2023 | April 17

The Markets

Stocks Slightly Up

Except for a modest rally on Thursday, the major U.S. stock indexes traded in a narrow range for the second week in a row. The S&P 500 and the Dow both added around 1% to record their fourth positive week out of the past five and the NASDAQ generated a fractional gain.

The U.S. Consumer Price Index fell to a 5.0% annual rate in March from 6.0% the previous month, bringing inflation to the lowest level in nearly two years. A separate report showed that wholesale inflation as measured by the Producer Price Index fell to 2.7%—the lowest in more than two years and down sharply from a 4.9% annual rise in February.

Each of the four major U.S. banks that reported first-quarter results on Friday posted earnings gains relative to the same period a year earlier. However, as of Friday, analysts were forecasting that earnings for all companies in the S&P 500 fell by an average of 6.5% overall—the biggest earnings decline since the second quarter of 2020, according to FactSet.

In the wake of steep interest-rate increases, U.S. retail sales fell more than expected in March, with declining sales of big-ticket items such as vehicles and appliances weighing on results. Overall, sales slipped a seasonally adjusted 1.0% from the previous month, marking the fourth decline out of the past five months. 

Yields of government bonds rose, regaining some of the ground they lost in a sharp decline in early March amid fears about bank liquidity. On Friday, the yield of the 10-year Treasury bond was around 3.52%—up from 3.29% a week earlier, but down sharply from a recent peak of 4.07% on March 2.

For the third week in a row, U.S. banks reduced their borrowing from an emergency lending program that the U.S. Federal Reserve established following last month’s collapse of two regional lenders. Lending through the Bank Term Funding Program dropped to about $312 billion, down about 3% from the previous week.

The price of Bitcoin, the most widely traded cryptocurrency, eclipsed $30,000 on Tuesday for the first time since June 2022. As of Friday, the price was around $30,400—up from just under $20,000 as recently as March 10.

An index that measures investors’ expectations of short-term U.S. stock market volatility fell for the fourth week in a row. On Friday, the CBOE Volatility Index (VIX) was down around 34% from a recent high on March 15.

Source: John Hancock Investment Management

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Woolly Mammoth Meatballs, Anyone?

In late March, the Nemo Science Museum in Amsterdam unveiled a remarkable exhibit, featuring a prehistoric alternative to beef, reported Helen Chandler-Wilde of Bloomberg. The not-for-consumption, lab-cultured display featured:

“…a cantaloupe-size globe of overcooked meat perspiring under a bell jar. This was no ordinary spaghetti topper: It was a woolly-mammoth meatball, created by an Australian lab-grown-meat company...using real mammoth DNA,” reported Yasmin Tayag of The Atlantic.

The meatball was made by combining genetic material found in mammoths with elephant DNA, reported Bloomberg. It’s not the first time a food product has been made from a long extinct species. In 2018, a company produced mastodon gummy bears using gelatin made with mastodon DNA.

The mammoth meatball is intended to draw attention to cultured meat. That’s the most palatable marketing term for cellular protein farming. The meat “is grown in anything from a test tube to a stainless-steel bioreactor. The process is borrowed from research into regenerative medicine, and in fact [Professor] Mark Post of Maastricht University, who cultured the world’s first burger in 2013, was previously working on repairing human heart tissue,” reported Amy Fleming of BBC Science Focus Magazine.

Cultured chicken is already being served in Singapore, and the company that produces it has applied for approval in the United States.

It’s unclear whether cultivating meat in labs will be more environmentally friendly than traditional farming, but it’s a growing segment of the biotechnology industry.

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