What’s the matter? (April 24-30)
Elon Musk will buy Twitter
Elon Musk reached an agreement on Monday to buy Twitter for around $44 billion, a deal that was unanimously approved by Twitter’s board of directors. The price stands at $54.20 per share, a 38 percent premium over the company’s share price in April, before Musk revealed that he had bought a 9 percent stake in Twitter. Within weeks, Musk, the world’s richest person, took his offer from something investors shrugged off to a serious proposal. The turning point came when he presented documents showing that he had the financing to back his offer. Now, it could be the biggest deal to take a company private in at least 20 years, according to data from Dealogic. Still, much uncertainty remains about how the fickle billionaire will carry out his vision of a platform with less restraint.
Stock handling charges
The latest chapter in one of the most high-profile Wall Street investigations in years unfolded Wednesday, when federal agents arrested Bill Hwang, owner of investment firm Archegos Capital Management, and his former chief financial officer, Patrick Halligan, in their houses. . The two were charged with conspiracy to extort money, securities fraud and wire fraud, all related to a scheme, according to a 59-page indictment, that involved deliberately misleading banks and manipulating stock prices. Initially, they were able to evade scrutiny because of loose regulations around “family offices” like Archegos, companies that manage investments for the ultra-rich. But the company collapsed last year, and $100 billion in shareholder value vanished almost overnight. Through their lawyers, the men pleaded not guilty.
The economy contracts but remains resilient
The US economy contracted in the first three months of the year, with gross domestic product declining 0.4 percent in the first quarter when adjusted for inflation, or 1.4 percent on an annualized basis. . The drop had largely to do with slower inventory growth and a widening trade deficit, as US exports were far outpaced by imports. In the absence of these, a measure of underlying growth rose 0.6 percent in the first quarter, with the White House choosing to focus on the data without what President Biden called the “technical factors” of inventories and trade. Mr. Biden also pointed to bright spots in Thursday’s GDP report that showed strong consumer spending and continued business investment, signs that the economic recovery is still resilient.
Whats Next? (May 1-7)
A jobs report that may look familiar
April jobs figures are due out on Friday and are expected to be similar to March. Analysts expect a gain of about 385,000 jobs (US employers added 431,000 in March) and an unemployment rate unchanged at 3.6 percent. Last month, some economists suggested that jobs “may be hitting their prime” and that factors such as rapid inflation and higher interest rates could soon slow the labor market. The economy has recovered more than 90 percent of the 22 million jobs lost at the peak of the pandemic shutdowns in the spring of 2020, but interventions by the Federal Reserve and other forces threaten to cut into those gains.