April 1, 2024
Market setup
Major U.S. indexes were near high levels. The S&P 500 stood at 5,254.35, the Dow at 39,807.37, the Nasdaq at 16,379.46, and the Russell 2000 at 2,072.00. Outside the U.S., the FTSE 100 was at 7,952.62, while Japan's Nikkei 225 was at 40,369.44 after a weekly decline.
WTI crude traded at $83.12, up 2.86% week over week, and the 10-year Treasury yield was 4.2%. The Federal Reserve held the federal funds rate at 5.50%. Projections pointed to three possible 25 basis point cuts, which would take the rate to 4.75% by the start of 2025. Oppenheimer raised its S&P 500 year-end target to 5,500, while Bank of America and UBS projected 5,400.
Baltimore disruption
The Francis Scott Key Bridge collapsed after the cargo ship Dali lost power and hit the bridge. The bridge is an important entry point to the Port of Baltimore, which handles imported cars, farm equipment, and coal exports. The port is also the second-largest U.S. hub for coal exportation.
Consol Energy and CSX, which operate export terminals at the port, were affected and had to divert some shipments to other regional ports. The disruption was not expected to match pandemic-era shipping backlogs, but it created a near-term logistics issue for autos, agricultural equipment, coal exports, rail operators, and terminal companies tied to Baltimore volume.
AI and deal activity
Amazon invested another $2.75 billion in Anthropic, bringing its total investment to $4 billion. Anthropic, founded by former OpenAI employees, offers Claude 3. More than $29 billion was invested in generative AI companies last year. The Amazon investment also supports its cloud business, where AI capabilities can be sold to enterprise customers.
Visa and Mastercard agreed to cap swipe fees as part of a class-action settlement tied to a 2005 lawsuit. The settlement could save merchants an estimated $30 billion over five years and includes a ceiling on swipe fees, a rollback of posted fees, and more ability for merchants to adjust prices based on card costs.
Baidu shares rose 5.4% in Hong Kong after reports of a potential AI collaboration with Apple. The arrangement would make Baidu a local generative AI provider for Apple products in China, subject to regulatory approval. Baidu's Ernie Bot had already been approved as one of more than 40 models.
Novo Nordisk agreed to buy Cardior Pharmaceuticals for €1 billion, or about $1.08 billion. Cardior focuses on cardiovascular disease treatments using RNA-based therapies, giving Novo a way to expand beyond diabetes and weight-loss drugs such as Ozempic and Wegovy.
Global data
China's foreign direct investment fell 19.9% year over year to ¥215.1 billion, or $29.88 billion, in January and February. Newly established foreign-funded enterprises rose 34.9%, while unemployment was 5.3%. Singapore CPI rose 3.4% in February, above the 3.3% estimate, and core CPI rose 3.6%.