Financial News Roundup: Week of April 17th, 2023

By Chika


Last Updated: April 20, 2023


Investors seem to have regained their appetite for risk as inflation shows signs of cooling off.

Cryptocurrencies are hitting new highs since a year ago, with Bitcoin and Ethereum nearing 100% gains so far this year. 

Despite the recent bank runs, Wall Street banks have been able to hold their own, while Musk begins to transform Twitter into an 'everything app'. 

Here are some of investment topics that made headlines this week.  



Inflation shows signs of cooling.

The Producer Price Index (PPI) data for March shows that inflation is moderating, sending a strong signal that consumer prices will continue to fall.

The annualized rate of core CPI (Consumer Price Index) inflation has remained at 5.1% over the past three months and 4.6% over the past six months. 

This is the lowest level of inflation since June 2022, when it peaked at 9.1%, but it is still significantly higher than the Fed's 2% target. 

More than 80% of investors believe the Fed will raise rates by 0.25 percentage points at its next meeting in May, as opposed to leaving them unchanged.


Wall Street banks beat earnings expectations.

JPMorgan Chase, Citigroup, and Wells Fargo reported record-breaking earnings for the first three months of the year on Friday, surpassing Wall Street projections by billions.

Even as they warned that the economy was in jeopardy and credit could become scarce, the banks stated they'd continue to make loans and anticipated greater profits if interest rates continued to climb.  

Results indicate that last month's turmoil in the US banking sector had little immediate impact on the profitability of the nation's largest banks.


Elon Musk Creates New Artificial Intelligence Company X.AI

Elon Musk has created a new artificial intelligence company called X.AI Corp. that is incorporated in Nevada, according to a state filing.

Mr. Musk is the only listed director of the company, and Jared Birchall, the director of Mr. Musk’s family office, is its secretary. 

Mr. Musk has spent the last few months hiring researchers to create a rival to OpenAI, a company he helped start about 8 years ago. He left OpenAI early in 2018 after losing a power tussle to its current CEO.

The billionaire has sometimes worried about the dangers of AI and pushed for the government to control it. Musk has said that ChatGPT is biased politically, and he has told associates that he wants to make AI models that look for more truth. 

Late last month, Mr. Musk joined other tech leaders and AI researchers in asking for at least a six-month pause on developments in advanced AI technology. Those in favor of the pause say that it would give the industry time to set safety standards for their design and avoid any potential harms.



Twitter slowly turns into 'everything app', changes name to X.

Twitter Inc. has told the courts that it has a new company name in a new state: X Corp., an entity incorporated in Nevada instead of Twitter’s previous domicile in Delaware.

In an interview with the British Broadcasting Corp. (BBC), Musk said the name change was part of his goal to create an everything app which in his words: “Twitter is an accelerant.”

The public is beginning to see the first signs of this shift. Twitter’s users can now trade stocks, cryptocurrency and other financial assets through a partnership with eToro, an online brokerage. 



Amazon launches AI service.

Amazon is releasing a cloud service called Bedrock that developers can use to add text-generating AI systems to their software. This is similar to the engine that powers the popular ChatGPT robot, which is made by the company OpenAI, backed by Microsoft.

The announcement shows that the biggest cloud infrastructure provider isn't leaving a fast developing niche to competitors like Google and Microsoft, which have both started giving developers access to large language models. 

Amazon, however has not indicated how much the Bedrock service costs, as service is just starting a limited test. 



Investors trapped in Canadian ETFs after trading ban.

Investors in a suite of Canadian Exchange Traded Funds (ETFs) face being trapped for an extended period after regulators imposed an “indefinite” trading ban on the funds.

11 ETFs have been suspended from trading on both the primary and secondary markets. This, because their underwriter, Emerge Canada, failed to submit audited financial statements by the March 31st deadline.

The Ontario Securities Commission's "cease trade order" means that the creation and redemption of shares in the funds have been suspended, and that existing investors cannot sell their units on the secondary market.



Trump made some handsome cash selling NFTs.

Former President Donald Trump has made between $100,001 and $1 million in income from NFTs, according to his 2022 financial disclosure form.

In December, Trump released the rollout of the $99 cards— a series of digital “trading cards” as a major announcement. The NFTs which featured cartoon drawings of him in various heroic postures and outfits attracted ridicule from his allies. 

One card, for instance, shows him in a space suit wearing sunglasses, while another depicted him as a superhero shooting lasers from his eyes. However, the series of 45,000 NFTs sold out in less than a day.



Ether rises above $2,000 after the Shanghai upgrade.

The price of Ether surpassed $2,000 on Thursday for the first time in eight months, as investors put to rest their concerns regarding the long-awaited Shanghai upgrade. Ether reached $2,112.50 in value. 

In the weeks preceding the Shanghai upgrade, also known as "Shapella," investors were optimistic, but cautious.

Despite widespread agreement that the upgrade is beneficial for Ethereum in the long run – because it provides more liquidity to Ether investors and stakeholders and could be a catalyst for a change in institutional participation – there was more uncertainty about how it will impact the price.


Bitcoin surges past $30k.

Bitcoin surpassed $30,000 for the first price since June 10, 2022, as March's banking turmoil receded and investors grew more optimistic regarding U.S. central bank monetary policy.

Bitcoin's price, which had been hovering around $20,000, began to rise when news of the collapse of the technology-focused Silicon Valley Bank in the United States emerged. Since then, Bitcoin's price has rebounded sharply and increased by nearly 80% this year.


Killer of Cash App founder arrested.

Nima Momeni, 38, has been detained and charged with homicide by San Francisco police late last week (Thursday). Prosecutors allege that Nima Momeni fatally stabbed Cash App founder Bob Lee after the duo departed the flat where Mr. Momeni's sister resided. 

Prosecutors refused to comment on what transpired in the flat, but a court filing revealed that the two men had discussed the suspected killer's sister earlier in the day and that Mr. Momeni was furious with Mr. Lee.


Europe’s commercial real estate sector could be the next to fall.

Some investors are speculating that Europe's commercial real estate market may be the next sector to implode, following the recent bank runs.

Concerns have been raised about a so-called doom cycle, in which a potential bank run could precipitate a decline in the real estate market. According to data from Morningstar Direct, European funds invested directly in real estate experienced outflows of £172 million ($215.4 million) in February. 

Citi analysts anticipate a 20%-40% decline in European real estate securities between 2023 and 2024 due to the impact of rising interest rates. In the worst-case scenario, the higher-risk commercial real estate sector could decline by 50% by the end of the year.

Photo by Pixabay


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