Global PMI Data Surprises to the Upside, Inflation Cools and Chinese Imports Disappoint in this Week's Edition...
Take a Lap Around the Industry
Prosecutors Request Financial Information, Sending Carl Icahn's Company Stock Tumbling (CNBC)
Brookfield Raises Record $19 Billion for New Funds as Earnings Rise (Bloomberg)
Easing U.S. Travel Demand Casts Shadow Over Airbnb's Future Growth Prospects (Reuters)
Economic Slowdown Puts Pressure on Wealthy Americans (Yahoo)
According to Latest PMI Data, Blue Skies, Storm Warnings
In the face of a record monetary tightening cycle, the global economy has proven to be more resilient than expected. The Purchasing Managers Index (PMI), which acts as a predictor of industry and output trends, has shown a positive outlook for a number of economies around the world, with the majority of countries reporting expansion PMI readings above 50. Worth noting, in previous economic cycles leading indicators were weak only when the U.S. economy was already in a recession. For this reason, experts suggest that global manufacturing and consumer spending have artificially propped up major economies year-to-date. Despite March surveys exceeding expectations, elevated concerns of impending recessions in major economies and doubts about the resilience of the growth revival remain at the forefront of investor's minds. Overall, the PMI survey presents a mixed outlook for the global economy, highlighting some positive signals but also potential areas of concern for the second half of 2023.
"Inflationary pressures have meanwhile continued to cool in manufacturing, but price pressures have picked up in services following the resurgence of demand."
Chris Williamson, S&P Global Market Intelligence
Private Funding Pulse Check
Automated manufacturing production intelligence company, Datanomix, has successfully secured $12M in their Series B round, with participation from Delray Beach, FL-based family office, CEAS Investments
Peter Thiel's family office, Thiel Capital, has invested in a $1.9M Pre-Seed funding round in HiNote, a modern messaging app that injects purpose and personal touch to everyday texting
Genemod, a cutting-edge lab inventory and project management platform, has garnered $4.5M in investment in a recent Venture Seed round, with the participation of Cercano Management
Peterson Partners has participated in a strategic private equity investment in [Solidcore], a company that specializes in pilates fitness and wellness
Slow Progress in Reducing Core Inflation Makes Fed Rate Cuts Unlikely This Year
The latest Bureau of Labor Statistics report indicates that U.S. inflation moderated in April, with the consumer price index (CPI) rising by 4.9% from a year earlier, the first sub-5% reading in two years. The core CPI, excluding food and energy, also saw a slight cooling. However, overall prices are still increasing at a brisk pace, and the job market remains robust. Experts believe the Fed will need to observe more than one month of data to be sure that price pressures are on a sustained downward trend, especially after officials hinted last week that the Fed may be done hiking rates for now. Although inflation is showing signs of moderation, economists suggest that the Fed is unlikely to cut rates this year, given the slow progress in reducing core inflation.
"While the April CPI report isn’t exactly reassuring, it also won’t jolt Fed officials into signaling another rate hike in June, given their expectation that the full disinflationary impact from tighter credit conditions has yet to show up. However, the slow progress in reducing core inflation highlights how unlikely it is that the Fed will cut rates this year."
Anna Wong & Jonathan Church, Bloomberg
Weak Imports in China Raise Concerns Over Domestic Economic Conditions
New data this week reveals that sluggish imports into China suggest ongoing struggles with domestic demand in the country, raising cause for concern. As the world’s second-largest economy, China plays a pivotal role in driving global economic growth and the demand for a wide range of commodities. Unfortunately, the numbers show that imports have fallen by 7.9% in April compared to the same period last year. This decline is noteworthy given last year's import numbers which were already weak due to COVID-19-related lockdown measures that restricted economic activity. Despite the reopening of the Chinese economy, there is still a lack of robust demand for commodities, which represents a significant shift from the growth trend of the last few decades for China. Economists and markets across the globe will keep a watchful eye on this trend, as it could have significant implications for the global economy and commodity demand.
"Don’t be fooled by headline export figures from China that show shipments growing in April compared with last year, when the figures were depressed by pandemic lockdowns. The real picture is much weaker."
David Qu, Bloomberg
ThredUp to Join Growing Ranks of Companies Committed to Sustainable Principles with LTSE Listing
Clothing consignment company ThredUp has announced that it will be dual-listing its stock on the Long Term Stock Exchange (LTSE), a national securities exchange with a focus on promoting sustainable principles and a long-term focus among investors and businesses. The LTSE was founded to address criticism that companies have been focusing on maximizing profits for shareholders above all else, with the aim of reversing the epidemic of short-term thinking. To list with the LTSE, a company must outline a set of principles to ensure that it will abide by certain long-term commitments, such as environmental improvements or corporate governance standards. ThredUp's commitment to LTSE aligns with its emphasis on long-term, forward-looking policies that emphasize environmental responsibility, despite the difficult retail environment that it is currently navigating. ThredUp is the second company to list on the LTSE, with Asana being the first in 2021.
"People are going to realize that the definition of profit that we have been using the last 25 years is wrong, and that what it means to make a profit is to maximize human flourishing..."
Hightower has acquired Ten Capital Wealth Advisors, a $1B RIA with offices in Spokane and Seattle, WA (Barron's)
Wealth Enhancement Group finalized its purchase of Infinity Wealth Alliance, a hybrid RIA from Apple Valley, MN that oversees $238M in client assets (Cision)
Kevin O'Leary's advised company, StartEngine, has acquired the assets of fellow equity crowdfunding platform SeedInvest from Pluto Holdings, LLC (Cision)
Written by:
Andrew Popp | Sr. Research Associate
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