It’s officially May!

Key Events

👉The Fed holds rates and reduces treasury bond sales

The Federal Reserve maintained its current interest rate levels, citing lack of further progress towards bringing down inflation levels.

This decision comes after a disappointing inflation report in March, which prompted investors to lower their expectations of rate cuts, now expecting just one this year.

The US central bank also announced it will scale back the release of maturing treasury securities, reverting to quantitative tightening.

When securities mature, the Fed has the choice to reinvest them and bolster the balance sheet, or they can let the securities expire, effectively rolling them off the balance sheet.

The central bank previously was capping monthly treasury runoff at $60B, but after today’s meeting the cap has been set at $25B to ensure the financial system does not run short of reserves.

👉 Amazon’s delivers strong Q1 earnings

Amazon’s beat Q1 sales and earnings, driven by Amazon Web Services (AWS) and continued advertising demand.

The company reported 17% revenue growth in AWS in Q1 – the fastest growth they have witnessed for the past 5 quarters. Operating income grew 84%, benefiting in part from cost cutting and operational improvements.

Another significant driver was the deployment of AI. AI advancements include new AWS tools for building generative AI applications and strategic partnerships, enhancing cloud infrastructure capabilities.

👉PG&E advances sale of power business segment to KKR

PG&E is nearing a deal to sell a multibillion-dollar stake in its fleet of power plants to KKR. The sale includes a portion of the $3.5B in assets that compose a new business subsidiary called Pacific Generation.

PG&E is struggling to raise debt or equity due to a complex bankruptcy restructuring in 2019 that left the company liable for $30B in costs from California wildfires. The company is therefore seeking alternative funding in order to continue providing safe, sustainable, and affordable energy.

KKR’s minority stake can help enhance PG&E’s credit profile. This would allow PG&E to negotiate better terms on debt (aka lower rates, cheaper debt), allowing PG&E to raise debt and fund infrastructure improvements and lower utility bills for customers.

Mergers & Acquisitions

SES acquired Intelsat for $3.1B in cash – marks two European satellite companies joining forces to compete against Starlink and Amazon Kuiper.

Private Equity

H.I.G Capital bought USA DeBusk, a provider of industrial cleaning and infrastructure services.

Initial Public Offerings

Puig Brands raised $2.8B in IPO, marking Europe’s largest listing this year.

Venture Capital

Securitize, a platform for tokenizing real-world assets, raised $47M.