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Happy Monday! Let’s have a great week:
👉 Japan avoids a technical recession
👉 Reddit officially files its IPO
👉 Biden will unveil his budget today
JAPAN: Avoids Recession
Japan dodged a recession with modest economic growth in the last quarter, driven by business investments. However, they still fell short of expectations. Consumer spending remained low, fueling speculation about the Bank of Japan potentially raising interest rates due to wage increases. The economy grew by 0.4% year-over-year, less than the 1.1% forecasted, and showed a minimal quarter-over-quarter growth of 0.1%. This highlights Japan's fragile recovery, especially as high inflation impacts domestic demand.
Source: Reuters
Amidst these developments, the Bank of Japan is anticipated to take a more cautious approach to its economic outlook, particularly regarding consumer spending and manufacturing, in its upcoming policy meeting. This cautious stance reflects the ongoing challenges Japan faces in achieving a stable and robust economic recovery.
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REDDIT: Officially Files
Reddit officially files its IPO to raise $748 million, targeting a $6.5 billion valuation. It will offer about 22 million shares priced between $31 and $34. Additionally, Reddit has reserved 1.76 million shares for early users and moderators, who can sell their shares immediately after the IPO, bypassing the usual six-month lock-up period.
Source: MarketWatch
The company warns that this could lead to more fluctuation in its stock price. Reddit aims to list on the New York Stock Exchange with the ticker "RDDT." This IPO is notable as it's the first major tech and social media IPO since Pinterest in 2019. In 2021, Reddit sought a $10 billion valuation after raising $1.3 billion. Its 2023 sales were $804 million, a 20% increase from the previous year, though it reported a $90.8 million loss, an improvement over the prior year's loss.
BIDEN: Budget Talks
President Joe Biden's 2025 budget proposal, set to be released today, will include plans to increase taxes on the wealthiest individuals and large corporations. These ideas are carried over from his previous budget and are currently being discussed in Congress. Biden's budget is largely symbolic, aiming to showcase his economic policies for his reelection campaign, especially as he faces a potential rematch with Donald Trump.
Source: WSJ
The budget seeks to reduce the federal deficit by $3 trillion over ten years by imposing higher taxes on the richest households and revamping corporate taxes. It also plans to strengthen Medicare and Social Security, partly through new rules for negotiating Medicare drug prices.
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