Positive US Inflation Data Lifts Global Markets

January 13, 2023

Good Morning,

Drinks makers in New Zealand are paying 17x more for Co2 than normal, tobacco companies could be accountable for cleaning up cigarette buds in South Australia, Classified documents have been found in the house of Joe Biden, FTX has recovered over $5B (USD) of assets, Credit Suisse's bonus pool may be halved in 2022, rates traders enjoyed 48pc revenue leap as 'new regime' beckons & US inflation cools again.

Let's jump in.

Before The Bell

Markets

  • Markets were broadly up globally, reacting to positive news from the US showing cooling inflation. The NZX 50 moved +0.2% higher to 11664.88, the ASX 200 gained +1.2% to 7280.40, and the Nasdaq (+1.7%), S&P 500 (+1.3%) and the Dow Jones (+0.5%) all saw increases. Naturally, as a reaction to this data, treasury bond yields fell as investors took decreased inflation as a sign that the Fed would start to ease their aggressive interest rate hikes.

Earnings and Data

Yesterday's Earnings and Data

  • Australia's trade surplus unexpectedly increased in November, as a weakening in local demand saw imports decline whilst exports remained constant (Yahoo)

  • Australian inflation came in at a 32-year high of 7.3% (AFR)

  • China's CPI in December came in 1.8% higher than a year earlier, rising 0.2% since November. PPI slowed to 0.7% in December from 1.3% in November (RT)

  • New Zealand building consents for new homes were up 3.2% YOY to 50,209 in November (Stuff)

  • PaySauce (NZX) announced it had increased its annualised recurring revenue by 54% to $6.6m (NZD), and in December, they were up 65% YOY to $1.65m (NZD). It also announced a 16% YOY increase in active customers to 6810 (NBR)

  • US CPI came in at its lowest level in more than a year at 6.5% YOY, whilst core inflation was 5.7%. It was the first negative month on price pressures since the COVID pandemic began in 2020, with CPI down 0.1% (BBG)

  • The world's ten largest banks made $US24.1 billion ($34.7 billion) in the most frequently traded currencies, known as the G-10, according to data from Coalition Greenwich. That’s a 48 per cent increase from the previous year. Only 2020 saw a better result when pandemic volatility and emergency quantitative easing pushed returns to $US26.7 billion (AFR)

Earnings and data coming up this week:

  • Friday: Unemployment claims & federal budget balance (US), trade balance (China), GDP (UK), Taiwan Semiconductor Manufacturing Company

  • Saturday: JP Morgan Chase, Bank of America, Wells Fargo, BlackRock, Citi, Delta Airlines

News Summary

  • Gisborne winegrowers are cautiously optimistic about saving this sodden season (Stuff)

  • Drinks makers in New Zealand are paying 17x more for Co2 than normal (Herald)

  • Tobacco companies could be accountable for cleaning up cigarette buds in South Australia (9 News)

  • Low-cost airline VetJet will start running flights from Melbourne to Ho Chi Minh City in April (9 News)

  • ANZ's sales and trading desk have been slapped with a $150,000 (AUD) budget for corporate travel for 2023 (AFR)

  • Global funds management group BlackRock says it is shutting down its high-conviction Australian equities team and will hire Pendal Group to manage the outstanding funds (AFR)

  • Classified documents have been found in the house of Joe Biden (BBC)

  • US airlines are hoping for a return to normal after a 90-min ground stop was forced by FAA over a computer issue that caused 10,000+ flights to be delayed and 1,300 to be cancelled (RT)

  • The US and its allies are preparing more sanctions on the Russian oil industry (WSJ)

  • The world's richest man has promoted his daughter Delphine Arnault to head of Dior (BBC)

  • FTX has recovered over $5B (USD) of assets (BBC)

  • Goldman Sachs job cuts hit investment banking and global markets hard (RT)

  • Credit Suisse's bonus pool may be halved in 2022 (RT)

Deal Flow

Investments / M&A

  • Billionaire Andrew Forrest is mulling a deal to acquire control of the struggling Sun Cable project to export solar power to Singapore via a 4,200km submarine cable. A deal could be worth $30B (AUD) (BBG)

  • According to a person familiar with the matter, Subway is exploring a potential sale that could value the sandwich chain at more than $10B (USD) (BBG)

  • The Consumers Federation of Australia has asked the Australian Consumer and Competition Commission (ACCC) to block the $4.9B (AUD) takeover because it would “materially increase the risk of coordinated conduct in a number of these markets by removing a key competitor, Suncorp Bank” (AFR)

  • Standard Chartered is considering a sale of its aircraft leasing unit, which is worth ~$3.7B (USD) (RT)

  • A unit of Apollo Future Mobility Group Ltd. will buy Chinese electric vehicle maker WM Motor Holdings Ltd. for $2.02B (USD), according to a Hong Kong stock exchange statement (BBG)

  • PAG and Mapletree Investments Pte agreed to buy an office tower in Hong Kong that was once owned by distressed tycoon Pan Sutong for HK$5.6 billion ($717m USD) (BBG)

  • According to people familiar with the matter, T-Mobile US Inc. is considering an acquisition of Mint Mobile, the budget wireless provider backed by actor Ryan Reynolds, who owns about a quarter of the company (BBG)

  • US chemical distributor Univar Solutions is drawing interest from Apollo and Platinum Equity (BBG)

  • Exxon Mobil Corp. will sell its controlling stake in Esso (Thailand) Pcl, which runs a local refinery and retailing business, to rival Bangchak Corp. as the largest US oil company focuses on its home market and the production of lower-emission fuels (BBG)

  • Activist investor Nelson Peltz nominated himself to the board of Walt Disney Co. in what could become a highly public debate over Chief Executive Officer Bob Iger’s leadership (BBG)

VC & Fundraising

  • Investment manager Blue Owl Capital raised $12.9B (USD) for its Dyal Capital Partners V fund (PRN)

  • PE firm TSG Consumer Partners raised $6B (USD) for its TSG9 fund (BW)

  • Ares Management Corp raised ~$5B (USD) for an infrastructure debt fund (RT)

  • Layer-1 blockchain Venom Foundation and investment manager Iceberg Capital launched a $1B fund to invest in pre-seed to Series A web3 / dApp startups (TC)

  • Kakao Entertainment Corp. has won $930m (USD) from the sovereign wealth funds of Saudi Arabia and Singapore, securing one of the country’s largest financing rounds at a time global investors shy away from big startup bets (BBG)

Equity Raises

  • Lottomatica, the Italian gambling company backed by Apollo Global Management Inc., is considering a Milan initial public offering this year that could raise about $1B (USD), people familiar with the matter said (BBG)

  • Sports & Health Tech Acquisition Corp, the blank-check firm backed by professional golfer Tiger Woods, dropped its plans for a $150m (USD) initial public offering (BBG)

  • Saudi property developer Umm Al Qura for Development & Construction Co is working with banks, including Lazard Ltd, on its planned Riyadh initial public offering, according to people familiar with the matter. (BBG)

  • Natural hydrogen could play an immediate and vital role in Australia’s energy grid, Gold Hydrogen chairman Alexander Downer said on the eve of the company’s listing. (AFR)

Daily Pick

  • European stocks closed higher on Thursday as soft U.S. inflation data helped outweigh concerns about interest rates. Optimism about economic growth following China's reopening also contributed to the market's positive performance. (RT)

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