Good morning! Shares of Block fall after short-seller report, TikTok faces uncertain future after congressional hearing and banking crisis affects mortgage rates.

FINANCE

Block Targeted by Short-Sellers

On Thursday, the shares of the payments company formerly known as Square, now Block Inc., fell by 15% following accusations by short-seller Hindenburg Research of predatory practices and misreporting of user numbers.

Here's the breakdown:

• Shares of payments company Block Inc., formerly known as Square, fell by 15% on Thursday.

• Hindenburg Research accused the company of employing deceptive tactics and misreporting user numbers.

• The report claimed that Block's Cash App service has misleading metrics and fake and duplicate accounts.

• Block denies the allegations and says it is considering legal action against Hindenburg.

• Hindenburg has previously targeted other companies, including Nikola Corp. and Adani Group.

International Intrigue

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TECH

The TikTok Hearing

TikTok CEO, Shou Zi Chew, faced intense questioning from Congress as he attempted to alleviate national security concerns about the Chinese-owned video app.

Here's the breakdown:

• Lawmakers criticized TikTok's CEO, Shou Zi Chew, during his debut appearance before Congress.

• Lawmakers from both parties criticized TikTok, calling it a tool of China's Communist government.

• The hearing indicated that TikTok's attempts to win over Washington through lobbying and advertising campaigns have yielded minimal results.

• The momentum is growing on a bipartisan basis in Congress to ban or restrict TikTok, as evidenced by the support of 20 senators for the "Restricting the Emergence of Security Threats that Risk Information and Communications Technology Act."

• Lawmakers remain unconvinced about TikTok's $1.5 billion Project Texas, which was intended to create a gap between its US operations and China, due to their continued apprehension over Chinese ownership.

REAL ESTATE

Mortgage Rate Volatility

Mortgage rates have been fluctuating this year, but analysts predict that rates will move down throughout the year due to a slowing economy and inflation.

Here's the breakdown:

• After rising in 2022, mortgage rates drifted down through January 2023 due to reports of receding inflation.

• However, strong economic reports in February caused concerns that inflation was not cooling as quickly or as much as many had hoped, causing rates to climb half a percentage point over the month.

• In March 2023, banks began collapsing, which sent rates falling again.

• The Federal Reserve's recent announcement of a quarter-point rate hike aims to fight high inflation while considering financial stability risks.

• Typically, mortgage rates follow the yield on 10-year US Treasury bonds, which fluctuate in response to the Fed's anticipated and actual actions.

• The economy is expected to slow down in the next few quarters, but inflation is expected to improve in the second half of 2023.

APPENDIX

• Coffee may help reduce the risk of heart disease, but it may also increase the risk of developing certain types of cancer.

• Ford is investing billions of dollars in electric vehicles, but it is also lobbying for government subsidies for fossil fuels.

• European bank stocks fell sharply after UBS and Deutsche Bank warned of lower profits.

• The Federal Reserve has typically targeted 2% inflation, but scholars believe that may need to change.

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