Friday, April 8, 2022

Dow Finishes Higher Friday, but Stocks End Choppy Week Lower. The Dow closed modestly higher Friday, but all three major stock indexes finished the week lower after the Federal Reserve’s March meeting minutes outlined its tentative plans to cut the size of its $9 trillion balance sheet at a record pace. The Dow Jones Industrial Average rose 138 points, or 0.4%, to about 34,721. The S&P 500 slipped 12 points, or 0.3%, to 4488. The Nasdaq Composite shed 186 points, or 1.3%, to close at 13,711. For the week, the Dow slipped 0.3%, while the S&P 500 fell 1.3%, and the Nasdaq dropped nearly 4%. 

(Editor’s note: We will publish the next Market Brief on Thursday, April 14, because the stock market will be closed on April 15 in observance of Good Friday.)

Fed Plots to Start Shrinking Balance Sheet in May, Sooner and More Than Expected

The Federal Reserve is likely to begin shrinking its balance sheet as soon as next month, minutes from the central bank’s March policy meeting show, several months sooner than Wall Street has anticipated. More hawkish still is the signal that the Fed will likely have to sell some of the $3 trillion in mortgage-backed securities it has amassed over the past two years.
The minutes released this week show that officials continued to debate how they would start to reverse the trillions of dollars of pandemic bond purchases that roughly doubled the Fed’s balance sheet to about $9 trillion.
They stopped short of finalizing a plan, but the minutes say officials “made substantial process on a plan” to start so-called quantitative tightening and could begin reducing the balance sheet “as early as after the conclusion of [the] upcoming meeting in May.”

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Ketanji Brown Jackson Is Confirmed to Supreme Court

Judge Ketanji Brown Jackson this week became the first Black woman to be confirmed to the Supreme Court.
The Senate voted 53-47 to confirm Jackson’s nomination, making her the 116th Justice of the United States Supreme Court. Three Republicans—Sens. Susan Collins of Maine, Lisa Murkowski of Alaska, and Mitt Romney of Utah—broke party ranks and joined the Democrats in pushing forward the confirmation.

Janet Yellen Calls for Crypto Regulation in Landmark Speech

Janet Yellen called for regulation covering cryptocurrencies and the business of digital assets this week, addressing the subject for the first time in a landmark speech.
The Treasury Secretary and former Federal Reserve chair offered insight into a timeline for a potential digital dollar, and left no doubt that Wall Street’s move into crypto will be met with new oversight.

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FDA Advisors Say Fall Booster Vaccine Will Be a Challenge

Heading off a serious Covid-19 wave this fall could take a new kind of Covid-19 vaccine that targets variants of the virus, not the original strain. Determining which variant to target, and how to design the booster, could be the most complex and difficult decision of the entire Covid-19 vaccination campaign.
That is the takeaway from this week’s meeting of the Food and Drug Administration’s vaccines advisors, which highlighted the extraordinary challenges that face regulators and drugmakers as they prepare for fall, when Covid-19 vaccine boosters will be in heavy demand.

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U.S. Levies Sanctions on Putin’s Children, Two Major Russian Banks

The U.S. sanctioned two of Russia’s biggest banks and more of President Vladimir Putin’s close family and associates as it expands penalties for the invasion of Ukraine.
Sberbank, Russia’s biggest financial institution, and Alfa Bank, the biggest private bank, will be fully blocked. Putin’s adult children as well as the wife and daughter of Russia’s foreign minister were also sanctioned.

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Warren Buffett’s Berkshire Hathaway Takes 11% Stake in HP

Berkshire Hathaway has accumulated an 11.4% stake worth $4.2 billion in HP, the maker of personal computers and printers, according to regulatory filings.
The purchases of HP shares ramp up a recent buying spree by Berkshire Hathaway under CEO Warren Buffett. Berkshire has amassed a nearly 15% stake in Occidental Petroleum worth $7.6 billion and has a deal to buy the insurer Alleghany for $11.6 billion.

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Oil Companies Deny They’re Gas ‘Gouging.’ Lawmakers Suggest Price Setting.

Executives from the largest oil and gas companies defended their industry this week as House lawmakers grilled them on their role in setting gasoline prices at the pump at a committee hearing entitled “Gouged at the Gas Station: Big Oil and America’s Pain at the Pump.”
“Big Oil is lining their pockets with one hand and taking billions in taxpayer subsidies with the other,” said Rep. Frank Pallone (D., N.J.), who chairs the Energy and Commerce Committee.

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Elon Musk to Hold Q&A With Twitter Staff After Employee Backlash

Twitter will hold a question-and-answer session next week for employees with new board director Elon Musk, a spokesperson confirmed to Barron’s on Friday. The move comes amid employee concerns about how Musk might change the company culture at Twitter, according to a report.
“Following our board announcement, many of you have had different types of questions about Elon Musk, and I want to welcome you to ask those questions to him,” Twitter CEO Parag Agrawal said in a company-wide email on Thursday.

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Walmart to Pay First-Year Truck Drivers as Much as $110,000

Walmart’s private truck drivers just got a hefty raise.
The retail giant announced it would be increasing salaries for its freight drivers in a bid to recruit talent amid a tightening labor market, rising freight costs, and pressured supply chains that have had a detrimental effect on retailers throughout the pandemic.

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Amazon Ramps Up Its Battle With SpaceX for Space Internet Dominance is laying out plans to launch thousands of small satellites capable of beaming high-speed internet service to earth—an initiative that puts it in direct competition with Elon Musk’s SpaceX, as well as terrestrial-based internet-service providers.
This week, Amazon announced that it has purchased capacity on more than 80 rocket launches to carry its satellites into low earth orbit. The satellites will form the basis of a constellation that Amazon will use to offer high speed, space-based internet.

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