US banks exceed Q1 expectations

8th April 2023 – 14th April 2023 | Another week in the markets

S&P 500	Nasdaq	VIX	DJIA	Russell 1000	NYSE
4,137.64	12,123.47	17.07	33,886.47	2,264.94	15,601.78
0.79%	0.29%	-7.23%	1.20%	0.85%	1.45%
Nifty 50	Gold	Silver	Brent crude	USD-INR	EUR-INR
17,828.00	$2,017.60	$25.47	$86.63	81.85	89.98
1.30%	-0.30%	1.33%	1.77%	-0.04%	0.76%

Source: MarketWatch 

Hello Saturday,

This week, Amazon joins the generative AI race with Bedrock, US banks report better-than-expected first-quarter earnings, and retail sales decline. 

• Italian energy giant Enel announces a plan to add more than 10,000 electric vehicle chargers in the US by 2030 and apply for subsidies for the same provided by the Biden administration. 
• Amazon Web Services (AWS) launches Bedrock to allow companies to train and run their own generative AI in an affordable and simple manner. 
• Protestors storm LVMH headquarters in France to oppose President Emmanuel Macron’s proposal to increase the retirement age. This comes a day after LVMH’s stock reaches an all-time high. 
• Twitter no longer exists on paper. Court filings show the social media platform merged with Elon Musk’s newly formed company X Corp, feeding speculation about Musk’s “everything app”. 
• Canadian mining company Teck Resources plans to split into two separate business units. Meanwhile, Glencore PLC offers a takeover deal, which Teck doesn’t seem to be open to. 

Taking stock | Taking charge | B2Bedrock AI | Hooey Vuitton | Xtinct? | Minesweeper | Invest wisely

Taking stock

All major indices notched a positive week. The S&P 500 rose 0.79%, Nasdaq added 0.29%, and the Dow climbed 1.2%. The US earnings reporting season got off to a good start with upbeat earnings from mega banks that eased some of the fears about the state of the banking sector. Wells Fargo, JPMorgan Chase, Citigroup, and BlackRock reported better-than-expected first-quarter profits. A weak retail sales report offset some of the enthusiasm about the strong corporate earnings — consumer spending in March fell by 1%, twice as much as expected. 

Taking charge

Enel, the Italian energy giant, shared its plans this week to add over 10,000 DC electric vehicle chargers in the US and over 2 million overall across North America by 2030. This comes at a time when the Biden administration is doubling down on its efforts to promote greener cars. President Biden has pledged to build a network of about 500,000 public EV chargers across the country by 2030, for which $7.5 billion in federal funds have been allocated. There are about 140,000 public EV chargers across 53,000 charging stations in the US at present. Enel plans to apply for the subsidies offered by the US government to companies to help build the required infrastructure. 

Source: World Economic Forum

B2Bedrock AI

On Thursday, Amazon’s cloud computing division, Amazon Web Services (AWS), joined Google and Microsoft in the generative AI race by launching a cloud service called Bedrock. But it is taking a different approach. Instead of launching its own consumer-facing AI chatbot, Amazon’s Bedrock will allow businesses to build and scale their own generative AI applications with Foundation Models (FMs). 

FMs are the core AI technologies that understand and generate human language –– for instance, responding to queries in a conversational manner like ChatGPT. And Amazon’s Bedrock service will allow consumers to choose from a wide range of FMs. This includes Amazon’s proprietary FMs known as Amazon Titan and FMs built by leading AI startups like AI2I Labs and Anthropic. 

According to Amazon CEO Andy Jassy, the company is investing heavily in AI to enhance user experience across consumer, seller, brand, and creator experiences. As for Bedrock, the goal is to offer companies cost-effective machine learning chips to customise, train, and run their own AI.

Hooey Vuitton

Protestors stormed the headquarters of the French luxury conglomerate LVMH on Thursday, a day after the company’s shares hit an all-time high. Nationwide protests have been going on in France for weeks opposing President Macron’s plan to increase the retirement age from 62 to 64. On Wednesday, LVMH released its first-quarter results that showed a 17% increase in sales from a year earlier, which pushed its stock price to $965. 

A French union leader and protestor told CNN that the president should come to LVMH if he needs funding to finance the overhauled pension system. Protestors in cases like these tend to choose locations and companies they see as capitalist symbols, and LVMH fits the bill. Think of some of the most popular luxury brands in the world — Louis Vuitton, Christian Dior,  Fendi, Tiffany & Co., Bulgari, Sephora — they are all owned by LVMH. Bernard Arnault, the CEO of LVMH, surpassed Elon Musk as the world’s richest person at the beginning of 2023, and according to recent estimates, his net worth is around $233 billion. 

Whether or not you want to have items of this luxury giant in your closet, you should consider having its stock in your investment portfolio. With a well-diversified portfolio of about 60 brands across fashion, cosmetics, watches, jewellery, perfumes, and wines, LVMH is only growing stronger despite the uncertain economic climate. 

Xtinct?

Twitter no longer exists — as a legal entity, anyway. Court filings from a case related to journalist Laura Loomer revealed that Twitter was merged with Elon Musk’s newly formed X Corp, established on March 9 and no longer exists on paper. Musk responded to the news of this corporate reshuffle with a cryptic one-letter Tweet ‘X’. 

This news further feeds speculation about Musk’s “everything app”, similar to China’s WeChat. Musk has expressed an interest in creating a super app like WeChat that offers everything, including messaging, payments, and streaming. As of now, he has been tight-lipped about his plans, and it’s unclear whether he plans to turn the social media app into X or use it to build an entirely new one. 

Minesweeper

In February, Canadian miner Teck Resources Ltd. announced its plans to split into two companies later this year –– one, Elk Valley Resources (EVR), for its metallurgical coal assets, and the other Teck Metals, for its copper and zinc mines. Last week, however, Glencore PLC, a huge commodity firm based in Switzerland, proposed a merger between it and Teck. According to this proposal, not only would Teck split into two entities as planned, but Glencore too would follow suit and split into two.

With this deal proposed by Glencore, Teck has two options — to go ahead with its planned split or to accept Glencore’s takeover deal. This Monday, however, Teck reiterated its opposition to this deal, stating that the proposal carries risks ranging from execution to ESG as well as structural flaws. The company does seem to be open to takeover offers either from Glencore or other mining companies once the split is complete.

Invest wisely 

Looking to add investments like the biggest global luxury company LVMH to your portfolio? You can do so by investing in ADRs as well as well-diversified exchange-traded funds listed in the US stock market through Appreciate. Download the app today to access a wide range of high-performing stocks and ETFs in an easy and affordable manner.

Warm regards,
Another week
in the markets