Weekly Market Update - 6 May 2024
Discreet Funding
Huawei Technologies, the Chinese telecom giant blacklisted by the US, is secretly funding cutting-edge research at US universities including Harvard through an independent Washington-based foundation. Huawei is the sole funder of a research competition that has awarded millions of dollars since its inception in 2022 and has attracted hundreds of proposals from scientists around the world, according to documents and people familiar with the matter. The competition is administered by the Optica Foundation, an arm of the nonprofit professional society Optica. The findings reveal one strategy China-based Huawei is using to remain at the forefront of funding international research despite a web of US restrictions imposed in response to concerns its technology could be used as a spy tool.
Source: Bloomberg
Hikes Unlikely
The Federal Reserve signaled fresh concerns about inflation while indicating it was likely to keep borrowing costs elevated for longer. Chair Jerome Powell said it’s unlikely that the Fed’s next move would be to raise interest rates, saying officials would need to see persuasive evidence that policy is not tight enough to bring inflation back toward its 2% target. Still, Powell stopped short of signaling rate cuts were likely this year or that rates were at a peak, which he has said previously. Officials unanimously decided to leave the target range for the benchmark federal funds rate at 5.25% to 5.5% — where it’s been since July — following a slew of data that pointed to lingering price pressures in the US economy. Stocks joined Treasury gains as the Fed agreed to slow the reduction in its bond portfolio. The S&P 500 erased a gain in late trading, while US two-year yields dropped below 5% as swap traders boosted their bets on rate cuts and projected higher odds that the first move will happen in November, instead of December.
Source: Bloomberg
Apple Discussions
Apple has renewed discussions with OpenAI about using the startup’s technology to power some new features coming to the iPhone later this year, according to people familiar with the matter. The two companies have begun discussing terms of a possible agreement and how the OpenAI features would be integrated into Apple’s iOS 18. Apple also remains in discussions with Google about licensing that company’s Gemini chatbot. Meanwhile, Apple’s rivals are revamping strategies for phones and headsets to take on the iPhone maker. Meta, for example, has announced that it’s changing the name of its headset operating system to Meta Horizon OS and will offer it to any manufacturer.
Source: Bloomberg