Happy morning, Munchers! 🙏

As always, here is your daily dose of the news that matters, from Wall Street to Dalal Street - in 4 minutes and 57 seconds.

Yesterday, families across Germany celebrated some lower inflation, Tesla took a big beating on Wall Street, and junk bond traders bet for armageddon. 🔥

Let’s dive in.

What’s hot, what’s not?

Market Commentary

• European stocks enjoyed some back-to-back gains after optimism over the China situation buoyed markets.

• American markets had a very choppy and volatile session on the other hand, with both stocks and bonds giving up pre-market gains. 2023's not gonna go easy on us.

• The Bank of Japan is readying up to change course. It's gonna be painful to go from dovish to hawkish, but the longer they wait, the worse it will get.

Story Roundup

1 - Germany's grocery bills get trimmed. ✂️

Just a month back, inflation in Germany hit a 70-year high.

Yesterday, the number weighed in at 9.6% - a much, much bigger drop than expected.

This news is gonna give the ECB a much needed reason to stop slamming on the brakes, because Germany is not the only European country that's had larger-than-expected drops in inflation.

Berlin introduced price caps on gas for consumers too, so the days of double-digit inflation are well behind us.

Maybe we'll all be okay. 🤷🏼

2 - Papa Musk falls short of the Street's expectations. 📉

Papa Musk has 99 problems, and Tesla is 98 of them.

They started 2023 off with a bang - missing deliveries and sending their stock barreling.

Tesla delivered 405k vehicles in Q4, but Wall Street expected a number closer to 420-430k. The result? Stock down 15% in one day.

If that wasn't enough, they sold a batches of cars at discounts, despite Elon saying he would never do anything of the sort.

All of this points to one big conclusion.

Demand for EVs is slowing.

Tesla's production and logistics problems have also proven to be the last straw for investors, who have pulled their money swiftly. Stock is down 75% over the last year.

Electriying. ⚡

3 - Junk bond barons brace for steep defaults. 💥

The biggest buyers of US junk loans are slowing down their exposure to risky high-yield debt.

Jerome Powell's aggressive campaign to tighten things up has one big goal - to destroy demand.

This forces risky borrowers to start thinking about how to refinance their 'cheap money', which was available in free flow during 2020-2021.

Stress on leveraged loans is gonna increase, and low-quality borrowers are gonna go bust.

Strap in. 💥

4 - SBF preps to plead 'not guilty'. 😇

The mastermind behind the FTX fiasco reckons that he can get off scot-free.

SBF pleaded 'not guilty' to criminal charges at his hearing - which comes as no surprise to anyone.

The charges include wire fraud, securities fraud, money laundering, and campaign finance valuations.

Courts have set the date, and the date is October 2 - we'll find out what's happening with the wonder boy of crypto.

This is the highest-profile white collar fraud in a long, long time. 💀

5 - Asset managers prep for a big slowdown. 🦥

If you were managing billions of dollars last year, it probably wasn't a good one.

Revenues were down across the asset management industry after a record 2021, as falling markets hit both management and performance fees.

At the same time, money managers are under pressure to upgrade their tech and win new customers as more and more people compete for the same capital.

Bond funds are also looking hopeful as markets prep for the possibility of rate cuts by the Fed.

Big money is having some tough times. 🥲

Hope you enjoyed this issue of the Market Munch. If you've got any feedback - good or bad (😏) you can hit reply to this email. Thanks a ton for reading!

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Cheers, and have a lovely day. 🙏

Aryaansh