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Good morning. The global supply of public equity is shrinking at its fastest pace in at least 25 years, as economic and geopolitical uncertainty weighs on new share sales while companies keep buying back large volumes of their own stock.
The figures, from JPMorgan analysts, confounded the bank’s own expectations and suggest a lingering lack of confidence among executives. Rising stock markets and relatively strong economies should, in theory, encourage companies to raise funds by selling new shares at high prices rather than spending cash to buy them back.
Yet data shows that the global universe of public equities has already shrunk by a net $120bn this year, exceeding the $40bn taken out over all of last year. That puts the net figure on course for a third consecutive year of decline — a phenomenon not seen since the bank’s data series began in 1999. Here’s what the trend means for companies around the world.
And here’s what I’m keeping tabs on today and over the weekend:
Economic data: The US government publishes monthly employment statistics, with economists expecting the number of jobs created last month to have fallen compared with February. Canada also releases monthly jobs data.
Monetary policy: Boston Fed president Susan Collins, Richmond Fed president Thomas Barkin, Dallas Fed president Lorie Logan and Federal Reserve board governor Michelle Bowman speak at public events today.
Cryptocurrency trial: Closing arguments are expected at the trial of cryptocurrency developer Terraform Labs and its founder Do Kwon on civil fraud charges brought by the US Securities and Exchange Commission.
Sport: Caitlin Clark leads the Iowa Hawkeyes towards a potential rematch with Louisiana State University this weekend in the National Collegiate Athletic Association tournament. She is one a new generation of players generating greater interest — and money — into basketball.
How well did you keep up with the news this week? Take our quiz.
Five more top stories
1. The Biden administration is drawing up plans to require goods produced in Jewish settlements in the occupied West Bank to be clearly labelled as coming from there, according to US officials. The final go-ahead for the move and its timing have not been given yet but it is the latest sign of the Biden administration’s unhappiness with the government of Benjamin Netanyahu. The move would be a reversal of a policy introduced by Donald Trump in 2020.
Biden-Netanyahu call: Israel said it would open an additional crossing to allow aid into Gaza after President Joe Biden warned Israel that US support for its war against Hamas would depend on its efforts to address humanitarian suffering in the enclave.
2. Oil prices yesterday rose above $90 a barrel to settle at their highest closing price since October as renewed tensions in the Middle East sent tremors through markets. The S&P 500 experienced its sharpest decline since the middle of February and US government bonds also rose as investors sought safe-haven assets. Equity markets in Asia and Europe have followed Wall Street lower today. Here is the latest news from our markets reporter Stephanie Stacey.
3. Samsung Electronics expects to post a 10-fold jump in first-quarter operating profit as memory chip prices stage a strong recovery after the industry’s worst downturn in decades last year. Production cuts by major producers and strong demand for high-performance chips amid an artificial intelligence boom have buoyed chip prices. Read more details of Samsung’s trading update which beat analysts’ expectations.
4. Larry Fink faces a proxy challenge to his dual role as chair and chief executive of BlackRock from a UK activist investor that wants more board oversight of the $10tn money manager’s approach to sustainable investing. Bluebell Capital Partners, which has $120mn in assets, also said BlackRock’s 17-member board was too large and criticised an “unequivocal failure” in governance. Here’s more on the challenge to Fink.
5. Donald Trump’s bids to dismiss three of the criminal cases against him have been summarily thrown out by a trio of state and federal judges in the space of just 24 hours, delivering a new set of legal setbacks to the former president. Three different judges denied his requests on cases involving classified documents, “hush money” and election interference. Here’s the latest on Trump’s legal woes.
Trump and Fox News: Today’s Big Read explores the uneasy truce forged between the presumptive Republican candidate and a TV network emblematic of the American right.
US election: No Labels, the bipartisan group that had aimed to field an independent “unity ticket” in the 2024 presidential contest, has scrapped its bid, removing a threat to Joe Biden’s re-election campaign.
Sign up for our US Election Countdown newsletter for an essential guide to the twists and turns of the 2024 presidential race.
Weekend read
How do genocides happen? From April 7 to mid-July 1994, Rwanda suffered the most sustained, rapid and focused mass murder since the Holocaust, with more than 800,000 Tutsis and moderate Hutus slaughtered by génocidaires from the majority Hutu ethnic group. As the country commemorates the fallen 30 years on, foreign editor Alec Russell asks: what is the Rwandan genocide’s legacy, and what have we learnt?
We’re also reading . . .
Chart of the day
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When Andrés Manuel López Obrador took office in 2018, agents at the US Drug Enforcement Administration knew their job was about to become a lot more difficult. Mexico’s new president promised a less confrontational approach to organised crime dubbed “hugs, not bullets”. As the president nears the end of his six-year term, fentanyl — much of it made in Mexico — has become the leading cause of death among Americans aged 18 to 45 and Mexico-DEA relations are at a low point. Christine Murray spoke to agents, security experts and a former US ambassador to Mexico for this report.
Take a break from the news
Five years have passed since Prince Andrew sat for the cameras of the BBC’s Newsnight to discuss his friendship with sex offender Jeffrey Epstein. Now Scoop, starring Gillian Anderson, offers to lift the lid on the most wildly botched PR exercise in modern media history. Film critic Danny Leigh gives his verdict on Philip Martin’s film.
Additional contributions from Tee Zhuo and Benjamin Wilhelm
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Source: Economy - ft.com
