Sometimes, there’s just too much news to sift through. So, every week we round up some of the biggest financial news clips to keep you in the loop.
This week, we have stories on:
- An unlikely partnership between Tesla and Ford
- Office vacancy rates in US cities are at the highest level recorded
- JP Morgan cuts hundreds of jobs
- Progress on US debt ceiling talks
- US – China hold trade talks
Ford and Tesla partner on EV chargers.
Ford Motor will partner with Tesla on battery charging for its current and future electric vehicles in an unusual tie-up between the two rivals.
Under the agreement, current Ford owners will be granted access to more than 12,000 Tesla Superchargers across the U.S. and Canada, starting early next year, via the use of an adapter.
And, Ford’s next-generation of EVs — expected by mid-decade — will include Tesla’s charging plug, allowing owners of Ford vehicles to charge at Tesla Superchargers without an adapter, making Ford among the first automakers to explicitly tie into the network.
Office vacancy rates in U.S. cities are at the highest level on record.
In the first quarter of 2023, the vacancy rate in U.S. metropolitan offices reached 19%. According to a JP Morgan analysis, this is the highest number ever recorded and substantially greater than the amount of vacant offices during the financial crisis.
Companies now require less office space for employees because to the growing trend of remote work.
According to JPMorgan, 59% of Regions’ non-owner-occupied commercial real estate and 50% of Bank of America’s office portfolio will reach maturity by 2024. However, both businesses’ portfolios contain a sizable proportion of the more desired class-A buildings.
Delinquency rates have increased as unoccupied offices have a negative impact on the value of offices. What will happen to the loans that are coming due this year and the following has been a major concern.
Treasury updates X date, says it has enough reserves until June 5.
Janet Yellen, the Treasury Secretary, stated on Friday that the country’s financial resources would probably be sufficient to delay a potential debt default until June 5.
“We now estimate that Treasury will have insufficient resources to satisfy the government’s obligations if Congress has not raised or suspended the debt limit by June 5,” Yellen wrote in a letter to House Speaker Kevin McCarthy.
The new deadline on Friday provided much-needed breathing room for the White House and congressional Republicans as they appeared to be close to reaching a compromise agreement to raise the debt ceiling for two years.
On May 1, Yellen told Congress that the country had enough cash on hand to pay its debts through “early June, and potentially as early as June 1,” when the so-called “X date” was last updated.
US debt ceiling talks progress, as hopes of a possible deal mount.
The world’s largest economy’s fiscal standoff may soon come to an end thanks to President Joe Biden and Republican House Speaker Kevin McCarthy’s progress towards a two-year agreement to curb government spending and avoid a US debt default.
Negotiators are trying to reach a conclusion on an agreement that would save the US from defaulting on its debts before the alleged June 1st deadline.
The White House and Republicans on Capitol Hill both asserted on Thursday that the negotiations were going better, despite the fact that nothing had been finalized.
Sending a solution to Biden for his signature would still need potentially nerve-wracking votes in a sharply divided Congress, which may extend the uncertainty surrounding the US’s budgetary situation well into the next week.
Markets now expecting Fed rate hike in June.
Markets raised their bets for a June rate hike from the Federal Reserve following hotter-than-expected inflation data Friday morning.
Odds for a quarter percentage point increase jumped to 56%, according to CME Group data. That followed a report showing that personal consumption expenditure prices rose 0.4% in April and 4.7% from a year ago.
The chances of an increase were just 17% a week ago. The probability of a hike by no later than July rose to 75%.
US-China hold trade talks despite frosty relationship.
The top trade official for the US, and China’s commerce minister had discussions about economic and trade problems as the latest indication of hesitant attempts to normalize relations between the two global economic heavyweights.
On Friday, Chinese Commerce Minister Wang Wentao and US Trade Representative Katherine Tai had a discussion outside of an APEX meeting in Detroit.
According to a statement from her office, she expressed concern about Beijing’s treatment of US companies as well as its “non-market” approach to the economy and trade policy.
The meeting took place five days after the US president forecast an imminent “thaw” in relations at the end of the G7 summit. It also came a day after Wang held talks with US commerce secretary Gina Raimondo, in the first visit by a senior Chinese official to the US capital since 2020.
Nvidia shares pop 24%, approaches $1 trillion market capitalization.
Nvidia shares closed up 24% on Thursday, pushing the company’s valuation close to $1 trillion market cap. Sales for Nvidia’s data center division came in at $4.28 billion, 14% higher than forecasts of $3.9 billion.
For the current quarter, Nvidia projected sales of around $11 billion, plus or minus 2%, which is more than 50% more than Wall Street expectations of $7.15 billion. The stock’s AI buzz was transformed into actual outcomes by that forecast, which astounded Wall Street.
Nvidia CEO Jensen Huang said the company was seeing “surging demand” for its data center products and graphics processors that power artificial intelligence applications like the ones at Google, Microsoft, and ChatGPT maker OpenAI.
Based on Thursday’s performance, Nvidia’s market cap currently stands at $950bn. If it hits the milestone, Nvidia would become the fifth publicly traded U.S. company to be currently worth $1 trillion. Apple created the club in 2018. Microsoft, Alphabet, and Amazon also now hold the distinction.
Ron DeSantis Launches Presidential Bid on Twitter.
Ron DeSantis, the governor of Florida, finally kicked-off his campaign for the Republican presidential ticket in the forthcoming 2024 elections, but his campaign start was plagued by technical challenges on Twitter.
DeSantis chose to appear at an audio-only Twitter Spaces event with Musk and moderator David Sacks. In between the glitches, the Governor declared his intention to run for the White House.
He also used the occasion to talk about his leadership style with Florida, his “anti-woke” political views exemplified by his protracted conflict with the Walt Disney Company, and the need to “revitalize” America.
Mr. DeSantis had to quickly leave the event to take part in a more traditional televised interview with Fox News because of technical issues that frequently caused audio to be lost.
JPMorgan cuts hundreds of jobs.
JPMorgan Chase slashed 500 positions, mainly in its operations and technology division. Less than 1% of JP Morgan’s total workforce was let go as a result of the firings, which came as Wall Street looks to fill approximately 13,000 vacant positions.
JP Morgan has 296,877 workers as of March 31, which was an 8% increase from the same time last year. About 85% of the roughly 7,000 employees of First Republic were given job offers this week by the bank.
Photo by Toa Heftiba on Unsplash