The limits of yen intervention

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Tesla’s Chinese rival Nio launches a new brand and car that undercuts the Model Y by $4,000

Chinese electric car company Nio revealed Wednesday that the first car for its new, lower-priced brand, Onvo, will be about $4,000 cheaper than Tesla’s comparable Model Y. Onvo aims to set a “new standard” for the family car, Alan Ai, president of the Nio sub-brand, said at Wednesday’s launch event in Mandarin, translated by CNBC. Fierce competition in China’s electric car market has invited new entrants and prompted many companies to cut prices. Chinese electric car company Nio launched its lower-cost brand Onvo on Wednesday, May 15, 2024, in Shanghai, China. CNBC | Evelyn Cheng

SHANGHAI — Chinese electric car company Nio revealed Wednesday that the first car for its new, lower-priced brand, Onvo, will be about $4,000 cheaper than Tesla’s comparable Model Y.

Deliveries for Onvo’s first car, the L60 SUV, are set to begin in September, the company said. Pre-sales began after Wednesday’s launch event.

Nio CEO William Li said he expects Onvo to begin selling its cars overseas at some point but didn’t specify when, according to an interview with CNBC’s Eunice Yoon.

Since launching about 10 years ago, Nio has focused on the premium segment of cars, priced around 300,000 yuan (US$41,500) or higher. The company has since expanded to Europe, but its monthly deliveries in China have generally remained modest versus the competition.

Onvo’s L60 starts at 219,900 yuan (US$30,439) versus the Model Y’s 249,900 yuan (US$34,617). Elon Musk’s electric SUV has been one of the best-selling pure battery-powered electric cars in China.

Fierce competition in China’s electric car market has invited new entrants and prompted many companies to cut prices.

Smartphone company Xiaomi in late March entered the electric car market with its SU7 sedan to rival Tesla’s Model 3 with a price that was also about $4,000 cheaper.

The Model 3 has since cut its price by about $2,000 to 231,900 yuan (US$32,124), according to Tesla’s China website. Xiaomi said Wednesday it had delivered 10,000 SU7 vehicles.

BYD, which sold more cars than Elon Musk’s automaker last year when including hybrids, mostly sells cars in the range of 100,000 yuan (US$13,851) or below. BYD has started to expand into higher-price segments in the last few years.

Nio CEO Li confirmed to CNBC that the L60 is using

CNBC

US Annual Inflation Dips to 3.4%, April CPI Report Shows

The Bureau of Labor Statistics reported that the Consumer Price Index in the US climbed 3.4% in April from year-ago levels – a tick downward from March’s 3.5% rate. Core CPI, which excludes volatile food and energy costs, rose 3.6% in April over the last 12 months after rising 3.8% in March.

The CPI climbed 0.3% in April from month-ago levels after rising 0.4% in March. Core CPI also rose 0.3% after rising 0.4% in March.

The BLS reported: “The index for shelter rose in April, as did the index for gasoline. Combined, these two indexes contributed over seventy percent of the monthly increase in the index for all items.”

The April CPI was forecast to show a 0.4% increase from the month before – the same reading in the March report. Meanwhile, core CPI, which excludes highly volatile food and energy prices, was predicted to decline to 0.3% from 0.4% in March.

On an annual basis, the April CPI had been forecast to show the annual inflation rate at 3.4% in April from 3.5% in March. The core CPI year over year had been forecast to rise to 3.6% in April from 3.8% in March.

April CPI Report Key Stats

• CPI rose 0.3% for the month after rising 0.4% in March
• Core CPI climbed 0.3% after increasing by 0.4% in March
• CPI climbed 3.4% year over year after increasing by 3.5% the prior month
• Core CPI climbed 3.6% from year-ago levels after growing 3.8% in March

Energy prices were mixed overall for the month after growing 1.1% the prior month. Utility (piped) gas service prices fell 2.9%, fuel oil prices increased 0.9%, gasoline prices rose 2.8%, and electricity prices fell 0.1%.

In April, shelter prices increased 0.4% after increasing by the same amount in March.

This article was partially generated by Wordsmith, an automated smart-text platform, using data from the Bureau of Labor Statistics. The article has been reviewed by Morningstar editors.

Raspberry Pi’s IPO should prove a tasty mouthful for London

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US inflation drops to 3.4% in April

According the Bureau of Economic Analysis (BEA), core CPI reached 3.6% year-on-year, the lowest level since April 2021. The headline figure fell in line with economists’ predictions and comes a day after Federal Reserve chair Jay Powell said the central bank would have to keep interest rates higher for longer as it tries to tackle wages inflation and a rise in wages. On 1 May, the Federal Reserve decided to keep the interest rate steady at 5.25% to 5.5%, the highest since 2007. Meanwhile, April’s CPI came against the backdrop of weaker than expected retail sales in March, which rem…

HSBC AM multi-asset fund manager and World Selection head Kate Morrissey exits

Morrissey, who is the lead portfolio manager and head of the firm’s World Selection portfolios within the UK multi-asset team, has left to “pursue external opportunities”, a spokesperson told Investment Week.  Collectively, the World Selection portfolios hold more than £1.9bn in assets under management, according to data from FE fundinfo. Morrissey also runs five funds in the firm’s Global Strategy multi-asset range, with a total £8.5bn in AUM.  Prior to her current role, Morrissey was a rates portfolio manager in the global bond team. Before that, she ran fixed income services within…

Astorg holds final closing of Astorg VIII at €4.4bn

Pan-European private equity firm Astorg has held the final close of its latest flagship fund, Astorg VIII – an Article 8 buyout fund – with total capital commitments of €4.4bn, making it the firm’s largest fund raised to date.

Astorg VIII will target B2B companies across healthcare, technology, business services and industrials. The fund has made five investments to date, representing total committed or earmarked capital from the fund of nearly €2bn, according to a press release.

Astorg is based in Paris, France and has recently added Judith Charpentier, Lionel de Posson, Edouard Pillot and Benjamin Cordonnier to its executive committee.

FalconPoint makes inaugural investment in infrastructure solutions provider JENNMAR

FalconPoint Partners, a private equity firm focused on North American middle market companies in the business services and industrials sectors, has invested in JENNMAR, an infrastructure products and specialised services provider to the civil infrastructure, solar, mining and construction industries.

JENNMAR will continue to be led by CEO Tony Calandra and its management team. FalconPoint has invested and committed in excess of $250m of equity, according to a press release.

JENNMAR was founded in 1922 and operates across manufactured products, resins and chemicals, diversified industrial manufacturing. Its specialised services include engineering support and staffing. The company employs around 4,000 employees across North America, Australia, Asia and Europe.

BofA Securities and Truist Securities served as financial advisors, and Lowenstein Sandler and Paul, Weiss, Rifkind, Wharton & Garrison provided legal advice to FalconPoint. Jones Day served as legal advisor to JENNMAR.

CPI report shows inflation easing in April, with consumer prices still rising 3.4% from a year ago

The CPI report showed an increase of 0.3% from March, the Labor Department’s Bureau of Labor Statistics reported Wednesday. Inflation eased slightly in April, providing some relief for consumers. On a 12-month basis, however, the CPI increased 3.4%, in line with expectations. Core inflation was at 3.6%, the lowest reading ex-food and energy since April 2021.

Inflation eased slightly in April, providing at least a bit of relief for consumers while still holding above levels that would suggest a cut in interest rates is imminent.

The consumer price index, a broad measure of how much goods and services cost at the cash register, increased 0.3% from March, the Labor Department’s Bureau of Labor Statistics reported Wednesday. That was slightly below the Dow Jones estimate for 0.4%.

On a 12-month basis, however, the CPI increased 3.4%, in line with expectations.

Excluding food and energy, the key core inflation reading came in at 0.3% monthly and 3.6% on an annual basis, both as forecast. The core 12-month inflation reading was the lowest since April 2021 while the month increase was the smallest since December.

Markets reacted positively after the CPI release, with futures tied to major stock indexes rallying and Treasury yields tumbling. Futures traders raised the implied probability that the Federal Reserve would start cutting interest rates in September.

“This is the first print in a month that wasn’t hotter than expected, so there’s a relief rally,” said Dan North, senior economist at Allianz Trade North America. “The excitement is a little overdone. This is not Caitlin Clark. She’s exciting, this is not exciting.”

In other economic news Wednesday, retail sales were flat on the month, compared to the estimate for a 0.4% increase. That figure is adjusted for seasonality but not inflation, suggesting consumers did not keep up with the pace of price increases.

For the inflation report, price gains on the month were driven heavily by increases in both shelter and energy.

Shelter costs, which have been a particular trouble spot for Federal Reserve officials expecting inflation to come down this year, increased 0.4% for the month and were up 5.5% from a year ago. Both are levels uncomfortably high for a Fed trying to drive overall inflation back down to

CNBC

TrueBridge raises $1.6bn across five VC investment vehicles

Venture capital investment firm TrueBridge Capital Partners has raised $1.6bn in capital commitments across five investment vehicles focusing on investments in other venture capital funds and technology companies.

According to a press statement, the vehicles – TrueBridge Capital Partners Fund VIII, TrueBridge Seed & Micro-VC II, TrueBridge Direct Fund III, TrueBridge Secondaries I and TrueBridge Blockchain I – attracted support from both existing limited partners and new investors, including foundations and endowments, pension funds, family offices and high-net-worth individuals. With these fundraisings, TrueBridge now manages more than $7.5bn in assets.

TrueBridge Capital Partners Fund VIII, which will focus on investments in early-stage tech companies, closed with $884m in commitments, surpassing its fundraising target, while Seed & Micro-VC II held a final close with $189m in total commitments to invest in seed and micro-VC managers focused on early-stage companies.

Direct Fund III, the firm’s third investment vehicle focused on mid- to late-stage technology companies, held a final close with $253m in total commitments, while TrueBridge’s secondaries fund, Secondaries I, closed with $230m in total commitments.

Blockchain I, TrueBridge’s first blockchain fund, held a final close at $62m to invest in blockchain-focused venture funds and companies within the sector.