Summary

Major indexes closed lower Thursday, reversing earlier gains. Inflation eased, hinting at possible Fed rate cuts. Biden Administration announced new tariffs on Chinese goods, increasing trade tensions. Meme stocks surged and fell back, with AMC raising $250 million. Berkshire Hathaway revealed a $6.7 billion stake in Chubb. Ilya Sutskever left OpenAI to pursue other work.

For those who read...

In stock market news: 

• All three major indexes closed a drop down on Thursday, reversing gains from earlier this week and down from the all-time highs of last week. The Dow briefly broke 40,000 for the first time, but ended up down along with the rest. Despite the historic accomplishment for the Dow, it doesn’t mean much for your every day investor, who’s portfolios generally don’t coincide with the index.

In general business news: 

• Economic data released on Wednesday showed that inflation eased last month, suggesting we might see a Fed rate cut despite high inflation reports from the first quarter. Core CPI, excluding volatile food and energy prices, rose 3.6% year-over-year, the smallest increase since April of 2021, and the slowest growth we’ve seen there in six months. Positive signs include a slight drop in grocery prices, slower increases in health and car insurance costs, and steady consumer spending. Also notable, rents grew at their slowest rate in nearly two years, hinting at potential future price declines.
• While easing inflation makes rate cuts possible, their likelihood hinges on next month's CPI report. Analysts now expect only two rate cuts this year, down from their earlier projection of six, with the first not expected until September.
• Separately, this past week the Biden Administration announced huge new tariffs on Chinese electric vehicles and other goods. The tariffs on Chinese EV imports will increase from 25% to 100%, aiming to protect American manufacturers from low-cost Chinese products. Additionally, tariffs on minerals, solar cells, and batteries from China will be raised, which critics argue could hinder US climate goals. Beijing criticized the move, calling it "typical political manipulation," according to a statement from China's Ministry of Commerce. No matter your stance, it represents a significant escalation in the US-China trade war.

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‍Moving into some stories from the Corporate World:

• Meme stocks are back! Kind of! Thanks to the notorious Roaring Kitty, Gamestop jumped from about $10 per share all the way to a high of nearly $65 per share on Tuesday, although it’s fallen back down towards $30 per share now. While AMC jumped from $3 to nearly $12 this week, and similarly has now fallen back to about $5 per share. At least AMC capitalized on the hype, selling 72.5 million shares to raise $250 million in new capital. While it isn’t quite the $4.6 billion dollars of debt they have, it’s a start.
• Sorry to keep harping on Warren Buffet, but on Wednesday, Berkshire Hathaway revealed the confidential stock they’ve bought a $6.7 billion dollar stake into. The insurance company, Chubb. The property and casualty insurer is now Berkshire’s ninth biggest holding after they’ve secretly bought nearly 26 million shares over the past three quarters.
• Ilya Sutskever, co-founder and now-former chief scientist at OpenAI has left the company to pursue other work. While he was a part of the bid to oust CEO Sam Altman, Altman called him a dear friend and only had kind words to say about him. Ilya noted he’s confident Open-AI will build AI that is “safe and beneficial.”

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‍That's all for this week's Business Column. Stay tuned for more updates next week and let us know if you found this useful by texting us back! Have a great Friday and weekend and thanks for listening.

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Bulletin Brief

Dow’s historic passing of 40,000 (AP)

General stock market news (Edward Jones)

Economic data report (Reuters) (Yahoo Finance) (Axios) (CNN)

Warren Buffet’s secret stock pick (CNBC)

Meme stock rally falls apart (Reuters)

AMC Stock (Google Finance)

Gamestop Stock (Google Finance)

Biden’s EV Tariff (WSJ)

Open-AI co founder leaves (Techcrunch)