Lots of Economic Data This Week

Good Morning,

This week the market is getting back into action after a holiday on this past Friday. Overnight the dollar index went above 102, strongest levels in a week. Data on Friday showed U.S. non-farm payrolls rose 236K, close to expectations of 239K. U.S. unemployment fell to 3.5% This week eyes will be on jobless claims, ISM PMIs, ADP, and JOLTS report. The data that is to come out should show financial conditions in the U.S. economy are tightening in an already shacky market. Later on the week Canada & Brazil are set to release CPI numbers.

Markets: Before the Open

Top News Stories

Canada

• Homes sales in Montreal hit new low, drop of 28% vs last year (MG)

• Canadian Utilities Limited to report financial results Apr. 27 (CBJ)

• Bank of Canada is projected to keep rates the same (RT)

• Canada’s new budget seeks to expand investment tax credit to mining companies (RT)

U.S.

• Details of Microsoft’s partnership with OpenAI (CNBC)

• Tesla to build new energy storage battery plant in Shanghai (WSJ)

• Lenders may face pressure from increasing on liquidity with higher interest rates (WSJ)

Argentina

• Agro dollar offers 300 pesos per dollar of exporters focused on agriculture (BAT)

Bolivia

• Bolivia has reached it special drawing rights from the IMF, deepening a currency crisis (BBG)

Brazil

• Brazil is projecting a record trade surplus of $84B this year (RIO)

• A poll that included 1,700 companies showed 71% of participants don’t expect to hit sales target this year (RIO)

Colombia

• Detailed look of price increases of food in Colombia (ELT)

Costa Rica

• Exports of plantain dropped 420% last year and now the country depends on imports to fill domestic demand (LN)

Dominican Republic

• The World Bank has reduced the projected economic growth to 4.4% from 4.9% (ELD)

Ecuador

• The first shipment ever of Dragon Fruit to China is set to sail today out of Quito (ELU)

• Remittances to Ecuador rose 9% in 2022, remittances totaled $4.74B (RG)

Peru

• After a drop of 13.74% in the fisheries sector last year, the sector grew 33% in January (ELC)

Mexico

• Mexico to reduce Glyphosate imports in 2023 (MB)

Venture Capital

• Fungi based seafood startup Aqua Cultured Foods raises $5.5M in an investment round led by Stary Dog Capital (AFN)

• Flyby Robotics, a startup that focuses on drone food deliveries raises $4M in a round led by MaC Ventures Capital (RD)

• Vertical Farm startup Babylon Micro farms raises $8M in a Series A round led by Venture South (AFN)

• Summary of Fintech news last week (FNN)

• Edtech company Innovare raises an additional $2M in seed funding, total capital raised is $5M YTD (PRN)

Insights

When the U.S. military was looking for the Next-Gen warfighter they decided on Lockheed Martin’s F-35 Lighting II. The multi-role fighter started its first flight on December 15 2006 and as the U.S. Dept. of Defense 2022 budget calls for the acquisition of 2,456 F-35s. FY2022 defense authorization act funded F-35 procurement at $8.7B for 85 planes:

• 48 F-35A

• 17 F-35B

• 20 F-35C

The total program is estimated to cost $397.8B. All F-35s will be single-seat aircrafts with the ability to go supersonic. The breakdown of the variants is the following:

• Air Force CTOL Version (F-35A)- Plans to buy 1,763. This version will replace the Air Force’s F-16 fighters, A-10 Warthog, and possibly the F-15

• Marine Corps STOVL (F-35B)- Plans to buy 353. Intended to replace the Harrier and F/A18

• Navy Carrier-Suitable Version (F-35C)- Plans to buy 273 & marines plan to buy 67 of this variant

The F-35 is powered by the Pratt & Whitney engine which is derived from the F22’s F119 engine. The engine is made at Pratt & Whitney’s plants in East Hartford and Middletown, CT. Rolls- Royce build the vertical lift system for the F-35B.

The program is not without its problems which has plagued the program for years. According to a Bloomberg article last month only 53.1% of the Pentagon’s F-35s are mission capable. This is below the target of 65%, according to Air Force Lieutenant General Michael Schmidt who is the program manager. The percentage of planes that are capable of flying all their missions (fully mission capable) is less then 30%.

Other Problems are long repair times, and the “Power & Thermal Management System” is underperforming resulting in a reduced engine life. Overall the U.S. needs next gen fighters and will continue to spend money developing weapons systems to protect the homeland. That being said Americans must know where they’re money is going to & should have full transparency on all matters of the government.

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DISCLAIMER: The writing above is not financial advice or solicitation to buy/trade any financial product/security. This newsletter is for educational purposes only. Any action/decision made by any reader is done by their own accord. Financial markets are full of risk so please be careful.