Highlights: Stocks and bonds fell despite US inflation being lower than estimated in March and a drop from the previous month. The slide was mainly triggered by the minutes from the Fed’s March policy meeting that showed officials feared the US economy could tilt into a mild recession later this year due to the recent banking crisis.

US inflation falls to the lowest level since May 2021 (5 min read)
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The Consumer Price Index (CPI) showed that annual inflation in the US dropped to 5% in March from 6% in February, marking the ninth month of decline. Food prices also decreased for the first time since September 2020 on a monthly basis. The core CPI, which excludes food and energy, grew slightly more from last year but still inching down month-over-month. However, some economists cautioned that wage inflation, or "supercore" inflation, is still a risk factor for the Fed, and may invoke further rate hikes.

Bank of Canada maintains policy rate, continues quantitative tightening (3 min read)
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The Bank of Canada has decided to hold its key rate steady at 4.5% and maintain its policy of quantitative tightening. Although inflation is easing in many countries due to lower energy prices and normalizing global supply chains, labor markets continue to remain tight. The central bank projects weak GDP growth for Canada for the remainder of this year before gradually strengthening next year. It expects CPI inflation to fall quickly to around 3% in the middle of this year and then decline more gradually to the 2% target by the end of 2024.

Alibaba shares tumble after SoftBank reportedly sells most of its stake (2 min read)

SoftBank has sold roughly $7.2 billion worth of shares in Alibaba, leaving it with just a 3.8% stake in the company, according to regulatory filings. This represents a significant decrease from three years ago when SoftBank held almost 25% of the Chinese e-commerce giant. The sale follows a string of huge quarterly losses for SoftBank and its Vision Fund, which have been hit by a slowdown in the tech sector. Softbank was one of the early investors of Alibaba in 2000, helping the start-up at the time to become one of the world’s biggest tech companies today.

Airline stocks sink after American Airlines signals profit hit from rising labor, fuel costs (2 min read)

American Airlines forecasted first-quarter profit below market expectations due to high labor and fuel costs. This caused its shares to fall more than 8% and weighed on other major US airlines. Despite rising global travel and higher fares helping to mitigate rising costs, concerns over the sustainability of consumer demand have grown. American Airlines expect total revenue to be up about 25.5% in the first quarter from a year earlier. However, it forecasted quarterly profit per share between 1 and 5 cents compared to analysts’ expectation of 6 cents.

Roundhill Introduces First-Ever FAAMG ETF (2 min read)
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Roundhill Investments has launched the Roundhill BIG Tech ETF (BIGT), offering investors concentrated exposure to the largest and most influential US technology stocks. BIGT invests exclusively only in the "FAAMG" tech giants, which are Meta, Apple, Amazon, Microsoft, and Google. The ETF will use an equal weighting strategy and rebalance quarterly and reconstituted annually. This is a new addition to the Roundhill BIG Bank ETF (BIGB) launched recently, and the firm plans to add more “BIG” ETFs to its suite in the near future. 

BOTZ: A Bullish Trend as Artificial Intelligence Surges (3 min read)
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Investors are increasingly interested in robotics and artificial intelligence thanks to the surge in popularity of ChatGPT and Nvidia chips that enables AI. Another factor is the military use of robots, especially by China, deploying robots for warfare amid worldwide tensions rising. The Global X Robotics & Artificial Intelligence ETF (BOTZ) is an ETF that taps into this theme and so far this year it has gained 19%, outperforming the S&P 500. This article discusses BOTZ in-depth and the potential significant upside in this emerging sector.

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Thanks,
Thomas

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