—— Apple in Talks to Use Baidu AI; Cocoa Price Doubles Within Months; Nike Drops on Weak Revenue Forecast; Health Chain Auna Falls 21% After IPO; Stellantis to Cut 400 Jobs; Bitcoin Traders Prepare for a Deeper Slump; MTA to Vote on Congestion Pricing Fee

1. Apple in Talks to Use Baidu AI

According to a report by the Wall Street Journal, Apple Inc. has been in discussions with Baidu Inc. regarding the potential use of Baidu’s generative artificial intelligence in iPhones and other devices within China. This development could represent a significant partnership for Baidu, a leading domestic search provider in China.

The discussions have involved the integration of Baidu’s generative AI technology into Apple’s devices, as reported by sources familiar with the matter cited by the Journal. Apple sought a local partner like Baidu because Chinese regulators require approval for all AI models used in the country, the newspaper added. Baidu’s shares, traded in the US, saw little change in New York on Friday morning, having earlier risen about 5% following the news.

Baidu is recognized as one of the leaders in AI in China, where both startups and tech giants are heavily investing in developing their own AI solutions.

Notably, foreign services like ChatGPT by OpenAI are not accessible in China’s tightly regulated online environment.


2. Cocoa Price Doubles Within Months

The chocolate industry is currently facing significant challenges due to shortages and soaring prices of cocoa, its main ingredient, with the situation being described as one of panic by the head of Guan Chong, one of the world’s largest cocoa processors.

Cocoa prices have been skyrocketing, reaching new records almost daily. Prices have already doubled since the beginning of the year, surpassing $8,500 a ton, with $10,000 becoming a realistic possibility. Poor harvests in West Africa, caused by factors such as drought and disease, are the main drivers of these price increases. However, decades of underinvestment and inadequate support for millions of impoverished farmers have also played a role.

To address the shortage, Malaysia’s Guan Chong is actively seeking cocoa from around the world and is willing to pay premiums to source beans from smaller growers.


3. Nike Drops on Weak Revenue Forecast

Nike Inc. issued a warning, stating that its sales will suffer due to increased competition from emerging running-shoe brands like On and Hoka. These brands have highlighted Nike’s reliance on classic basketball models such as the Air Force 1.

The world’s largest sportswear retailer anticipates a low-single-digit percentage decline in revenue during the first half of its fiscal year, beginning in June. This forecast contrasts sharply with analysts’ projections, which had anticipated a 4% rise in the first quarter and a 6% gain in the second, according to estimates compiled by Bloomberg.

Following this announcement, Nike shares dropped by 7.5% at 9:42 a.m. on Friday in New York, contributing to a 16% decrease over the past 12 months.


4. Health Chain Auna Falls 21% After IPO

Auna SA shares plummeted by 21% on Friday following the Latin America-focused health-care services provider’s US initial public offering (IPO), which raised $360 million but priced below the marketed range.

Shares opened at $9.51 each, significantly lower than the IPO price of $12. Auna operates hospitals and clinics in Mexico, Peru, and Colombia, and it plans to utilize $350 million of the proceeds to repay financing related to an acquisition in 2022, as outlined in its filings.

During the IPO, the company sold 30 million shares at $12 each, below the initial marketing range of $13 to $15 per share.


5. Stellantis to Cut 400 Jobs

Stellantis NV, the manufacturer of Jeep and Ram vehicles, is reducing approximately 400 white-collar positions in the United States as it endeavors to transition its product lineup towards electric cars.

The decision impacts roughly 2% of the automaker’s engineering, technology, and software staff in the US. Stellantis conveyed this information in an emailed statement on Friday, stating that the cuts will be effective from March 31.

The company stated, “As the auto industry continues to face unprecedented uncertainties and heightened competitive pressures around the world, Stellantis continues to make the appropriate structural decisions across the enterprise to improve efficiency and optimize our cost structure.”

Following Thursday’s announcement, the value of sterling declined against the dollar, trading down 0.4% on the day at $1.273.


6. Bitcoin Traders Prepare for a Deeper Slump

Traders appear to be preparing for a prolonged downturn in Bitcoin, as demand for US exchange-traded funds holding the cryptocurrency begins to diminish.

In the past 24 hours, Bitcoin put options expiring on March 29 have surpassed call options in volume. This has pushed the put-to-call ratio higher, indicating a bearish sentiment in the short term. Data from crypto options exchange Deribit shows that put options are concentrated around strike prices of $50,000 and $45,000. As of Friday, Bitcoin was trading around $63,500.

David Lawant, head of research at crypto prime broker FalconX, noted that the market correction is largely influenced by heavy outflows from the Grayscale Bitcoin Trust (GBTC).


7. MTA to Vote on Congestion Pricing Fee

The Metropolitan Transportation Authority (MTA) in New York is moving forward with plans to implement the US’s first-ever congestion pricing toll. According to sources familiar with the transit agency’s plans, the MTA intends to hold a vote next week on the new fees.

Congestion pricing will involve charging motorists a toll for driving into Manhattan’s central business district, located south of 60th Street. The tolls could be implemented as early as mid-June. The MTA aims to utilize the estimated $1 billion in annual revenue generated from the tolls to modernize subway signals, increase the number of elevators in stations, and extend the Second Avenue subway into Harlem.

The vote on congestion pricing is expected to be included in the MTA’s monthly board meeting scheduled for March 27, according to the sources. They declined to provide further details publicly since the meeting agenda has not yet been made public.


The content of this article comes from various financial news media such as The Wall Street Journal, Financial Times, and Bloomberg.