FT : Israel and Hamas clash threatens to spiral into ‘all-out war’, UN warns

Israel and Hamas clash threatens to spiral into ‘all-out war’, UN warns
Dozens killed after rockets fired deep into Jewish state while Israel bombs Gaza City

Hamas and Israel kept up a deadly barrage of rocket launches and air strikes on Tuesday night with a UN envoy warning that the conflict risked spiralling into “all-out war”. 

Israeli air strikes toppled two high-rise buildings that it said were used by Hamas in Gaza City, prompting furious retaliatory launches of hundreds of rockets at big Israeli cities.

Tel Aviv was targeted at least four times and explosions were heard all around central Israel, as the country’s Iron Dome defence shield fired volleys of interceptor missiles.

At least five people had been killed in Israel, medics said. In Gaza, at least 35 people died, including 10 children, and more than 200 were injured, according to the territory’s health ministry. A doctor at Shifa Hospital said they were overrun by wounded. “Many more will die tonight,” he said.

Tor Wennesland, the UN Special Co-ordinator for the Middle East Peace Process, warned that the aerial hostilities were “escalating towards an all-out war”.

Widespread unrest broke out among Arab populations in Israeli cities, and Israel moved a police battalion from the occupied West Bank to buttress local forces.

The offensive began when Hamas fired rockets on Monday evening towards Jerusalem, where hundreds of Palestinian protesters had been injured by Israeli police at al-Aqsa mosque, Islam’s third holiest shrine. The three days of stand-offs coincided with Ramadan.

But the intensity of the counter-strikes rose dramatically after Benjamin Netanyahu, Israeli prime minister, ordered an expansion of the country’s air campaign in the Gaza Strip on Tuesday. Israel completed dozens of bombing runs targeting rocket launching pads and military commanders. “Hamas will receive blows here that it did not expect,” he said.

Hamas responded with its first volley of rockets towards Tel Aviv. It said it launched as many as 130 rockets simultaneously in a possible attempt to overwhelm the Israeli air defences.

Benny Gantz, Israeli defence minister, who has ordered 5,000 reserve troops back to duty, said that Israel’s air campaign would continue until “its operational goals are met”.

Israel has fought three all-out wars with Hamas, the militant group that took control of the Gaza Strip in 2007. But the two foes have also engaged in multiple bouts of hostilities that have stopped short of war, with mediators such as Egypt and Qatar hammering out truces.


Israel has killed at least 20 Hamas and Palestinian Islamic Jihad militants, according to the Israel Defense Forces. With Israel carrying out complex manoeuvres, it warned that civilian casualties were likely.

“Some of the [rocket] firing pits are embedded within the civilian population and it cannot be ruled out that there will be civilian casualties,” it said.

Hamas fired its first volley after Israeli police on Monday cleared Jerusalem’s al-Aqsa mosque, a holy site for Muslims and Jews. The operation injured hundreds of Muslim protesters after police fired tear gas, stun grenades and rubber bullets.

Jen Psaki, White House spokesperson, said President Joe Biden, had been receiving updates from his national security team and that his primary focus was on de-escalation.

In a sign of rising tensions, riots broke out in several Israeli towns including Lod, Ramle and Jaffa — each with large Arab-Israeli populations.

Netanyahu moved border police battalions from the occupied West Bank to Lod, near Tel Aviv, after the mayor of the town of 80,000 people said the riots there “were too large for the police”.

Police said a patrol car had been set on fire after large crowds attended the funeral of an Arab man allegedly killed by a Jewish resident. Haaretz newspaper reported that two synagogues and a Jewish school had been burnt.

“This is a giant incident — an intifada [uprising] of Arab Israelis,” Yair Revivo, Lod’s mayor, said on television.

Tensions had already risen as a court case regarding the evictions of the Arabs coincided with an annual Israeli celebration that began on Sunday called Jerusalem Day, when Israelis celebrate their conquest of Arab East Jerusalem in 1967. The hearing has been postponed.

WSJ : Xi Jinping’s Achilles Heel

Xi Jinping’s Achilles Heel
China’s birth dearth is becoming more acute as its population ages.

President Xi Jinping has made no secret of his ambition to make China the dominant global power of the 21st century. But the latest Chinese census reveals a major vulnerability: What if the Middle Kingdom doesn’t have enough young people?

After some delay China finally released its census results Tuesday. Though the population grew a little last year—to 1.412 billion in 2020 from 1.4 billion—the more salient fact is that its population continues to gray as Chinese women are having fewer babies. The proportion of people 60 or older increased to 18.7% of the population (from 13.3% in 2010), even as it recorded the lowest number of annual births (12 million) since 1961.

Beijing has seen this coming. In 2016 Chinese couples were allowed to have two children instead of one, reversing a policy in place for 35 years. Last month the People’s Bank of China recommended the government abandon its population control policies if it hopes to compete with America, but even that may be too late. Once fertility falls, the trend is hard to reverse no matter what incentives governments offer.

Many governments have tried, and some believe that Poland or Hungary (which now spends nearly 5% of its GDP to encourage its citizens to have more children) may have the answer. But generally these policies have either failed outright, or shown at best modest fertility gains.

The social and economic implications are enormous, involving everything from the dynamics of the Chinese family to the growing demands on China’s already stressed and underfunded health and pension programs. In March the government announced it will gradually raise the retirement age from 60 today, no doubt in expectation of these results. The retirement costs would be difficult in any country, but China hasn’t achieved broad prosperity beyond its coast and major cities.

Other nations also face graying populations and a declining total fertility rate, which is the average number of children per woman. The Japanese, Singaporeans and South Koreans are wealthier than the Chinese but have, respectively, total fertility rates of 1.36, 1.1 and 0.9. Europe’s overall is 1.522. The U.S. rate is 1.7, while China’s is 1.3.

The trend confirms that Beijing’s often brutal family planning interventions have left China with a demographic time bomb. We should also acknowledge that the ruling Communists were often encouraged by Westerners in the 1960s and 1970s who feared the world would soon be overpopulated.

Now the demographic bill is coming due. Mr. Xi may believe the U.S. is in decline. But he may learn that the greatest obstacle to his ambition to replace the U.S. as global leader doesn’t come from abroad. It is the aging Chinese population that is a legacy of his Communist Party predecessors.

FT : Shift to electric vehicles poses threat to US union jobs

Shift to electric vehicles poses threat to US union jobs
United Auto Workers frets over prospect of fewer jobs and a non-unionised supply chain

On the outskirts of Normal, Illinois, sits a factory that exemplifies the challenges facing the US labour movement as the car industry steers toward electrification.

A former Mitsubishi plant, next month electric vehicle start-up Rivian will begin manufacturing pick-up trucks and sport utility vehicles there. It will employ 1,800 by next month, with plans to scale up to 2,500 by the end of the year.

Mitsubishi closed the plant in 2015, laying off a unionised workforce that was 4,000 strong at its peak around the turn of the century. Rivian bought the factory for $16m from a liquidator and will be launching its first products from there.

But the factory, even though it employs some of the same workers, is no longer a union shop, and the situation in Normal illustrates the changing dynamics in the US car industry.

Electric vehicles are recognised as the undisputed future of the industry. Ford and General Motors are pouring billions into plans to build EVs as they compete against Tesla, which has become the dominant US electric vehicle maker.

The US car industry is foundational to American manufacturing, employing nearly 390,000 at vehicle manufacturers and another 539,000 in the supply chain.

But electric vehicles raise the possibility of job losses for assembly workers and the automotive supply chain. EVs require fewer components overall, which means they require fewer people to make the parts and assemble the vehicles.

Moreover, fewer of the jobs in EVs are likely to be union jobs, which tend to offer workers better pay and benefits. Rivian and Tesla are not unionised, nor are many businesses in the EV supply chain.

A 2020 report from the left-leaning Economic Policy Institute found that unionised workers earned 11.2 per cent more than non-unionised peers. Membership of the United Auto Workers union has declined since hitting a high of 1.5m in 1979, and real wages for car workers have declined 17 per cent since 1990, according to the US Bureau of Labor Statistics. The union still represents 400,000 workers, but a 2018 research study from the UAW said as many as 35,000 of those union jobs could go as a result of the transition to EVs.

“When you look at the fact that you need fewer people . . . and the supply chain involves more non-union employers, you have significant potential job loss,” said Marick Masters, a professor of business at Wayne State University in Detroit.

Rivian declined to comment on unionisation at the Illinois plant. The UAW said in January 2020 that it looked forward “to these jobs returning and UAW members having the opportunity once again to organise”, but Normal’s mayor Chris Koos said he did not think any discussions had yet occurred between Rivian and the UAW.

“Personally, I’m a believer in unions,” Koos said. “They bring a lot to the table . . . But in terms of this situation, that’s a decision between Rivian and the workforce.”


While UAW president Rory Gamble has said the need to organise workers at the new electric carmakers is “a given”, it will not be an easy task.

Workers at Tesla’s plant in Fremont, California have been attempting for a long time to organise through the UAW. More than three years ago, Elon Musk’s company fired Richard Ortiz, who had passed out pro-union leaflets in the plant’s parking lot, and only this year did the US National Labor Relations Board rule that his dismissal was illegal. The board ordered Tesla to rehire him with back pay.

Tesla also broke the law when it barred employees from speaking to reporters, retaliated against another union activist and engaged in “coercively interrogating” other supporters, the board said.

It also criticised Musk directly, saying a tweet he sent in May 2018 constituted an illegal threat to the remuneration of workers who were considering unionising. Musk wrote that workers could unionise if they wanted to, “but why pay union dues & give up stock options for nothing?”

He was ordered to the delete the tweet. As of May 7, it remained online.

Koos said that in conversations with Rivian executives, Tesla’s seemed more open to a unionised workforce.

A bigger hurdle may be the shifting supply chain. Decades ago the UAW used its relationships with Ford, GM and Chrysler to unionise suppliers. Now, the biggest battery makers, Panasonic and LG Chem, are located in Asia, and EV suppliers in the US are less likely to be unionised.

GM and a unit of LG Chem have a joint venture that is building factories in Ohio and Tennessee. The Ohio plant will not initially be unionised. When GM announced the Tennessee plant last month, the UAW said the carmaker had “a moral obligation . . . to make sure these are good paying union jobs like those of their brothers and sisters who make internal combustion engines”.

“The UAW is going to have to be very aggressive in trying to organise those facilities,” Masters said. “Right now, it’s being more reactive than proactive . . . They have to look at the whole auto production parts picture and say, ‘What parts don’t we have organised?’ and go after those.”

The UAW said the shift to EVs presents an opportunity to create high-quality manufacturing jobs, but the US will need “a strong, forward-looking industrial policy” to get there.

The union is lobbying for policies that would include retraining for displaced workers, creating “quality jobs” in the buildout of a nationwide EV charging infrastructure and trade protections for “advanced vehicle technology”.

It also wants to change current legislation so that consumer subsidies will only apply to electric vehicles assembled in the US. The federal government subsidises EV purchases to stimulate demand for a product that currently comprises 2 per cent of the US car market. Joe Biden’s administration has not so far commented on the idea, though, and it faces uncertain prospects in Congress.

Meanwhile, the UAW has praised decisions by US carmakers to invest in US factories for EV technologies and criticised decisions to steer work away from the US workforce.

For example, Ford said last month it planned to open a new battery R&D facility in Michigan, which the union said would “position Ford and UAW members and families to prosper for decades to come”.

Later the same week, GM announced a $1bn investment to build electric vehicles in Mexico. UAW vice-president Terry Dittes called that “a slap in the face” to union members and US taxpayers.

“We have to make sure we’re attaching government funding to labour standards and making sure the work’s in the US,” UAW legislative director Josh Nassar testified on May 5 to a US House subcommittee. “If we do not . . . there’s no assurance the auto jobs of the future are going to be the good jobs we’re accustomed to.”

FT : Drinks maker Moët Hennessy predicts liquor ‘renaissance’

Drinks maker Moët Hennessy predicts liquor ‘renaissance’
Consumers trading up to more expensive brands in reopened countries, says French company

Wine and spirits maker Moët Hennessy is anticipating a “post-Covid renaissance” as consumers flock to newly reopened bars and restaurants and splash out on pricier brands on a quest for celebration.

“People are clearly trading up,” said Philippe Schaus, chief executive of the LVMH-owned company.

The outlook was similar in countries where some pandemic-related restrictions were already being lifted, such as Australia, the UK and the US, and in places where they were still in effect, like Italy and France.

“Some call it the revenge of pleasure or the new Roaring ’20s, but it’s clear that people are almost desperate to enjoy food and drink again,” said Schaus

Unlike a typical economic crisis, he said many people now had money to burn because spending opportunities had been limited since the pandemic began. In some countries, government support schemes had also been generous, boosting disposable income.

In the US, this has led to a cognac boom that has left Hennessy struggling to keep up with demand and pushed the valuation of smaller cognac maker Rémy Cointreau to historic levels.

“There is purchasing power out there and it seems to be translating, not necessarily to more alcohol consumption, but better consumption, and we are benefiting from that,” he said.

As one of the biggest makers of wine and spirits globally, Moët Hennessy competes with UK-based Diageo, Pernod Ricard and Campari in Europe, and Brown Forman in the US.

The sector proved surprisingly resilient last year despite the “on trade” market of bars and restaurants being shut during lockdowns. Consumers ended up buying more wine and spirits to drink at home. After an initial slump in early 2020 as global stock markets swooned, the price-to-earnings ratios of the big spirits companies have recovered and now exceed pre-pandemic levels.

Moët Hennessy sales contracted by 15 per cent to €4.8bn last year, while operating profit fell 20 per cent to €1.4bn. But the latter figure rebounded to €1. 5bn in the first quarter of this year, 12 per cent higher than in the same period of 2019 before the pandemic.

Asked whether the company could get back to pre-crisis levels this year, Schaus declined to give such a forecast, but said he was “cautiously optimistic” and added that it would “have a good year”.

Whether the pandemic will leave lasting marks on global drinking culture remained to be seen. Some changes such as the expansion of ecommerce were not likely to disappear, said Schaus, but it was too soon to tell if there would be a wave of bankruptcies among restaurants and bars.

“I think you probably have to wait until six months to be able to know,” he said. “It is a big question everywhere. I mean, there will certainly be some form of reshuffle. On the other hand, some countries have been very generous in supporting their restaurant industries, so it really depends.”

To stoke demand this summer, the company is counting on new product launches as well as a marketing push for its rosé wine brand Le Château d’Esclans acquired last year.

It recently introduced a new sparkling wine called Chandon Garden Spritz for sale in the UK, Europe, and the US that was inspired by the enduring popularity of the Aperol Spritz cocktail. That drink, known for its deep orange colour, includes sparkling wine and bitters, so Chandon wanted to develop something with a similar taste that was ready to pour from a bottle.

Chandon’s winemakers in Argentina came up with the recipe, and it is now being rolled out globally. “It’s a very elegant drink,” said Sybille Scherer, who heads Chandon. “We hope it will fit very well with the mood of the moment.”

>>> US After Hours Summary: FUBO +25.4%, UPST +18%, U +3.8% higher on earnings;

After Hours Summary: FUBO +25.4%, UPST +18%, U +3.8% higher on earnings; SLQT -8.8%, LMND -7.8%, VZIO -5.8%, GO -5.5% lower on earnings; INTU +1.8% lowered AprQ guidance but expects to exceed FY21 guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: FUBO +25.4%, UPST +18%, SNDX +6%, OLO +5.9%, CNR +5.2%, CHK +5% (also initiates dividend), NARI +3.9%, U +3.8%, NEWT +2.6% (also increases dividend), INTU +1.8% (lowers guidance for AprQ due to IRS filing date extension, but expects to exceed high end of FY21 guidance), BIGC +1.6%, OPEN +1.5%, EA +0.9%, LPRO +0.7%, BGS +0.4% (also names new CEO), HBM +0.4%, OR +0.1%

Companies trading higher in after hours in reaction to news: CVI +11.9% (announces special dividend), SIEN +10.5% (to sell miraDry business to 1315 Capital), ABST +5.4% (to acquire NetMotion for $340 mln in cash), TDUP +3.5% (to power resale for Very Bradley through Resale-as-a-Service), DFNS +1.8% (IronNet named manufacturer on ITES-SW2 contract), ANAT +1.2% (issues response to recent media reports), SRRK +1.1% (announces publication of Phase 1 trial data evaluating apitemograb), OEC +0.2% (to increase prices on specialty carbon black products), RIDE +0.1% (to restate certain earnings due to SEC guidance on accounting method for warrants relating to SPACs)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: CURI -13.6% (also acquires One Day University), ARRY -11.7% (also enters into supply agreement with Nucor), SLQT -8.8%, LMND -7.8%, VZIO -5.8%, GO -5.5%, QS -3.3%, DAR -2.1%, JAMF -1.1% (also to acquire Wandera for $400 mln), KGC -0.9%, SGFY -0.1%, HLI -0.1%

Companies trading lower in after hours in reaction to news: PRAX -7.1% (stock offering), IMNM -4.3% (stock offering), AXNX -4.2% (stock offering), SPCE -1.8% (to delay its 10-Q), HYLN -1.6% (provides Q1 business update), SITC -0.9% (increases dividend), INCY -0.6% (INCY and MOR dose first patient in Phase 3 frontMIND study), MGM -0.3% (to sell MGM Springfield real estate to MGP for $400 mln in cash), GPS -0.2% (resumes share repurchase program but cuts quarterly dividend roughly in half), IVZ -0.1% (reports April AUM), APAM -0.1% (reports April AUM), ALE -0.1% (appoints CEO Bethany Owen as Chair of the Board), ALKT -0.1% (announces partial early lock-up release with respect to common shares), PQG -0.1% (to delay its 10-Q)

FT : UK regulator investigates collapsed Greensill Capital

UK regulator investigates collapsed Greensill Capital
Move revealed in documents released by MPs, which also show extent of Cameron’s lobbying on behalf of group

The UK financial regulator is “formally investigating” Greensill Capital as documents released by a parliamentary committee showed former prime minister David Cameron lobbied for the company 56 separate times last spring.

The Financial Conduct Authority disclosed the probe into the collapsed supply-chain finance group in a letter from Nikhil Rathi, the FCA chief executive, to Mel Stride, the Conservative MP who chairs the House of Commons Treasury select committee.

Greensill went into administration in March. Rathi said the FCA was co-operating with authorities in Germany, Australia, Switzerland and other countries.

The letter to Stride emerged in a release of documents by the committee. The release included a deluge of friendly messages from Cameron — who was an adviser to Greensill — to government and Whitehall figures in early 2020 imploring them to help the company. 

The documents showed how Cameron bombarded cabinet ministers and officials, including Cabinet Office minister Michael Gove, via text, WhatsApp, email and phone calls in an attempt to change the rules around Covid-19 debt schemes to the benefit of Greensill Capital.

He wanted supply-chain companies to gain access to the Bank of England’s Covid-19 debt scheme. Although that attempt failed, Greensill did go on to access £400m through another government loan scheme for its clients.

In a message to chancellor Rishi Sunak on April 3 2020, Cameron praised the chancellor: “You are doing a great job — keep going.”

The former prime minister also messaged Sir Tom Scholar, the permanent secretary at the Treasury. “See you with Rishi’s for an elbow bump or foot tap. Love Dc,” [sic] he said.

At one point he apologised to Scholar for hassling him: “One last point then I promise I will stop annoying you.” The next day, left empty-handed, he said: “Am now calling CX (Sunak), Gove, everyone.”

Lex Greensill, the company’s Australian founder, told a hearing of the Treasury committee on Monday that the withdrawal of insurance was the “ultimate” cause of the group’s demise.

The collapse of Greensill has prompted concerns about the finances of Sanjeev Gupta’s GFG, a major Greensill client which employs thousands of Liberty Steel workers in the UK.

In three hours of robust questioning by MPs, Greensill denied that he was a “fraudster” given the company’s heavy use of future receivables — lending based on revenue which does not yet exist. “At no point would I or my firm have engaged in financing receivables which we knew to be fraudulent.”

Asked what proportion of his company’s lending went to Gupta-related businesses, Greensill refused to comment on “specific clients”, citing legal advice. He said GFG was not Greensill’s biggest client but admitted: “We did have a concentration on certain customers that was too high.”

Greensill was asked how he had been brought into Whitehall in 2012 to advise the Cameron government on supply-chain finance. “I was simply trying to share my experience and give something back,” he said.

Explaining how Cameron then came to work for him in 2018, the Australian financier said the former prime minister had been a “PAYE employee” and not a director, with “less than 1 per cent” of share options in the group. At one point Greensill had a valuation of about $7bn, making Cameron’s stake worth up to $70m.

Cameron had a “standing invitation” to Greensill board meetings and regularly attended, he said.

Greensill added that the company bought four private jets because it was “an efficient way of getting around”.

The Treasury told the committee of MPs in a separate submission that it had conducted a detailed assessment of Greensill’s proposal and concluded it did not provide value for money. 

Cameron is scheduled to appear before the Treasury select committee on Thursday.

FT : Daimler to ‘pick up speed’ in electric car transition

Daimler to ‘pick up speed’ in electric car transition
‘Market dynamics’ and regulatory pressure could make economic case for more rapid switch, says chief executive

Daimler will probably phase out combustion engine cars before its internal target of 2039 thanks to increasing demand for the German carmaker’s electric Mercedes models, says chief executive Ola Källenius.

“Do we intend to pick up speed? Yes, we do,” the Swedish boss told the FT’s Future of the Car Summit. The transformation into a zero-emission company, he added, was “going to be faster, and probably that 2039 scenario is the most conservative scenario that we are looking at in the different plans we are discussing”.

The Stuttgart-based group set a goal in 2019 of offering a completely carbon-neutral new car range within 20 years, but competitors including General Motors and Ford have since unveiled more ambitious targets.

In February, Daimler told investors that it would not prematurely phase out sales of petrol and diesel vehicles, referring to them as a “cash machine” that would help to fund future electric models.

But Källenius, who would not name a precise date for the end of combustion engine models, said “market dynamics”, as well as regulatory pressure and lower battery costs, would make the economic case for a more rapid switch to electric vehicles compelling.

Since taking the reins at Daimler two years ago, the former F1 executive has overseen the rollout of Mercedes’ first luxury electric vehicle, the EQS, which was designed from scratch as a battery-powered alternative to the brand’s flagship S-Class saloon. Four more electric models based on the same architecture are set to follow in the next 18 months.

Sales of existing electrified cars are also picking up pace. In the first three months of the year, Mercedes sold some 43,000 plug-in hybrids worldwide and more than 16,000 pure electric cars, together amounting to 10 per cent of global sales. Last year, such vehicles accounted for just 7.4 per cent of deliveries.

Källenius also welcomed EU plans to sharpen its CO2 targets for the transportation sector. “It’s an ambition that we say yes to,” he said, but warned that the bloc would need to “have an honest conversation about jobs”.

“Everybody knows it takes more labour hours to assemble and build a combustion-based power-train compared to an electric power-train,” he said.

“When a new technology takes over and we have this overriding goal of combating climate change and making sure the CO2 burden reduces, that’s politically the higher priority and also for our company, the higher priority.”

In recent months, Daimler has benefited from a spectacular recovery in the car market, led by China.

But the current semiconductor crisis, has forced the carmaker to cut production just as demand is rising, a development Källenius warned was a sign of things to come.

“There’s an underlying pressure on the chip side, with vehicles getting more sophisticated . . . [and] also volume makers putting content into vehicles that was perhaps only found in premium and luxury vehicles before,” he said. “There you have an additional layer of pressure that may affect us beyond the resolution of this immediate chip shortage situation.”

>>> US Close Dow -1.36% S&P -0.87% Nasdaq -0.09% Russell -0.26%

Closing Stock Market Summary

The S&P 500 lost 0.9% on Tuesday in a relatively broad-based decline, although growth stocks benefited from a buy-the-dip mindset following a weak open. The Nasdaq Composite decreased 0.1% after starting with a 2.2% decline, and the Russell 2000 decreased 0.3% after starting with a 2.5% decline.

The Dow Jones Industrial Average underperformed and closed lower by 1.4% following yesterday's record-setting session.

For a change of pace this month, selling interest was concentrated in the cyclical/non-technology stocks, including those within the energy (-2.6%), financials (-1.7%), and industrials (-1.4%) sectors. The materials sector (+0.4%) was an exception and was the only sector in the S&P 500 that closed higher today. 

Arguably, cyclical stocks were due for some profit taking after a strong start to the month, even though longer-dated Treasury yields and commodities continued to reflect inflation expectations. Inflation expectations were partially due to China's April PPI (+6.8% yr/yr) hitting its highest level since 2017 ahead of the U.S. April CPI report tomorrow. 

The 10-yr yield increased two basis points to 1.62%, and the 2-yr yield increased one basis point to 0.16%. WTI crude futures increased 0.7%, or $0.45, to $65.25/bbl. Copper futures rose 1.5%, or $0.07, to $4.79/lb. The U.S. Dollar Index was little changed at 90.18.

Growth stocks, meanwhile, had a pitiful start that was attributed to negative momentum and the uptick in long-term interest rates. Fortunately, the weak open was viewed as an opportunistic entry point considering many of these stocks were down substantially from their record highs. 

The ARK Innovation ETF (ARKK 106.12, +2.14, +2.1%) rose 2% after being down 5% intraday (and 38% off its record high), and the Philadelphia Semiconductor Index gained 0.3% after being down 3.2% intraday. The Vanguard Mega Cap Growth ETF (MGK 214.14, -0.50) declined just 0.2% after being down 1.9% intraday.

Roblox (RBLX 77.33, +13.33, +20.8%), which never traded lower today, rose 21% following its earnings report and the bargain-hunting mindset in growth stocks. Palantir (PLTR 20.21, +1.74, +9.4%) was initially down about 8% following its earnings report but closed higher by 9%. 

Reviewing Tuesday's economic data:

  • Job openings increased to 8.123 million in March from a revised 7.526 million in February (from 7.367 million).
  • The NFIB Small Business Optimism Index for April increased to 99.8 from 98.2 in March.

Looking ahead, investors will receive the Consumer Price Index for April, the Treasury Budget for April, and the weekly MBA Mortgage Applications Index on Wednesday. 

  • Dow Jones Industrial Average +12.0% YTD
  • Russell 2000 +11.8% YTD
  • S&P 500 +10.5% YTD
  • Nasdaq Composite +3.9% YTD

FT : Billionaires Peter Thiel and Alan Howard back new $10bn crypto exchange

Billionaires Peter Thiel and Alan Howard back new $10bn crypto exchange
The venture, Bullish Global, is betting on decentralised finance disrupting traditional markets

Billionaires Peter Thiel, Louis Bacon and Alan Howard are among the backers of a new cryptocurrency asset exchange that will bet heavily on decentralised finance radically reshaping trading and investment in digital assets.

The venture, run by blockchain software company Block.one, will be called Bullish Global and has been capitalised with more than $10bn in cash and digital assets ahead of its launch later this year.

Hong Kong businessman Richard Li, German financier Christian Angermayer, Michael Novogratz’s Galaxy Digital and Nomura, the Japanese investment bank, have also backed the group.

The decentralised finance, or DeFi, market has grown from about $15bn to $65bn since the start of the year, according to analysts at JPMorgan. Supporters say DeFi has the potential to disrupt traditional markets by building a system that bypasses the custodian, record keeping and trading roles that are typically reserved for banks, brokers or exchanges.

Block.one has said it will offer automated market making on a decentralised exchange, a development that could potentially offer a radically different way for investors to trade on markets.

Instead of using a traditional market maker to persuade buyers and sellers to trade on exchanges, investors will be able to deposit their own assets into a smart contract and let automated computer code handle buying and selling with interested parties. The smart contract will hold funds and take in data, as well as performing settlement and clearing.

Owners of assets are incentivised by sharing in the pool of fees that are generated by trading activity. This would replace the so-called “spread” that market makers earn on the difference between the price they pay to purchase assets and the level they are sold at. The process has been compared to YouTube because investors can generate and upload their own content, bypassing established intermediaries.

Because all information, including market data and transaction history, is publicly available but anonymous, some experts describe cryptocurrency as the world’s most difficult market to trade in.

Trading volumes on decentralised exchanges such as Uniswap and PancakeSwap, which uses the cryptocurrency exchange Binance’s blockchain, have surged in recent months as traders experimented with the technology and leveraged their gains in other speculative cryptocurrencies.

Monthly trading activity on Uniswap has repeatedly surpassed that of Coinbase, a listed cryptocurrency exchange. Dave Olsen, president of electronic market maker Jump Trading, said on his corporate webcast last month that DeFi was a potential “game changer” for markets over the next 10 years.

“The intermediaries, the rent-seekers, in financial markets that exist today could very well be disrupted by parties being able to interact directly on [block]chain,” he said.

“Bullish’s sheer size and scale combined with Block.one’s experience in high-performance blockchain engineering will make Bullish a formidable player from day one,” said Novogratz, a longtime investor in cryptocurrency technologies.

Bullish will use $100m, 164,000 bitcoins, 20m of its own crypto token EOS and an additional $300m strategic investment round for the $10bn capitalisation. Block.one will use its own blockchain, EOS.IO, to handle the business.