Banks boost ASX; Musk sued by SEC

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Meanwhile, the US Securities and Exchange Commission has sued billionaire Elon Musk, saying he failed to disclose his ownership of Twitter stock in a timely manner in early 2022, before buying the social media site.

As a result, the SEC alleges, Musk was able to underpay “by at least $US150 million ($242 billion)” for shares he bought after he should have disclosed his ownership of more than 5 per cent of Twitter’s shares. Musk bought Twitter in October 2022 and later renamed it X.

The SEC has sued Elon Musk. Credit: AP

Musk started amassing Twitter shares in early 2022, and by March of that year, he owned more than 5 per cent. At this point, the complaint says, he was required by law to disclose his ownership, but he failed to do so until April 4, 11 days after the report was due.

Musk’s lawyer, Alex Spiro, said in a statement that the lawsuit “is an admission by the SEC that they cannot bring an actual case” since Musk has “done nothing wrong.” He called the lawsuit a “sham.”

On Wall Street, stocks got a boost from a report showing inflation at the US wholesale level wasn’t as high last month as economists expected. It’s an encouraging signal ahead of a report coming Wednesday, which will show how much inflation US consumers faced at gasoline pumps, grocery registers and auto lots in December.

Stubbornly high readings on inflation and a run of better-than-expected updates on the US economy have sent Wall Street into a weeks-long rut, pulling it further from the dozens of all-time highs set last year. The fear is that all the strong data will convince the Federal Reserve to deliver less relief this year through lower interest rates.

The Fed has already hinted it’s likely to cut rates just two times in 2025, down from an earlier projection of four. Speculation is growing about whether the Fed may cut rates zero times this year.

Such questions have sent Treasury yields sharply higher in the bond market, which cranks up the pressure on the stock market. Yields slowed their ascent following the update on wholesale inflation.

Indexes drifted between gains and losses through the day in large part due to drops for several Big Tech stocks. Nvidia fell 1.1 per cent and was the second-heaviest weight on the S&P 500.

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The only stock to drag more on the market was Eli Lilly, which fell 6.6 per cent after saying it expects to report weaker revenue for the last three months of 2024 than previously forecast.

Several of the nation’s biggest financial companies will report their latest results on Wednesday, including JPMorgan Chase and Wells Fargo, as earnings reporting season gears up. Such reports are always under the spotlight, but companies may be under more pressure to impress this time around.

If Treasury yields continue to rise, either stock prices need to fall or companies need to produce bigger profit growth to make up for it.

In stock markets abroad, indexes were higher across much of Europe and Asia with a few exceptions.

Crude oil prices fell to give back some of their strong gains in recent weeks, which had also been cranking up the pressure on inflation.

Benchmark US crude eased 1.7 per cent to $US77.50 per barrel. Brent crude, the international standard, fell 1.3 per cent to $US79.92 per barrel.

With AP

The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.

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