Stocks were down on Wednesday as debt ceiling negotiations stalled and the Federal Reserve’s latest policy meeting minutes showed officials divided on the direction of interest rates. Investors are concerned that a possible default could cause chaos in financial markets, and the rising volatility index is a sign of unease. GDP reading, earnings from retailers such as Costco, Dollar Tree, and Gap, and Workday’s report are all expected to affect markets tomorrow.
Author: fortraders
Biden Administration Asks Supreme Court to Decline Apple-Caltech Patent Dispute
By Blake Brittain
The U.S. Solicitor General has urged the Supreme Court to reject an appeal by Apple Inc and Broadcom Inc stemming from their $1.1 billion trial loss to the California Institute of Technology in a patent infringement case. The companies had argued that they should have been allowed to challenge the patents’ validity at trial, but the Federal Circuit upheld the decision to bar the invalidity arguments because Apple previously could have raised them in its petitions for Patent Office review of the patents.
The Solicitor General said in her Tuesday brief that the Federal Circuit interpreted the law correctly. Caltech has also sued Microsoft Corp, Samsung Electronics Co, Dell Technologies Inc and HP Inc for infringing the same patents in separate cases that are still pending.
A jury in 2020 ordered Apple to pay Caltech $837.8 million and Broadcom to pay $270.2 million. The Federal Circuit took issue with the amount of the award and sent the case back last year for a new trial on damages, which is yet to be scheduled.
The companies told the justices that the Federal Circuit misread the law, which only bars arguments that could have been raised during the review itself. However, the Solicitor General’s filing suggests that the Supreme Court is unlikely to overturn the Federal Circuit’s ruling.
Investigation into Trading Practices of Ex-Employees of First Republic by US Prosecutors – Bloomberg Law
The investigation is focused on whether the employees traded on non-public information about the bank’s financial health, the report said. The U.S. Attorney’s Office for the Southern District of New York is leading the investigation, according to the report.
First Republic Bank’s stock has plummeted more than 10% since the news broke. The bank has been struggling with a surge in loan defaults due to the coronavirus pandemic. It has also been hit by a series of lawsuits from investors who allege the bank misled them about its financial health.
The bank has said it is cooperating with the investigation and that it has “robust policies and procedures in place to ensure compliance with all applicable laws and regulations.” It has also said it is committed to “maintaining the highest standards of ethical conduct.”
The investigation is a reminder of the importance of compliance with insider trading laws. Companies must ensure that their employees are not trading on non-public information, as this could lead to serious legal and financial consequences.
Airbus Delays Launch of New A220 Jet Sub-Model
Airbus has confirmed that it is not looking to launch a stretched version of its A220 jet in the current environment. Speculation of an imminent launch at the Paris Airshow circulated on Wednesday after a Bank of America note suggested it would be announced there. However, an Airbus spokesperson said that the A220-100 and A220-300 are priority and they are not looking to launch a new sub-model in the current environment.
A larger version of the A220 program, acquired from Bombardier in 2018, would help lower total production costs but eat into a market currently served by the 150-seat A320neo. Most industry sources expect an A220-500 launch to be closer to the middle of the decade. Airbus CEO Guillaume Faury has indicated that resolving industrial delays is the planemaker’s top priority amid continued pressure on small suppliers.
Swedish Infantry Fighting Vehicles Approved for Government Purchase of 246 Units
The Czech Republic has taken a major step towards modernizing its military with the approval of the purchase of 246 CV90 tracked infantry fighting vehicles from Sweden. The 59.7 billion CZK agreement is the largest army purchase in the modern history of the Czech Republic and one of the largest state contracts ever.
In addition to the CV90 purchase, the Czech Republic is also entering into negotiations with Germany about the joint purchase of about seven dozen new 2A8 Leopard battle tanks. This move is part of the Czech Republic’s effort to modernize its military and ensure its security in the face of an increasingly uncertain geopolitical landscape.
Prince Edward Visits Prague for Meeting with Czech President
Prince Edward, currently the 13th in line to the British throne, has arrived in Prague for a three-day visit. On Tuesday, he was welcomed by Czechia’s President Petr Pavel at an informal meeting in Malostranska beseda, a popular restaurant in Prague’s Old Town district. The two enjoyed a glass of beer and discussed topics such as the challenges faced by the UK and Czech Republic.
On Wednesday, the Duke of Edinburgh presented the highest, gold level of the Duke of Edinburgh Award to 42 people in Czechia. The award, which is aimed at helping young people improve, learn new skills and make friends, was first brought to Czechia in 1995.
The prince also met with more than 50 young people from across the country at the British Embassy’s garden. On Thursday, he will lay a wreath at the national memorial commemorating the victims of the so-called “Heydrichiáda”.
The visit is a testament to the strong ties between the UK and Czech Republic, and a reminder of the importance of engaging with the younger generation.
Fashion of Presidential Wives Showcased at Prague’s National Museum
The National Museum in Prague is currently hosting an exhibition called First Ladies – Fashion and Style, showcasing a unique collection of fashion items that used to belong to the wives of Czech and Czechoslovak presidents. The exhibition presents 38 outfits from twelve first ladies, including dresses, suits, hats and other accessories worn on various occasions.
Curator Miroslava Burianová explains that the exhibition aims to show the role and style adopted by the country’s first ladies. It includes items from the wardrobe of Marta Gottwaldová, the wife of the first communist president Klement Gottwald, and Hana Benešová, widely considered one of the country’s most elegant first ladies.
The exhibition also includes some of Dagmar Havlová’s theatre costumes, as well as Livia Klausová’s trouser suit and Olga Havlová’s iconic sweater. Visitors can also see the inaugural dress of the current Czech first lady, Eva Pavlová, who is being hailed as a new fashion icon.
Miroslava Burianová also points out that while some of the presidential wives enjoyed their role and frequently appeared in public by their husbands’ side, other preferred to guard their privacy. The exhibition is divided into two parts, one dedicated to the first ladies’ official duties alongside the president, the other to the semi-private sphere.
The exhibition First Ladies – Fashion and Style runs at the new building of the National Museum until the end of next April.
Committee Determines Dean Who Attended Pro-Russia Rally Breached Code of Ethics
The Ethics Committee at Prague’s University of Economics has ruled that Miroslav Ševčík, the controversial dean of the school, has violated the school’s code of ethics. The ruling comes after the university’s rector, Petr Dvořák, called for Mr. Ševčík’s removal from the faculty management, citing damage to the school’s reputation.
Mr. Ševčík made headlines in March when he attended a pro-Russian rally and was implicated in a group trying to remove the Ukrainian flag from the National Museum in Prague. Despite the Ethics Committee’s ruling, Mr. Ševčík was defended on Monday by his faculty’s own ethics commission. It remains to be seen what action the university will take in response to the ruling.
Mercedes to Compete with Tesla’s Model 3 by Introducing Electric CLA Sedan to US Market
Mercedes-Benz is making a strong commitment to electric mobility with the launch of five fully electric models and the upcoming addition of an electric CLA sedan and GLC crossover. At their North American dealer meeting, the automaker highlighted their progress and the impact of the recently unveiled EQ models on sales performance. According to a report by Electrek, Mercedes is gearing up to take on Tesla’s Model 3 with an electric CLA sedan, expected to get 400 miles of driving range and arrive in the US next year. The brand is also expected to launch an electric GLC as a successor to the EQC electric crossover. With these new additions, Mercedes-Benz is set to further strengthen their position in the luxury EV segment.
Moody’s Warns of Potential Credit Rating Action if U.S. Debt Negotiations Take a Turn
Moody’s, one of the world’s leading credit rating agencies, expects the U.S. government to continue to pay its debts on time. However, public statements from lawmakers during the debt ceiling negotiations could prompt a change in its assessments before a potential default. Moody’s currently has an “Aaa” rating for the U.S. government with a stable outlook, the highest creditworthiness evaluation Moody’s gives to borrowers.
Should the government reach the X-date without an agreement, Moody’s expects principal payments of maturing debt would not be at risk as the Treasury could auction new debt to refund old liabilities while remaining under the existing debt limit. However, interest payments would need to be prioritized to avoid a default.
Should a missed payment occur, Moody’s would downgrade the government by one notch, even in case of a brief default. Investors have to contend with this risk ahead of the June 1 deadline indicated by the U.S. Treasury to raise the government’s $31.4 debt ceiling, with Democrats and Republicans still deeply divided on how to curb the federal deficit.