ChatGPT Hype Creates a Rush to Artificial Intelligence Companies (Bloomberg)
FedEx is laying off 10% of its Officers and Directors in an Effort to Reduce Costs (CNBC)
Federal Reserve's Jerome Powell Headbutts With Wall Street Bulls
A new market rally in public equities, corporate bonds and cryptocurrencies is gaining momentum. However many are viewing this rally with concern due to the possibility of the Federal Reserve over-compressing the U.S. economy, which remains a primary concern for Wall Street. Market observers have identified a trend of investors caught in a cycle of buying assets in anticipation of a change in Fed policy, only to be disappointed when the central bank decides to maintain its current stance. The Minneapolis Fed President, Neel Kashkari, has warned investors that the central bank is "not afraid to act in order to beat inflation", even if it means standing up to Wall Street.
"[The market is] pricing in rate cuts, it’s already seeing the data roll over...So the Fed’s going to keep trying to communicate higher for longer, but the market is already looking through it."
Kelsey Berro, JPMorgan Asset Management
Private Funding Pulse Check
The Haniel Group has invested in a recent $27M Series A funding round for Sdui, a technology company that offers a digital education operating system
Dolby Family Ventures and Yamauchi No.10 played a lead role in the $16.2M Series A funding round of Atomos Space, a firm specializing in orbital logistics for satellite operators and providing "last mile" transportation services
RB Investments participated in a $1.1M Follow-On seed funding round for WhyQ, the biggest hawker food delivery and catering service in Singapore
Bluestein Ventures took part in a $5.3M Seed deal with People Science, a direct-to-consumer scientific research company providing a scaled R&D platform for alternative medicines
Adani Enterprises' $2.5 billion share sale was cancelled on Wednesday, with "market volatility" blamed. Shares in Adani Enterprises fell sharply after the company was accused of fraud by New York investment firm Hindenburg Research. The Adani Group has dismissed the allegations, calling Hindenburg's report a "calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India". The Adani Group's other companies, including Adani Green Energy and Adani Total Gas, have also fallen in recent trading. Shareholders in these companies have lost more than $90 billion in market value since the allegations were made.
"Despite the volatility in the stock over the last week, your faith and belief in the company, its business and its management has been extremely reassuring and humbling...However, today the market has been unprecedented, and our stock price has fluctuated over the course of the day. Given these extraordinary circumstances, the company’s board felt that going ahead with the issue will not be morally correct."
Gautam Adani, Adani Enterprises
Investors Urge for Increased Hedging Options to Counter China Market Risks
The lack of hedging tools, such as futures and securities lending, is hindering the ability of global institutional investors to fully participate in Chinese markets. Despite being included in benchmark global indexes four years ago, the lack of risk management options in Chinese stock markets has hindered foreign investment. Limited access to futures and a ban on securities lending, which blocks the shorting of shares, are some of the challenges faced by investors. China is eager to attract foreign capital to its $10 trillion market, but also cautious about its market legislation. Although there have been recent relaxations of foreign quotas, China remains vigilant of fast money and market instability.
"If you can’t fully risk manage your trading exposure in the market, that raises the cost of trading...There’s still a material disincentive to dealing in the China market."
Eugene Goyne, EY
Cryptocurrency is Now a "Toxic Asset", Says JPMorgan
According to a JPMorgan survey, 72% of Wall Street traders have no plans to trade cryptocurrencies in 2023, compared to 25% a year ago. Just 8% of market traders are currently trading cryptos and 14% plan to within five years. The negative sentiment aligns with JPMorgan CEO Jamie Dimon who has repeatedly criticized cryptocurrencies. The survey was conducted after a disappointing year for the crypto sector, which saw a 70% drop in Bitcoin's value. The bankruptcies of FTX and other crypto platforms, along with the challenging macroeconomic environment and rising interest rates, have caused investors to be wary of digital assets.
"I think all that is a waste of time, and why you guys waste any breath on it is beyond me...Bitcoin itself is a hyped-up fraud. It's a pet rock."
Wealth Enhancement Group, a national wealth management firm with more than $60B in client assets, has acquired hybrid RIA Legacy Financial Planning who oversaw more then $371M in assets (Cision)
LPL Financial announced the closing of its deal with Boenning & Scattergood, a West Conshohocken, PA-based RIA with roughly $4B in assets (GNW)
Choreo, LLC has completed an agreement to acquire GreerWalker LLC, an RIA that served high-net-worth individuals and retirement plans with $275M in AUM (Cision)
Written by:
Andrew Popp | Sr. Research Associate
FINTRX delivers an industry-leading suite of private wealth data and research solutions to the alternative investment space and private capital markets. Engineered to help clients identify and access family office and RIA capital intuitively, the FINTRX platform ensures accurate and updated data and research on 850,000+ private wealth records globally. To subscribe to our newsletter and see previous versions click below.
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