Are the Magnificent Seven now the Fab Four?

Are the Magnificent Seven now the Fab Four? Apple, Tesla, and Alphabet shares have all sputtered in the first three months of the year, but the S&P 500 still turned in its best Q1 since before covid-19 became a household word. Nvidia, Meta, Microsoft, and Amazon have left the other three behind, with some analysts now dubbing them the Fab Four as their share prices keep appreciating, the WallStreetJournal notes.

SIGN OF THE TIMES #1- Everyone from Citadel’s Ken Griffin to Bloomberg Economics is raising flags that US borrowing is “on an unsustainable path.”

SIGN OF THE TIMES #2- Donald Trump’s media company has lost 8% of its value since Monday as “the fervor around the company’s debut on public markets last week appeared to subside.” The New York Times goes deeper into why the valuation still — like much of US politics right now — just doesn’t make sense.

(Speaking of Trump: He posted a USD 175 mn bond on Monday in a civil case, narrowly avoiding the seizure of some of his assets.)

MEANWHILE- The bloom is still off the rose for venture capital, where institutional investor interest peaked in 2021, about a year before the US Federal Reserve took the wind out of the asset class’ sails with the first of a series of interest rate hikes. The lastest sign: New York’s Tiger Global raised just USD 2.2 bn for its sixteenth fund. It had aimed to raise USD 6 bn when it started lining up commitments from limited partners in late 2022.

AND- Carmakers and industry analysts are worrying that the global slowdown in demand for electric vehicles could be more than a blip. “If prices do not fall, or legitimate [consumer] concerns over charging infrastructure are not met, motorists may resist indefinitely. The implications of the second are potentially concerning. Meeting long-term decarbonisation targets without removing all petrol and diesel cars from the roads is impossible,” notes the Financial Times ’ Peter Campbell in an Insider Business column. Will politicians look to use other levers to stimulate demand, from higher fuel prices to sharp taxes on petrol-powered cars?

PLUS- Tesla has taken back the title as the world’s top EV producer after the Chinese EV market leader BYD reported a 43% drop in sales to 300k EVs in the first quarter of the year.

THE MARKETS THIS MORNING-

Asian markets are solidly in the red this morning, with CNBC blaming poor sentiment on electric vehicles after Tesla said yesterday it had missed delivery targets. The decline in deliveries was worse than analysts had expected. Three listed Chinese automakers, including market leader BYD, led the decliners. The sea of red extends to Europe and on Wall Street, where stock futures edged down overnight.

THE CLOSING BELL-

The EGX30 fell 1.3% at yesterday’s close on turnover of EGP 3.1 bn (38.1% below the 90-day average). Foreign investors were net buyers. The index is up 12.2% YTD.

In the green: Sidi Kerir Petrochemicals (+3.8%), AMOC (+2.8%), and Alexandria Containers and Cargo Handling (+2.8%).

In the red: GB Corp (-6.4%), Orascom Development Egypt (-4.8%), and E-finance (-4.5%).

CORPORATE ACTIONS-

#1- Rakta winds up: Struggling state-owned paper manufacturer General Company for Paper Industry’s (Rakta) extraordinary general assembly approved insolvency proceedings for the company and moved forward with assessing and liquidating the company’s assets, the company said in a bourse disclosure (pdf).

#2- EgyTrans dividend payout delayed: EgyTrans’ ordinary general assembly has decided to push paying out dividends on its 2023 earnings to shareholders to 2Q 2024, the transport and logistics company said in an EGX disclosure (pdf).