—— Morgan Stanley & JPMorgan Say Buy U.S. Bonds; Multiple Bidders for DocuSign Buyout; A-Share/Hong Kong Stock Gap Hits Record; Top 20 Hedge Funds Make $67B; China Ramps Up Chip Gear Imports; Trump SPAC Soars 175%; AI Voice Startup Valued Over $1.1B
1. Morgan Stanley & JPMorgan Say Buy U.S. Bonds
Last week, U.S. Treasuries suffered their worst selloff since May 2023, with 5-year yields jumping 22 basis points as traders cut back expectations for Fed rate cuts this year.
The odds of a March rate cut have dropped to 40%. Markets now anticipate five 25-basis-point cuts in 2024—down from six or seven previously.
Today, both Morgan Stanley and JPMorgan advised investors to “buy the dip” in 5-year Treasuries, noting yields have returned to December’s highs.
Matthew Hornbach, Morgan Stanley’s global head of macro strategy, said they’ve been waiting for this bottom to form. With less fiscal support expected, he believes weak February data could prompt quicker Fed easing.
Treasury values typically rise when the Fed cuts rates—but smaller-than-expected cuts have driven recent declines.
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2. Multiple Bidders for DocuSign Buyout
Sources say Bain Capital and Hellman & Friedman are competing to take e-signature platform DocuSign private.
The deal could involve up to $8 billion in loans, and private credit firms are battling traditional banks to lead the financing.
Bloomberg reports this potential loan package would be $3 billion larger than previous records.
With the Fed winding down its hawkish cycle, junk bond and syndicated loan markets have rebounded. Lower base rates also make bank loans more attractive, intensifying competition with private lenders.
DocuSign went public in 2018 and currently has a market cap of around $13 billion.
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3. A-Share / Hong Kong Stock Gap Hits Record
Today, Chinese stocks in Hong Kong were hit with another wave of selling. The Hang Seng China Enterprises Index dropped 2.4%, nearing its 20-year low, while the mainland CSI 300 Index fell 1.6%.
The gap between A-share and Hong Kong listings of the same companies has reached its widest since 2009—with Hong Kong shares now trading at a 36% discount.
Saxo Capital Markets explained that Hong Kong investors include many foreign funds that have shifted capital to Japan and other Asian markets, while domestic A-share investors face more restrictions when selling.
Analysts say Hong Kong-listed prices better reflect true investor sentiment.
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4. Top 20 Hedge Funds Make $67 Billion
According to LCH Investments, the world’s top 20 hedge funds generated $67 billion in profits for investors in 2023—surpassing the previous $65 billion record set in 2021.
Since 2012, LCH has tracked hedge fund performance based on net cumulative returns after fees.
Fund TCI delivered a 33% return last year, outperforming the S&P 500’s 24%, and made $12.9 billion in profit for its investors.
Citadel earned $8.1 billion, below its record $16 billion in 2022, but remains the most profitable hedge fund since inception.
Research director Brad Amiee credited strong equity markets for the funds’ stellar results.
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5. China Ramps Up Chip Gear Imports
Bloomberg data shows China imported $40 billion worth of chipmaking equipment in 2023—a 14% year-over-year increase and the second highest total since 2015.
Despite an overall 5.5% drop in Chinese imports, the surge in semiconductor machinery underscores China’s focus on domestic chip R&D and self-sufficiency.
Weeks before the U.S. imposed new chip export bans, it pressured Dutch firm ASML to cancel advanced orders from China.
The U.S. goal is to slow China’s development of cutting-edge chip technology.
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6. Trump SPAC Soars 175%
As Donald Trump secures his lead in the Republican primaries, investors have rushed back into stocks tied to his media ventures.
Over the past six sessions, Digital World Acquisition Corp. (DWAC)—the SPAC aiming to take Trump Media public—has surged 175%.
After rival Ron DeSantis exited the race and endorsed Trump, DWAC stock jumped 80% in a single day.
Julian Klymochko, CEO of Accelerate Financial Technologies, believes $8 billion of DWAC’s valuation is speculative “froth” and that Truth Social has no fundamental value.
The most popular DWAC call options now target a strike price of $55—the highest since 2022.
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7. AI Voice Startup Valued Over $1.1 Billion
AI voice-cloning startup ElevenLabs raised $80 million in its latest funding round, pushing its valuation past $1.1 billion.
Backers include Andreessen Horowitz, Sequoia Capital, Smash Capital, and SV Angel. To date, the company has raised $110 million.
Investors see huge potential in media and advertising, but researchers warn of fraud risks. ElevenLabs confirmed earlier this year that some users exploited its tech maliciously.
The CEO said the firm will strictly monitor unauthorized voice replication, though many celebrities worry about their voices being stolen.
AI voice technology is highly practical—but carries serious fraud risks.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.