Russian gas would bring the industry to a standstill.

Biden Considers Lowering Tariffs On China And Pushing OPEC To Pump More Oil

• While grappled with a politically damaging wave of inflation, the U.S. President Joe Biden said he was considering slashing tariffs on Chinese goods.
• At the same time, he wants to pressure OPEC to increase oil supply, reported Reuters.
• “I am considering it. We did not impose any of those tariffs. They were imposed by the last administration, and they’re under consideration,” Biden stated on reducing tariffs on China.

General Atlantic Intends To Invest $2B In India, Southeast Asia

• A senior executive at global private equity company General Atlantic told Reuters that the firm plans to invest $2 billion in India and Southeast Asia over the next two years as lowering valuations make the region’s startups more attractive.
• According to Sandeep Naik, General Atlantic’s head of business in India and Southeast Asia, the company is in early-stage investment talks with about 15 companies in sectors like technology, financial services, retail, and consumer.
• General Atlantic is ready to ease its purse strings after investing just $190 million in Indian startups in 2021, its lowest annual figure ever, Naik said in an interview at the World Economic Forum in the Swiss ski town of Davos.

Wall Street Journal

Researchers Investigate New Treatment Pathways For Alzheimer’s After Commercial Failure Of Biogen’s Aduhelm

• The commercial failure of Biogen Inc’s BIIB drug Aduhelm has put a new focus on the research into the causes of Alzheimer’s disease.
• Aduhelm was expected as a potential blockbuster that targeted a root cause of the disease by clearing a protein known as amyloid from the brain. But research into the benefits of targeting amyloid in Alzheimer’s patients has been mixed, Wall Street Journal writes.
• Other potential causes and risk pathways that Alzheimer’s researchers are probing include dysfunctional tau metabolism and the possibility that tau buildup can spread among cells like an infection.

Bloomberg

Broadcom In Talks To Buy Cloud Computing Firm VMWare: Report

• Broadcom Inc AVGO is reportedly in discussions to take over cloud computing company VMWare Inc VMW.
• The San Jose, California-based semiconductors and infrastructure software solutions company is looking to purchase VMWare, Bloomberg reported, citing people familiar with the matter.
• VMWare denied commenting, while a Broadcom representative wasn’t available immediately, according to Bloomberg.

Financial Times

€8B European Bank Sell-Off Was Influenced By One Capital Group Fund Manager: All You Need To Know

• Capital Group portfolio manager Nick Grace caused an €8 billion sell-off of European bank stocks this year following the Ukraine crisis and global recession concerns.
• Capital had built up large, often top-five, stakes in lenders, including Barclays PLC BCS, Deutsche Bank DB, Commerzbank AG CRZBY, Societe Generale SCGLY, UniCredit, Santander, BNP Paribas BNPZY, and UBS Group AG UBS.
• Grace bet that European lenders were undervalued and traded at an unfairly steep discount to the book value of their assets and were poised to generate billions more in profits as interest rates rose, improving loan margins.

Washington Post

Abbott CEO Says ‘We’re Sorry About The Baby Formula Shortage,’ Ensures Significant Investment For Future

• Abbott Laboratories ABT Chief Executive Robert Ford apologized Saturday for his company’s role in the nationwide shortage of baby formula and promised production would ramp up again in June.
• “We’re sorry to every family we’ve let down,” Mr. Ford wrote in a Washington Post op-ed. “We are making significant investments to ensure this never happens again,” he wrote.
• In February, Abbott voluntarily recalled some of its Similac, Alimentum, and EleCare formulas manufactured in its Sturgis, Michigan plant after the FDA officials found a potentially deadly bacteria there.

Benzinga

Ford Analyst Raises Price Target By 10%: Why He Is Bullish

• Ford Motor Co F seeing strong demand for gas-powered vehicles, and its aggressive efforts to switch to electric vehicles will drive near-term and long-term price gains, respectively, for the stock, according to Tigress Financial Partner.
• The Ford Analyst: Tigress Financial analyst Ivan Feinseth has maintained a ‘buy’ rating on the Ford stock and raised the 12-month target price by 10% to $22.
• The Ford Thesis: Feinseth said demand for Ford’s F-series trucks, SUV models and the relaunched Bronco series is on a strong footing even as it ramps up production of its EV models, including Mustang Mach-E, E-Transit, and F-150 Lightning.

Why This Analyst Thinks Nio Stock Is Going To Recover

• Nio Inc NIO shares are likely to bounce from the recent fall, TipRanks.com reported on Sunday, citing Mizuho Securities analyst Vijay Rakesh.
• Mizuho analyst has maintained a “buy” rating on Nio and kept the price target of $60 on the stock.
• Nio shares closed 1.4% lower at $16.4 on Friday and are down 51% year-to-date.

Bill Gates On Why He Doesn’t Own Any Cryptocurrency

• Microsoft Corporation MSFT founder Bill Gates has said he doesn’t own any cryptocurrency because he prefers to invest in things that have “valuable output.”
• Over the weekend, Gates responded to a number of questions from users across the world on a Reddit “ask me anything” thread.
• In response to one particular question about his thoughts on Bitcoin BTC/USD and other cryptocurrencies, Gates explained why he doesn’t own any form of digital currency.

President Biden Has This...Really Short...Message For Kim Jong-Un

• Joe Biden had a brief message for North Korean Supreme Leader Kim Jong Un, whose nuclear saber-rattling has risked overshadowing the U.S. President’s first official Asia trip.
• What Happened: When reporters asked Biden what message he had for Kim on his last day in South Korea on Saturday, the U.S. President said, “Hello... period.”
• “We are prepared for anything North Korea does. We’ve had — thought through how we’re going to respond to whatever they do.”

Pfizer-BioNTech’s Third COVID-19 Vaccine Shot Shows 80% Efficacy In Youngest Children

• Pfizer Inc PFE and BioNTech SE’s BNTX COVID-19 vaccine elicited a robust immune response, with a favorable safety profile similar to a placebo.
• The Phase 2/3 trial evaluated the third 3-µg dose of its COVID-19 vaccine in children from six months to less than five years.
• Vaccine efficacy, a secondary endpoint in this trial, was 80.3% in the youngest group.

Elon Musk’s SpaceX Seeks Higher Valuation In $1.7B Funding Round Amid Sexual Harassment Allegations

• Tesla Inc TSLA CEO Elon Musk-owned SpaceX is looking to raise $1.725 billion in new capital that could lift the private space firm’s valuation to $127 billion, CNBC reported on Sunday, citing a company-wide email.
• SpaceX is looking to raise fresh funds at $70 per share, a 25% jump in valuation after SpaceX split its stock price 10-for-1 in February, bringing the common stock valuation to $56 a share.
• Austin, Texas-based SpaceX is also conducting a secondary sale to company insiders and existing shareholders for up to $750 million in common stock. Secondary share sales provide liquidity to existing investors.

As Coinbase Dips 80% Since Going Public, Co-Founder Laps Up $75M Shares

• Coinbase Global Inc COIN co-founder Fred Erhsam has been buying the dip in shares of the cryptocurrency exchange, as per a recent regulatory filing.
• A Form 4 filing with the U.S. Securities and Exchange Commission (SEC) shows Ehrsam acquired more than a million shares of Coinbase worth $75 million over the past week.
• The Coinbase co-founder made the purchases through his venture capital firm Paradigm, where he serves as a managing partner.

Tesla Said To Have Introduced A Second Shift At This Gigafactory

• Tesla Inc TSLA has introduced a second shift at its Giga Berlin factory last Friday, electric vehicle news website Tesmanian.com reported, citing people familiar with the matter.
• The second shift at the recently opened factory will help lift production amid the growing demand for Tesla vehicles.
• Giga Berlin opened on March 22 and is Tesla’s first big factory in Europe. Production at the factory has ramped up slower than expected due to “disruption in the supply of components from China”, although the situation is beginning to improve, the report said.

Biden Says Monkeypox Could Be ‘Consequential,’ Something ‘Everybody Should Be Concerned About’

• As a growing number of monkeypox cases are being reported in the U.S. and Europe, President Joe Biden on Sunday said that the outbreak should concern “everybody.”
• The president made the remarks to reporters in South Korea before boarding Air Force One en route to Japan. He said scientists are studying the disease to determine the best course of action, “we’re working on it, hard to figure out what we do and what vaccine, if any, may be available for it.”
• Biden added that if monkeypox continues to spread, the impact would be “consequential.”

Photo via Wikimedia Commons