—— April CPI Data Supports Rate Cut; Netflix Buys NFL Games Streaming Rights; US Homebuilder Sentiment Drops; Biden, Trump to Debate Live Twice; OpenAI Rival Hires Instagram Founder; JBS to Commercialize Biogas; China Considers Buying Back Unsold Homes
1. April CPI Data Supports Rate Cut
The consumer price index (CPI) rose by 0.3% in April compared to March, slightly below the forecast. The core CPI, which excludes food and energy, matched the median estimate at 0.3%, marking the smallest monthly increase in core CPI so far this year. Annually, core CPI rose by 3.6%, the smallest gain in three years.
Housing costs remain the largest contributor to inflation, while motor vehicle insurance continues to rise at the fastest annual rate since 1976. Medical care costs also increased. In contrast, prices for used vehicles, airfares, and household furnishings declined.
Retail sales for April were weaker than expected, with the headline figure unchanged from the previous month. The “control group” figure, which factors into GDP, fell by 0.3%, with March figures also revised lower. This report indicated a loss of momentum in consumer spending at the beginning of the second quarter.
Economists suggested that the softer data supports potential interest rate cuts by the Federal Reserve later this year. Interest-rate futures indicated growing confidence in two rate reductions by the end of 2024.
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2. Netflix Buys NFL Games Streaming Rights
Netflix Inc. is finalizing a deal to secure exclusive rights to stream two National Football League games on Christmas Day, according to sources familiar with the matter. This move represents a significant advancement in Netflix’s foray into live programming.
The agreement would be a landmark for Netflix, marking the first time it has licensed rights to a premier sports competition and the first instance of streaming live football, the most popular sport in the US. The company is expected to pay less than $150 million per game, according to the sources, who requested anonymity due to the confidentiality of the terms. Both Netflix and the NFL declined to comment. The NFL plans to announce its 2024-25 schedule on Wednesday.
Netflix has been experimenting with live programming over the past year to broaden entertainment options for its customers and create attractive properties for advertisers. Sports, being the most valuable live programming globally, represents a significant opportunity in this area.
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3. US Homebuilder Sentiment Drops
US homebuilder sentiment declined in May for the first time in six months, as mortgage rates above 7% kept buyers on the sidelines and dampened expectations.
The National Association of Home Builders/Wells Fargo index of housing market conditions dropped by 6 points to 45 in May, marking the lowest level since the beginning of the year. This month’s reading was below all economists’ estimates in a Bloomberg survey, which had a median forecast of 50.
The measure of builders’ sales outlook for the next six months fell by 9 points, the most significant drop since October 2022, reaching 51.
“A lack of progress on reducing inflation pushed long-term interest rates higher in the first quarter, and this is acting as a drag on builder sentiment,” said NAHB Chief Economist Robert Dietz in a statement. “The last leg in the inflation fight is to reduce shelter inflation, and this can only occur if builders are able to construct more attainable, affordable housing.”
The NAHB gauge of prospective buyer traffic slipped by 4 points to 30, the lowest since January, while the measure of current sales fell for the first time since November.
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4. Biden, Trump to Debate Live Twice
President Joe Biden and Republican Donald Trump announced they will debate each other twice in the upcoming months, with their first televised face-off of the 2024 campaign scheduled earlier than expected.
On Wednesday, Biden posted on X, formerly Twitter, that he “received and accepted” an invitation from CNN to debate Trump on June 27. Trump’s campaign later confirmed his attendance. CNN stated the event will occur at 9 p.m. New York time at their Atlanta studios in swing-state Georgia.
Both candidates also accepted invitations from ABC for a second debate on September 10, which the Biden campaign mentioned will also be broadcast from ABC’s studios.
This decision removes uncertainty about whether Biden and Trump would debate on stage before the November election. While TV debates have been a staple of US presidential campaigns, Biden and Trump had previously hesitated to commit to the schedule and terms set by the non-partisan Commission on Presidential Debates, which has managed these events since 1988.
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5. OpenAI Rival Hires Instagram Founder
Artificial intelligence startup Anthropic has hired Instagram co-founder Mike Krieger as its new product chief, as part of a broader effort to expand its AI services to more users and businesses.
Krieger, who previously served as chief technology officer at Meta Platforms Inc.-owned Instagram, will oversee Anthropic’s product engineering, product management, and design functions, the company announced in a blog post on Wednesday. He will help “expand our suite of enterprise applications and bring Claude to a wider audience,” according to the post.
Founded by ex-OpenAI employees in 2021, Anthropic has positioned itself as a major competitor to ChatGPT’s creator by emphasizing responsible AI development. Like OpenAI and other AI firms, Anthropic is increasingly focused on selling its chatbot, Claude, to businesses to monetize the emerging technology.
“Mike’s background in developing intuitive products and user experiences will be invaluable as we create new ways for people to interact with Claude, particularly in the workplace,” said Dario Amodei, co-founder and chief executive officer of Anthropic, in the blog post.
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6. JBS to Commercialize Biogas
JBS SA, the world’s largest meat producer, announced it is in “final discussions” with a potential strategic partner to assist the Brazilian company in managing, expanding, and monetizing the production of gas from animal waste in the US.
“We’re interested in bringing in expertise to help transform and manage our generation of biogas and expand our capacity to really create this as a strategic asset,” said Jason Weller, global chief sustainability officer at JBS, during a presentation at the BMO Global Farm to Market conference in New York.
This move highlights how companies across various industries are looking to capitalize on President Joe Biden’s landmark clean-energy initiative, which offers substantial subsidies for all forms of clean energy.
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7. China Considers Buying Back Unsold Homes
China is considering a proposal for local governments nationwide to purchase millions of unsold homes, according to sources familiar with the matter. This would be one of the country’s most ambitious efforts yet to rescue its struggling property market.
The State Council is seeking feedback from several provinces and government entities on the preliminary plan, said the sources, who requested anonymity due to the private nature of the discussions. While China has previously tested various pilot programs to reduce excess housing inventory with state funding, this new plan would be much larger in scale.
According to two sources, local state-owned enterprises would be tasked with buying unsold homes from distressed developers at significant discounts using loans provided by state banks. Many of these properties would then be converted into affordable housing.
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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.