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Good Morning Everyone! PacWest down 25% pre-market. Deposits at the bank fell 9.5% last week. Yet they told the market that same week it was not experiencing “out-of-the-ordinary deposit flows”.

I smell a lawsuit.

It was the best of times, it was the worst of times. Posterchild beneficiary of ZIRP (zero interest-rate policy), Softbank, Records $32B loss at its Vision Fund tech investment arm:

• The Japanese giant’s Vision Fund segment posted a 4.3 trillion Japanese yen ($32 billion) loss for its fiscal year ending Mar. 31 versus a 2.55 trillion yen loss in the same period a year before.

• Despite gains from exiting investments in high-profile companies like ride-hailing firm Uber, SoftBank said that it logged losses in areas including the share prices of Chinese artificial intelligence firm SenseTime and Indonesian ride-hailing and e-commerce company GoTo.

• Ultimately, Softbank’s high-flying tech investments have benefited from free money for far too long. The tide came out, some portfolio companies were swimming naked.

• After going into “defense mode” last year, Masa is now weighing up whether to stay on this course, now that artificial intelligence technology is making “dramatic progress” with the company.

Earnings Update:

• 85% of the SPX having reported EPS growth is -2.2% YoY vs. -6.7% expected (FactSet). 79% of companies have beaten EPS expectations by an average of 7%.

• Revenue growth is +3.9% YoY with net profit margin of 11.5%; margins have increased QoQ (11.3%) but are down YoY (12.2%) while remaining above the five-year average of 11.4%. FY23 is seen to deliver +2.4% revenue growth and +1.2% EPS growth

• The earnings picture is better than expected when we entered the year, but the key will be macro data where economic growth will need to be maintained to hit these earnings targets.

Headline CPI came in cooler than the other side of the pillow as the number printed 4.9% vs. expectations of 5.0%, and a high of 9.1% less than one year ago. Apr CPI ex-food and energy eased to 5.5% y/y from 5.6% y/y in Mar, right on expectations.

Rents continue to slow. Core service prices ex shelter are slowing. Most leading indicators for inflation indicate it will cool. This release suggests higher Treasury yields and inflation expectations.

This marks the ninth consecutive monthly decrease in a row – and to think it only cost us a couple of bank blowups that rattled the entire capitalist society upon which our modern financial system is built…

Trading degens rejoiced as Robinhood announced 24hr trading for stocks during weekdays. Now you can lose money during the same time your local gas station is open. They also announced earnings:

• The U.S. Federal Reserve’s rapid rate hikes boosted the online brokerage’s interest income.

• Net interest revenue nearly quadrupled to $208 million from a year earlier for Robinhood, which allows eligible customers to borrow money to purchase securities for interest.

It looks like Robinhood accidentally became an actual bank…

Google Tries to Clap Back Against Microsoft’s AI Lead (whether perceived or real):

• Google announced its new AI model, PaLM 2, which will power its leveled-up Bard chatbot. PaLM 2 was trained on academic papers and 100+ languages.

• And it may be the future of search: Instead of gathering up a bunch of links (sponsored and just plain popular), answers to queries will be written by Google’s AI and will appear at the top of the page for some searches.

• If you want to check out a really cool demo, one that Google probably should’ve done earlier, check out Sundar’s Twitter Thread – very cool

• There won’t be only one AI winner, and Google reminded everyone how long they have been working on AI and that their search product will evolve and adapt before it will become roadkill.

IRL > Streaming. Disney Tumbles Below $100 After Paying Subs Slide Following Sharp Price Increase

• EPS of $0.93 vs. est of $0.89, Revenue of $21.82B vs. est of $21.80

• Although revenue and earnings were ahead of expectations on the back of theme parks strength, shares fell in aftermarket trading on subscriber miss. Turns out hanging out with Disney’s IP IRL (in real life) is more fun than adding a fourth streaming app on your smart TV.

• Streaming losses narrowed but paid subscriptions to Disney+ FELL to 157.8M vs. expectations of 163.1M. All eyes are on the big bets that Chapek made, and if Iger can fix them.

$10.6B Lithium Deal Creates World’s No. 3 Producer:

• Australian lithium miner Allkem Ltd. agreed to merge with US rival Livent Corp. in an all-stock deal that will create a $10.6 billion producer, as the sector continues consolidating amid surging demand for batteries used in electric vehicles.

• The combination will create a lithium producer with mines in Argentina and Canada with output equivalent to about 7% of global supply in 2023.

📊 Here are some of yesterday’s highlights:

TTD 0.57%↑ The Trade Desk Reported Solid Earnings After the Close:

• EPS of $0.23 ahead of expectations of $0.13

• Revenue of $383M grew 21% YoY topping estimates of $364M

• EBITDA came in at $109M, up28% YoY and ahead of estimates of $79M

• Based on the outlook, “Trade Desk seems unfazed by the upheaval in the digital-ad marketplace”

• “The company has capitalized on the shift to connected TV from linear,” and it “benefits from strong execution as it positions itself as a leading demand-side platform”

👀 What we’re watching today:

• $JD Jd.com – American Depositary Shares

• $BN Brookfield Class A Limited Voting Shares

• $ING Ing Groep

• $SLF Sun Life Financial

• $PKI Revvity

• $NICE Nice – American Depositary Shares Each Representing One Ordinary Share

• $ENTG Entegris

• $GEN Gen Digital

• $NWS News – Class B

• $NWSA News – Class A

• $CRL Charles River Laboratories International

• $TPR Tapestry

• $USFD US Foods Hldg

• $PSNY Polestar Automotive Holding Uk Limited – Class A Ads

• $SBS Companhia De Saneamento Basico Do Estado De Sao Paulo – Sabesp American Depositary Shares (Each Repstg 250 Common Shares)

• $AQN Algonquin Power & Utilities Corp. Common Shares

• $CYBR Cyberark Software Ltd. –

• $HAE Haemonetics

• $YETI Yeti Holdings

• $ATHM Autohome American Depositary Shares Each Representing Four Class A Ordinary Shares.

• $SANM Sanmina

• $OLK Olink Holding Ab (Publ) – American Depositary Shares

• $NVMI Nova Ltd. –

• $GETY Getty Images Holdings Class A

• $DNUT Krispy Kreme

Full earnings here.

CDS: Hedge Funds Drive Credit Suisse CDS Higher on Bets of a Payout

Adani Woes: Adani Enterprises to Weigh Stock Sale Months After Short-Seller Turmoil

Shuffle at the Top: BlackRock Overhauls Leadership of Credit, Private Asset Business

EU Gas Drama Continues: European Gas Prices Fluctuate Amid Worries About Abnormal Heat

Softbank: SoftBank Vision funds post record $39bn annual loss

Disney vs. The State of Florida: Disney’s Bob Iger taunts Florida with an ominous threat: ‘Does the state want us to invest more, employ more, and pay more taxes — or not?’

Climate: BNP Paribas to stop funding new gas projects as litigation risk mounts

Debt Ceiling: Biden Dials Up Pressure: ‘World Is in Trouble’ If We Default

FTX vs. IRS: U.S. Internal Revenue Service Files Claims Worth $44 Billion Against FTX Bankruptcy

Price Action: Bitcoin Dips Below $27K, Reversing Post-CPI Rally

Liquidity Issues: Bitcoin Liquidity on the Brink as Market Makers Pare Back in Crypto Markets

Regulation: US House builds consensus toward crypto action, but visions still differ

Circle: Circle Backs USDC With Shorter US Treasurys, Worries US Government Will Default

Check out GritCRYPTO for more.

• Lithium: $10.6 Billion Lithium Deal to Create World’s No. 3 Producer

• Health: Elliott Consortium to Acquire Syneos Health for $4.4 Billion

• Biopharma: Sweden’s Sobi to Buy CTI Biopharma for $1.7 Billion

• Software: Software AG Snubs €2.5 Billion Bain Bid for Lower Offer

• Antitrust: Big Tech Has Formidable Foe in Britain’s Antitrust Watchdog After Microsoft Blow

Sadly, this wasn’t even meant to be a meme and was actually released by the company…

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