Musk’s Twitter deal on team, cryptocurrency rally, China slowdown

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By Geoffrey Smith – Elon Musk has put his offer on Twitter (NYSE πŸ™‚ on hold, apparently for due diligence reasons. Funding issues may also be behind the announcement. Crypto returns as it resists an onslaught of intense demand for redemptions. Equities and risk assets in general are also expected to open higher, but remain on course for a losing week. New data shows the extent of China’s economic downturn in April, and G7 ministers meet to discuss growing pressure on Russia. Here’s what you need to know in the financial markets on Friday, May 13th.

1. Cryptocurrency rebound

Cryptocurrencies returned violently as panic triggered by the collapse of the algorithmic stablecoin and its associated token subsided.

With renewed confidence, the world’s largest stablecoin network, Tether, successfully negotiated a period of intense demand for redemptions, with cryptocurrency holders rushing to convert their assets back into dollars or another fiat currency. Unlike TerraUSD, Tether is backed by real assets, over 40% of which are highly liquid, risk-free government bonds.

Tether has returned to a 1: 1 parity with the dollar in the first transactions in Europe. climbed as high as 13% before total gains and rose 8.6% to $ 30,409 from 6 p.m. 13:15. However, it is still down about 16% during the week, after a few difficult days for risky assets in general.

The TerraUSD network tried to resume trading overnight, but quickly shut down again.

2. Musk puts the Twitter deal on hold

Elon Musk said his takeover bid on Twitter is “temporarily suspended”. The CEO of Tesla (NASDAQ πŸ™‚ said the move was in response to a statement from Twitter on Thursday that less than 5% of accounts in its network are spambots or fake news. Musk has indicated that he believes the proportion is much higher and has made removing them one of his top priorities.

However, the math behind Musk’s leveraged buyouts has become more complicated as the value of his Tesla shares has fallen around 16% over the past week. They are now at almost 30% of the highest level of the year. Under the original terms of the deal, Musk was to borrow about $ 12 billion of its stake through a margin loan.

Twitter shares fell more than 20% ahead of the market in response to the news, while Tesla shares rose 4.8% as the risk of a stock surplus waned.

Shares should open higher thanks to short position coverage; chipmakers in the crosshairs after price rise report

US stocks are expected to open higher later, with some short-term coverage at the end of a volatile week. The mood improved towards the end of the day already on Thursday, when Federal Reserve Chairman Jerome Powell again pushed the idea of ​​raising the key interest rates by 75 basis points back at the next central bank policy meeting.

13:20 rose 216 points or 0.7% while rising 1.0% and 1.6%. That would still leave them on course for a loss of between 2.8% and 4.2% this week.

Among the stocks likely to receive special attention are chipmakers, after Bloomberg reported that industry leader Samsung (KS πŸ™‚ is seeking to raise the prices of its semiconductors by 20% while the action Duolingo (NASDAQ πŸ™‚ rose 17% in the pre-market after its quarterly update.

Also expected on Friday are the results of Jessica Alba. (NASDAQ :), while the ADRs of Honda (NYSE πŸ™‚ rose 3.9% after the Japanese car giant had better-than-expected earnings – although it also lowered its forecast.

4. Chinese lending growth is slowing sharply

Credit growth in China slowed sharply in April due to containment measures aimed at halting the spread of COVID-19. These affected nearly 400 million people during the month, according to some estimates, including Shanghai’s main economic center, many of which remain under severe restrictions.

New loans fell from more than 3.1 billion yuan in March to 645 billion yuan, while the broader credit line known as also fell to its weakest growth since the start of the pandemic. The data underscore the extent of the downturn in China, where studies indicate that manufacturing and service activity declined in April.

The closures do not help the balance of the country’s struggling property developers: Shimao Property (HK :), one of the largest, said its contract sales in April fell by 76% from the previous year, clearly illustrating the decline in the sector’s ability to service its debt.

5. Oil continues to rise due to fears of declining Russian production and the number of Baker Hughes rigs.

Crude oil prices extended their gains from Thursday as the G7 foreign ministers met to coordinate increased diplomatic and economic pressure on Russia to withdraw from its faltering invasion of Ukraine.

By 1:30 p.m., oil futures had risen 1.7% to $ 107.99 per share. barrel, while oil futures rose 1.8% to $ 109.36 per barrel. barrel.

The International Energy Agency on Thursday estimated that Russian oil production could fall to about 1.6 million barrels a day below pre-war levels in June, due to difficulties in reorganizing much of its oil exports due to Western sanctions.

Data from Baker Hughes and CFTC Net are expected later.

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