—— China GDP Could Grow 5.3%; Alibaba Cuts Cloud Products Price; Blackstone Makes $10bn Acquisition; Traders See 2 Rate Cuts This Year; Amazon Eyes Record High; Ivy League Tuition Breaches $90k; Trump Media Tanks $2.8bn
1. China GDP Could Grow 5.3%
China is projected to experience a 5.3% economic expansion this year, aided by stabilization in the property sector and enhanced external demand, as stated by the ASEAN+3 Macroeconomic Research Office. This growth is expected to contribute to an overall uplift in the region’s growth.
The group based in Singapore highlighted in a report on Monday that a gradual recovery in China’s property sector, supported by ongoing policy measures, would stimulate real estate investment, thereby creating positive effects for neighboring regions.
AMRO’s forecast closely aligns with China’s official growth target of approximately 5%, which is regarded as ambitious and likely requiring additional government assistance to attain. Despite signs of improvement in early 2024, the economy still faces various challenges. According to economists surveyed by Bloomberg, China’s gross domestic product is anticipated to expand by 4.6% this year.
AMRO predicts that growth across the ASEAN nations, along with China, Japan, and South Korea, will increase to 4.5% this year from 4.3% last year.
Source: Bloomberg – China’s Economy to Grow 5.3% This Year as Property Sector Stabilizes, Report Finds
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2. Alibaba Cuts Cloud Products Price
Alibaba Group Holding Ltd. is reducing prices for its cloud customers across regions spanning from the US to Singapore, with cuts reaching up to 59%. This move mirrors significant discounts offered domestically, as the once prominent division faces challenges in defending its market share and revitalizing growth.
The decision comes amidst a surge in demand for cloud computing, particularly to support the global expansion of AI development, alongside internal restructuring efforts. CEO Eddie Wu is leading a comprehensive overhaul aimed at rejuvenating Alibaba’s core businesses, notably its ecommerce sector.
Plans for a public listing of the cloud business were scrapped in November due to difficulties in procuring high-end Nvidia Corp. chips necessary for competition, coupled with mounting competition from Tencent Holdings Ltd. and state-supported providers.
On Monday, the Hangzhou-based company implemented price reductions averaging 23% across approximately 500 cloud product specifications.
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3. Blackstone Makes $10bn Acquisition
Blackstone Inc. has sealed a deal worth approximately $10 billion for an apartment landlord, indicating the real estate investor’s confidence in the current opportune moment to invest in the property market.
In the agreement announced on Monday, Blackstone has agreed to purchase Apartment Income REIT, also known as AIR Communities, in an all-cash transaction at $39.12 per share, representing a 25% premium from the company’s closing share price of $31.35 on April 5.
The asset manager intends to inject over $400 million to enhance and fortify the company’s apartment portfolio. The acquisition will be facilitated by Blackstone Real Estate Partners X, a fund that has garnered more than $30 billion in capital.
This move marks Blackstone’s recent venture into housing investments, following its $3.5 billion deal to privatize single-family landlord Tricon earlier this year.
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4. Traders See 2 Rate Cuts This Year
Traders’ confidence in the likelihood of three quarter-point interest-rate cuts from the Federal Reserve this year is rapidly diminishing, with markets now showing a preference for just two reductions.
Based on interest-rate swaps, there’s an implication of approximately 60 basis points of US monetary easing for the year, indicating that two cuts are now considered the most probable outcome, with the first expected by September, according to Bloomberg pricing. On Friday, the probability of a third cut was still above 50%.
Treasuries, along with their counterparts, experienced declines on Monday, leading to yields across the curve reaching their highest levels of the year. The two-year rate increased by three basis points to 4.78%, while the 10-year rate approached the significant 4.5% level that some investors are monitoring closely as a critical threshold that could determine whether rates revisit the highs of last year.
In recent days, markets have been scaling back expectations for Federal Reserve interest rate cuts, as US economic data continues to show resilience and Fed officials have expressed reluctance towards the necessity for easing.
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5. Amazon Eyes Record High
Wall Street investors are at last heeding the advice that analysts have long been advocating: purchasing shares of Amazon.com Inc.
The stock of the e-commerce and cloud computing behemoth surged as high as 1.2% to $187.29 on Monday, positioning it to potentially surpass its previous closing peak of $186.57 achieved in July 2021, as reported by data compiled by Bloomberg.
While other mega-cap technology giants like Meta Platforms Inc., Microsoft Corp., and Nvidia Corp. have reached record highs in recent months, Amazon has trailed behind, recovering from a post-pandemic selloff of approximately 57%.
Amazon’s stock has traditionally been highly favored by analysts, with 67 analysts recommending investors to buy and the remaining two holding a hold-equivalent rating. However, investors have been seeking more than just analysts’ recommendations for confidence to return.
In an effort to win over investors, the company has been aggressively cutting costs and restructuring its business operations. Additionally, the increasing demand for artificial intelligence (AI) is beginning to have a positive impact on its financial performance.
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6. Ivy League Tuition Breaches $90k
The cost to attend an Ivy League school next year is surpassing $90,000.
At the University of Pennsylvania, for example, the annual cost of attendance now exceeds the median household income in the US, totaling an estimated $92,288 for tuition, fees, housing, and other expenses. Similarly, Cornell University’s expenses will exceed $92,000, while Dartmouth and Brown are both priced at over $91,000.
Despite these high figures, many students enrolled at Ivy League colleges will pay less after receiving federal and institutional aid. With an endowment of $21 billion, Penn covers costs for students whose families earn $75,000 or less. However, the continual rise in college costs follows one of the most chaotic application seasons ever, with an increasing number of prospective students across the US seeking to avoid the burden of the nation’s $1.7 trillion student debt crisis.
Families who are paying the full price for an Ivy League school could potentially be looking at a total bill exceeding $350,000 for four years of attendance.
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7. Trump Media Tanks $2.8bn
Trump Media & Technology Group Corp. has witnessed a significant decrease in value, amounting to approximately $2.8 billion, as certain retail traders who aggressively pushed up the stock last month have started to offload their positions.
The social media company, predominantly owned by former President Donald Trump, has experienced a decline of 37% since its closing price on March 26. Furthermore, the stock has dropped below the level it was trading at on March 22, when investors greenlit its merger with the blank-check firm, Digital World Acquisition Corp.
Trump Media, the owner of Truth Social, initially experienced a surge in its early days as a public company following its merger with DWAC, the former name of the shell company.
However, the stock, trading under the initials DJT, has faced challenges in maintaining the interest of individual investors who purchased shares as a means of backing the former president for his potential 2024 reelection campaign.
As the stock continues to decline, the theoretical financial gain for Trump himself has decreased by approximately $1.6 billion, now standing at roughly $2.9 billion.
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The content of this article comes from various financial news media such as The Wall Street Journal, Financial Times, and Bloomberg.