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- Udemy | June 5th, 2024
Udemy | June 5th, 2024
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Today's insights are courtesy of Udemy, all the skills you need in one place. From critical skills to technical topics, they support your professional development.
| Market | Day | Month | Year |
|---|---|---|---|
| Dow | ▲0.36% | ▼0.49% | ▲14.21% |
| S&P | ▲0.15% | ▲2.74% | ▲23.36% |
| Nasdaq | ▲0.17% | ▲3.83% | ▲27.12% |
| Bitcoin | ▲1.56% | ▲7.44% | ▲167.15% |
| 10-Year | ▲0.55% | ▲0.68% | ▼3.91% |
GOOD MORNING
Here's everything you need to know today: The markets were a circus on Monday when a technical glitch on the NYSE caused Berkshire Hathaway shares to plummet to a mere $185, a 99% discount, attracting bargain hunters. However, the NYSE quickly stepped in to cancel these too-good-to-be-true trades, maintaining market integrity.
In other news, Representative Thomas Kean Jr. of New Jersey has made headlines with his recent investment in Illumina, a leading DNA sequencing company. Despite a 15% decline in Illumina's stock since his purchase, Kean's role on the House Committee on Science, Space, and Technology has raised questions about potential conflicts of interest.
Adding to financial sector concerns, the FDIC reported a significant rise in unrealized losses within the US banking system, totaling $516.5 billion. This increase, driven by higher mortgage rates and residential real estate market exposure, underscores the heightened financial and operational challenges banks face today.
Let’s dive into more detail below.
MARKET
Berkshire Hathaway's 99% Discount Debacle Backfires for Buyers and a Possible Warning Shot for Future AI-Powered Financial Markets
The CTA faces urgent pressure to implement even stricter security measures, regulations, and monitoring new, possibly AI-powered systems for trading
BREAKING NEWS
The markets were a circus on Monday. A technical glitch on the NYSE sent Berkshire Hathaway shares plummeting to a mere $185, a 99% discount, with bargain hunters seeing dollar signs.
Investors who thought they had gotten the deal of a lifetime soon found their dreams of striking it rich squashed as the NYSE stepped in to cancel these "too good to be true" trades.
WHAT HAPPENED
This glitch, attributed to a software issue at the Consolidated Tape Association (CTA), lasted approximately 90 minutes and impacted other companies, such as Chipotle, Barrick Gold, and GameStop.
While the exact number of trades executed at the discounted price remains unknown, the NYSE acted swiftly, announcing the cancellation of all Berkshire Hathaway trades below $603,718.30 per share.
The ticker problem did not impact Berkshire Hathaway's Class B Stock (BRK.B), and its Class A stock closed at more than $631,000 a share.
While disappointing to opportunistic traders, this event ultimately points to maintaining market integrity and preventing undue advantage from this consistent technical anomaly.
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POLITICAL TRADING
Rep Thomas Kean Jr. of New Jersey Buys Struggling DNA Stock, Sits on Science and Technology Committee
Despite a 15% decline, Kean's Illumina investment raises questions due to his committee's oversight role
BREAKING NEWS
Representative Thomas Kean Jr. from New Jersey's 7th congressional district recently disclosed his purchase of Illumina stock, a leading DNA sequencing company.
Despite the stock's 15% decline since the purchase over a month ago, this investment decision has garnered significant attention, considering he sits on the House Committee on Science, Space, and Technology.
WHAT HAPPENED
Representative Thomas Kean Jr., a House Committee on Science, Space, and Technology member, disclosed a purchase of Illumina stock ranging from $1,001 - $15,000 on April 19th, 2024.
Illumina, renowned for its advancements in DNA sequencing technology, has seen its stock fall by about 15% since Kean invested over a month ago. This significant drop has raised questions about the timing and, more importantly, the rationale behind the purchase.
While the trade has yet to be profitable for Kean, the long-term outlook for Illumina remains a topic of interest. The disclosure has also brought potential conflicts of interest to light, given Kean's influential position on a committee that oversees non-defense federal scientific research and development activities.
BANKING
FDIC Reports $516.5B in Unrealized Losses in US banking System as Mortgage Rates Rise and No Signs of Rate Cuts Until September
The number of banks on the FDIC's Problem Bank List rose from 52 in the fourth quarter of 2023 to 63 in the first quarter of 2024, reflecting heightened financial and operational challenges
BREAKING NEWS
The Federal Deposit Insurance Corporation (FDIC) reported a sharp rise in unrealized losses within the US banking system totaling $516.5 billion, $38.9 billion higher than the previous quarter.
This increase, primarily due to higher mortgage rates and residential real estate market exposure, marks the ninth consecutive quarter of unusually high losses since the Federal Reserve began raising interest rates in early 2022.
WHAT HAPPENED
According to the FDIC's latest Quarterly Banking Profile report, banks are grappling with more than $517 billion in unrealized losses, a $39 billion increase from the previous quarter. These losses stem from the difference between the purchase price of securities and their current market value, particularly affecting residential mortgage-backed securities.
The sustained rise in mortgage rates, ranging from 7% - to 6% 30Y/15Y, has put downward pressure on these securities' prices, further exacerbating the situation. Although banks can hold these securities until maturity without marking them to market, the need for liquidity can transform these paper losses into significant liabilities.
The number of banks on the FDIC's Problem Bank List rose from 52 in the fourth quarter of 2023 to 63 in the first quarter of 2024, reflecting heightened financial and operational challenges.
There has been one bank failure so far in 2024. Republic First Bank, based in Philadelphia, Pennsylvania, failed on April 26, 2024. The bank had approximately $6 billion in assets and $4 billion in deposits.
YESTERDAY | Here’s what you missed |
1. Poppi soda is falsely advertising its health benefits, lawsuit claims
A San Francisco resident has filed a lawsuit against Poppi, a popular prebiotic beverage brand, alleging that the company is misleading consumers about its health benefits and potentially harming long-term health. The lawsuit challenges the accuracy and honesty of the brand's marketing practices.
2. Google’s Privacy Chief Is Out And Will Not Be Replaced
Keith Enright, Google's Chief Privacy Officer, is leaving the company after 13 years. In the wake of his departure, Google is restructuring its privacy and compliance teams. Additionally, Matthew Bye, the director of competition law, is also exiting the company.
3. Spotify is hiking its prices again
Spotify is set to increase its prices once more, less than a year after the last price hike. This change will affect most of its subscription plans, potentially impacting millions of subscribers.
4. Microsoft to initiate layoffs, Google reportedly to follow suit
Microsoft has confirmed it will reduce its workforce, and reports indicate Google may soon follow with similar layoffs. This development is part of a broader trend of downsizing in the tech industry.
5. India shares plunge on concerns of a narrower win for India’s Modi
Indian stock indexes experienced their largest intraday fall since March 2020 due to concerns over a potentially narrower victory for Prime Minister Narendra Modi in upcoming elections. This uncertainty has significantly impacted investor sentiment.
6. Nvidia CEO to increase investment, build 2nd supercomputer in Taiwan
Nvidia, the world's most valuable chipmaker, announced plans to increase its investment in Taiwan by building a second supercomputer. Despite its partnership with TSMC, Nvidia remains interested in Intel's services.
7. Job openings fell again in April, hitting lowest level since February 2021
Job openings in the U.S. declined more than expected in April, reaching their lowest level since February 2021. This trend signals a potential weakening of the labor market, raising concerns about economic stability.
8. Today's mortgage rates fall for 30-year terms while 15-year terms hold steady
Mortgage rates for 30-year terms have decreased, while 15-year terms remain unchanged. These fluctuations are influenced by current economic conditions, impacting potential homebuyers and the housing market.
9. Toyota to recall 100,000 vehicles over risk of stalled engines
Toyota is recalling 100,000 vehicles due to a risk of stalled engines. The National Highway Traffic Safety Administration reported that debris in the trucks' V35A engines could lead to a loss of drive power, prompting the recall.
10. Ford EV and hybrid sales surge 65% in May
Ford has reported a significant increase in sales for May, with a 65% rise in both electric and hybrid vehicle sales. This surge highlights the growing consumer demand for environmentally friendly vehicles.
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Today's insights are courtesy of Udemy, they are an online learning platform offering a wide range of courses across various fields, designed to help individuals and organizations achieve their personal and professional goals through flexible, self-paced learning.
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