Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Musk's Twitter Deal on Hold, Crypto Rally, China Slows - What's Moving Markets

EconomyMay 13, 2022 06:45AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Geoffrey Smith 

Investing.com -- Elon Musk put his Twitter (NYSE:TWTR) bid on hold, ostensibly due to due diligence reasons. Financing problems may also be behind the announcement. Crypto rebounds as Tether withstands a bout of intense demand for redemptions. Stocks and risk assets in general are also set to open higher, but are still on course for a losing week. New data show the scale of China's economic slowdown in April, and G7 ministers meet to discuss raising the pressure on Russia. Here's what you need to know in financial markets on Friday, 13th May.

1. Crypto rebound

Cryptocurrencies rallied violently as the panic triggered by the collapse of algorithmic stablecoin TerraUSD and its associated LUNA token faded.

Confidence returned as the world’s largest stablecoin network Tether successfully negotiated a period of intense demand for redemptions as crypto holders rushed to convert their assets back into dollars or other fiat currency. In contrast to TerraUSD, Tether is backed by real assets, over 40% of which is highly-liquid and risk-free Treasury bills.

Tether returned to trading around its 1:1 peg with the dollar in early dealings in Europe. Bitcoin surged by as much as 13% before paring its gains to be up 8.6% at $30,409 as of 6:15 AM ET. It’s still down around 16% on the week, however, after a rough few days for risk assets in general. 

TerraUSD's network tried to resume trading overnight but quickly shut down again.

2. Musk puts Twitter deal on hold

Elon Musk said his bid for Twitter is “temporarily on hold”. The Tesla (NASDAQ:TSLA) CEO said that the move was a response to a filing by Twitter on Thursday that claimed fewer than 5% of the accounts on its network are spam bots or vehicles for fake news. Musk has indicated he thinks the proportion is much higher and has made their removal one of his top priorities.

However, the arithmetic behind Musk’s leveraged buyout offer had become more complicated as the value of his Tesla shares has fallen some 16% in the last week. They’re now nearly 30% of this year’s high. Musk was set to borrow some $12 billion against his shareholding through a margin loan under the original terms of the deal.

Twitter stock fell over 20% premarket in response to the news, while Tesla stock rose 4.8% as the risk of a significant equity overhang faded.  

3. Stocks set to open higher on short-covering; chipmakers in focus after price hike report

U.S. stocks are set to open higher later, with some short-covering overdue at the end of a volatile week. Sentiment improved toward the end of the day already on Thursday, as Federal Reserve Chair Jerome Powell again pushed back against the idea of raising key interest rates by 75 basis points at the central bank’s next policy meeting.

By 6:20 AM ET, Dow Jones futures were up 216 points, or 0.7%, while S&P 500 futures were up 1.0% and Nasdaq 100 futures were up 1.6%. That would still leave them on course for losses of between 2.8% and 4.2% this week.

Stocks likely to be in focus later include chipmakers, after Bloomberg reported that industry leader Samsung (KS:005930) is looking to put prices for its semiconductors up by 20%, while Duolingo (NASDAQ:DUOL) stock is bouncing 17% in premarket after its quarterly update.

Also due to report Friday are Jessica Alba’s Honest Company (NASDAQ:HNST), while Honda (NYSE:HMC) ADRs were up 3.9%, after the Japanese auto giant put out better-than-expected earnings - even if it cut its guidance at the same time.

4. Chinese loan growth slows sharply

China's credit growth slowed sharply in April under the impact of spreading lockdowns to stop the spread of COVID-19. These affected nearly 400 million people during the month, according to some estimates, including the key economic hub of Shanghai, much of which remains under severe restrictions. 

New loans fell to 645 billion yuan from over 3.1 billion yuan in March, while the broader credit aggregate known as Total Social Financing also collapsed to its slowest growth since the start of the pandemic. The data underline the scale of the slowdown in China, where surveys indicate that both manufacturing and services activity fell in April. 

The lockdowns are doing nothing to help the balance sheets of the country's beleaguered real estate developers: Shimao Property (HK:0813), one of the largest, said its contracted sales in April were down 76% from a year earlier, a stark illustration of how the sector's ability to service its debt load is deteriorating.

5. Oil rises further amid fears of Russian output hit; Baker Hughes rig count due

Crude oil prices extended Thursday’s gains as G7 foreign ministers met to coordinate raising the diplomatic and economic pressure on Russia to abandon its faltering invasion of Ukraine.

By 6:30 AM ET, U.S. crude futures were up 1.7% at $017.99 a barrel, while Brent futures were up 1.8% at $109.36 a barrel.

The International Energy Agency estimated on Thursday that Russian oil output could fall to some 1.6 million barrels a day below its pre-war level by June, due to the difficulties of rearranging the large part of its oil export trade due to western sanctions.

Baker Hughes’ rig count and the CFTC’s net positioning data are due later.

 
 
 
Musk's Twitter Deal on Hold, Crypto Rally, China Slows - What's Moving Markets
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (6)
Sai Sai
Sai Sai May 14, 2022 12:33PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
god
Anna Maria
Anna Maria May 13, 2022 11:18AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Musk already made his money, he bought Twitter stocks before anouncing takeover, Twitter price rose and at the peak he sold what he bought previously. (aside his usual shares of twitter). He made this move with crypto too, it's his way of making easy money
James Long
James Long May 13, 2022 8:40AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The market is nothing more than a Casino.
gab nea
gab nea May 13, 2022 7:53AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
the richest man can't get financing? why doesn't he use his own money? scared it may go bust if he messes with it as planned?
Gary Moses
Gary Moses May 13, 2022 7:53AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Nice try. But thats not the Real Reason.
gab nea
gab nea May 13, 2022 7:51AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
twitter will go the way AOL went!
Mike Caldera
Mike Caldera May 13, 2022 7:21AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Twitter is the new Enron
Tre Hsi
Tre Hsi May 13, 2022 7:21AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
at least Twitter is not pretending to make money
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email