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In today’s edition,
- Stability meets scale
- OpenAI bets on depth
- Tariff-linked upside
- Rural connectivity play
- Debt meets digital
Market Snapshot
U.S. equities ended the holiday-shortened week mixed, with divergence across sectors and market caps. The S&P 500 rose 0.52% to 5,282.70, while the Nasdaq dipped 0.44% to 16,286.45 and the Dow Jones fell 0.89% to 39,142.23. Small- and mid-cap indexes outperformed, as investors rotated away from large-cap tech.
Tech stocks faced pressure after the U.S. announced new restrictions on chip exports to China, which dragged down shares of AI-linked companies like NVIDIA and AMD. The information technology sector led declines. Adding to the cautious sentiment, Fed Chair Jerome Powell signalled that rate cuts aren’t imminent and warned that tariffs are driving up inflation while slowing growth.
Meanwhile, retail sales jumped 1.4% in March—the strongest monthly gain in over two years as consumers likely rushed major purchases, particularly vehicles, ahead of anticipated tariffs.
Stock market closing data for the week of Apr 14th to Apr 18th, 2025
News Summaries
While tech stocks struggle with tariffs and uncertainty surrounding rates, Netflix is performing well. Its shares are up 9% in 2025, even as every Magnificent Seven peer is down more than 20% from their highs. Netflix’s strength lies in its combination of resilience and growth. Subscription cancellations stay low, even in tough times. The low-cost ad tier is gaining traction, with more advertising budgets shifting to streaming. Revenue is expected to rise by 12% this quarter, with net earnings increasing by 7.6%. This supports its goal to double revenue and triple operating income by 2030, boosting Wall Street’s trust. Even though Netflix trades at 37 times forward earnings, which is higher than its peers, investors view this as fair due to its better margins and cash flow. Historically, the stock has moved by approximately 9.4% after earnings, with recent quarters exhibiting even more significant jumps. Amid fears of a recession and weak investor sentiment, the worst in 30 years, according to Bank of America, Netflix stands out. It combines defensive qualities with strong growth potential. If the next economic phase prioritises steadiness over hype, Netflix may not only weather the volatility but also lead the way.
OpenAI has launched two new AI models – o3 and o4-mini. These models aim to boost reasoning by integrating visual input with all ChatGPT tools, including web browsing and image analysis. The o3 model works harder on complex tasks in math, science, and coding. It takes more time to compute these problems. Meanwhile, o4-mini is designed to be faster and more efficient. Both models are available to paid users and show OpenAI’s drive to stay competitive, especially in coding, where rivals like Google, Anthropic, and DeepSeek are making progress. Additionally, OpenAI released Codex CLI, an open-source coding assistant that runs locally on a user’s terminal. With GPT-5 on the horizon and competition from open-source models like DeepSeek’s R1, OpenAI’s recent actions indicate a focus on practical, multimodal intelligence. This change represents a shift from being simply generative to being truly helpful.
Bill Ackman’s Pershing Square has revealed a 19.8% stake in Hertz. This stake comes from a mix of equity and swaps. Ackman is betting on pricing advantages and operational improvements. His thesis focuses on how tariffs affect the prices of used cars. Hertz’s $12 billion vehicle fleet could see a $1.2 billion increase if prices rise by 10%. That amount is nearly half of its market cap. Ackman also believes there’s room for growth through new partnerships, including one with Uber. He credits the new management for avoiding past mistakes, such as overexposure to EVs. While Pershing’s flagship fund is down 5.5% this year, Hertz shares have surged 125% in just two days. This suggests that early investors concur with Ackman’s perspective: this is not merely a temporary rebound, but rather a case of asset repricing aligning with structural discipline.
Starlink’s partnerships with Reliance Jio and Bharti Airtel represent a shift toward India. Starlink has tried to enter this market since 2021 but faced licensing and regulatory issues. While it still waits for formal approval, these deals could allow Starlink to reach rural and underserved areas. These regions are often overlooked by traditional networks, leaving 670 million Indians offline. Jio and Airtel’s change of stance follows the government’s decision to allocate satellite spectrum at fixed prices. This removes auction uncertainties and promotes collaboration over protectionism. However, pricing remains a significant challenge. Starlink’s $120 monthly plans in the U.S. stand in stark contrast to India’s $0.11 per GB mobile data and an average rural wage below $150. This raises doubts about affordability and scalability. India may not be a mass-market win for Musk, but it offers valuable access where ground infrastructure is weak. This gives SpaceX a foothold and helps telcos close rural gaps without overspending.
From the World of Crypto
What if the U.S. government could borrow money more cheaply and give investors a shot at Bitcoin-style upside at the same time?
That’s the idea behind “BitBonds,” a new proposal from VanEck’s digital assets head Matthew Sigel. Think of BitBonds as regular 10-year U.S. government bonds with a twist.
90% of your investment goes into traditional Treasuries (the safest debt in the world), while 10% is used to buy Bitcoin. When the bond matures, you receive your Treasury portion in full, plus the value of the 10% in Bitcoin.
Now here’s where it gets interesting.
If Bitcoin does really well, you, as the investor, keep all the gains until your total return reaches 4.5% a year. After that, any extra upside is split between you and the government. On the flip side, if Bitcoin falls, you take the hit. So it’s a mix: your 90% is rock-solid, but the other 10% adds risk and potential reward.
Sigel ran some numbers.
If your BitBond pays a 4% annual coupon, you don’t need Bitcoin to rise at all as you already break even. However, if your bond pays just 1%, then Bitcoin must grow by more than 16.6% per year just to avoid losing money. That’s a high bar, and if Bitcoin underperforms, you could lose 20% to 46% on that bond.
So the less interest the bond pays, the more you’re depending on Bitcoin to deliver.
So why would the government want to do this? Because lower-coupon BitBonds could save them money.
For instance, issuing $100 billion worth of 1% BitBonds instead of traditional 4% Treasuries could save the government $13 billion over 10 years, even if the value of Bitcoin remains stable. And if Bitcoin grows 30% annually (like it has in some years), the government could see even more upside, over $40 billion in value.
Of course, this is not without its challenges.
Investors bear the downside risk of Bitcoin but don’t reap all the upside. The Treasury would also need to raise a bit more than $100 billion each time to cover the 10% Bitcoin buy. Introducing a product like this would mean navigating regulations, market trust, and operational complexity.
Still, BitBonds raise a timely question: can we make government debt smarter, more flexible, and better aligned with investor interests? This isn’t a mass-market product, and it’s definitely not risk-free but in a world of rising debt and evolving money, blending old-school bonds with digital assets might just be the kind of rethink sovereign finance needs.
