News of the day for May 17, 2024
China rolls out its strongest measures so far to fix its broken housing market, unveiling plans to buy up unsold homes and loosen mortgages; shares of Reddit (RDDT) are soaring after the social-media platform agreed to share its content with OpenAI; Boeing (BA) holds its annual meeting of shareholders today, with outgoing CEO Dave Calhoun’s status on the board up for debate; voting by around 5,000 employees at a large Mercedes-Benz plant in Alabama on whether to form a union and be represented by the United Auto Workers ends today; and the IEA says the world lacks enough critical minerals to power the clean energy transition. U.S. stock futures are little changed after both the S&P 500 and Nasdaq retreated from record highs, and the Dow came off the 40,000-point milestone. Here’s what investors need to know today.
### 1. China Rolls Out Measures to Fix Broken Housing Market
China has rolled out its strongest measures so far to fix its broken housing market, easing mortgage rules and pushing city and local authorities to buy up unsold homes to be converted into affordable housing. It is unclear, however, how the country’s cash-strapped local governments will get enough funding to pay for the acquisition. The People’s Bank of China, the country’s central bank, removed the floor on mortgage rates while cutting the minimum down-payment ratio. It is also supplying government-backed firms with 300 billion yuan ($42 billion) of funding to buy excess inventory from developers, according to Bloomberg. China’s housing downturn has sapped consumer spending, and the country has boosted exports to pump up growth, sparking allegations from the U.S. it is dumping excess capacity.
### 2. Reddit Soars After Social-Media Platform Strikes Deal With OpenAI
Shares of Reddit (RDDT) are jumping 9% in premarket trading after the social-media platform agreed to share its content with OpenAI. The partnership with allows the ChatGPT owner to train its artificial intelligence (AI) models using Reddit content in exchange for certain OpenAI-powered features being offered to Reddit’s users and moderators. In addition, Reddit will also add OpenAI as an advertising partner. Reddit struck a similar deal with Alphabet’s (GOOGL) Google earlier this year in which it allowed the internet search giant’s AI models, such as Gemini, to make its content available for training via the platform’s application programming interface (API).
### 3. Boeing Shareholders to Vote on Calhoun’s Board Status
Boeing (BA) holds its annual meeting of shareholders today, as the aircraft maker continues to struggle with the fallout from a number of safety-related incidents that has led to the forthcoming departure of Chief Executive Officer (CEO) Dave Calhoun at the end of the year. One of the issues up for shareholder vote will be whether the outgoing CEO should remain on the board. Proxy advisor Glass Lewis has recommended shareholders vote against Calhoun’s re-election, citing dissatisfaction over efforts to transform the plane maker’s safety culture. The company has been under pressure after a door plug on an Alaska Airlines flight in January blew out of a Boeing 737 Max 9 plane midflight, leading to a significant slowdown of its production this year, and a slew of investigations by regulators.
### 4. Voting Ends at Mercedes Plant in Alabama on Whether to Form Union
Voting by around 5,000 employees at a large Mercedes-Benz plant in Alabama on whether to form a union and be represented by the United Auto Workers concludes today. A win in Alabama would further build the union’s momentum, after the UAW won at a Volkswagen plant in Tennessee last month, a victory that gave the union its first contract at a foreign-owned auto-manufacturing plant. Organized labor has historically struggled to make gains in the South.
### 5. World Lacks Enough Critical Minerals to Ensure Smooth Clean Energy Transition, IEA Says
There aren’t enough critical minerals to ensure a smooth transition to green energy, according to a report from the International Energy Agency. “Secure and sustainable access to critical minerals is essential for smooth and affordable clean energy transitions,” IEA Executive Director Fatih Birol said. “The world’s appetite for technologies such as solar panels, electric cars and batteries is growing fast—but we cannot satisfy it without reliable and expanding supplies of critical minerals.” The report said IEA analysis showed announced projects are sufficient to meet only 70% of copper and 50% of lithium requirements in 2035. Copper and lithium are key components of electric vehicles.
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By staying informed about these key developments in various sectors, investors can make more informed decisions about their portfolios and stay ahead of market trends. From China’s efforts to stabilize its housing market to Reddit’s strategic partnerships and Boeing’s shareholder vote, there are significant events shaping the financial landscape today. Additionally, the importance of critical minerals in powering clean energy transitions highlights the need for sustainable resource management in a rapidly evolving world.
