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FTSE 100 Live: US non-farm jobs surprise, Amazon and Snap in huge swing, Brent nears $93

ESI
By
04 February 2022
T

ech sector valuations continue to swing wildly after Amazon and Snap shares rose sharply overnight.

Better-than-expected results sent Amazon and Snap up by 14% and 59% respectively in dealings after Wall Street's closing bell, putting back heavy losses seen during regular trading.

One analyst described the latest movements as “stomach-churning” after disappointing results from Facebook business Meta Platforms triggered a tech sell-off on Thursday.

Live updates

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Amazon gains $135bn in “wild” tech rebound

Amazon has booked one of the biggest opening price gains in Wall Street history, ending a rollercoaster week for US tech titans and the pension pots worldwide which rely upon them.

Shares in the e-commerce and cloud-computing giant jumped 12 % as trading opened this afternoon - adding almost $135billion to its market value.

The rally helped to lift other tech players which had slumped in a sympathy sell-off after Facebook-owner Meta’s 26% collapse yesterday.

Latest here

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Saudi Aramco eyes secondary listing in London

Saudi Arabia has restarted plans to list more shares of Aramco, according to people familiar with the company’s strategy, with an ambition to sell as much as a $50 billion stake, which at current valuations would be 2.5% of the company.

Executives at the world’s most valuable oil company have held discussions internally and with outside advisers about selling additional shares on the Riyadh stock exchange and a secondary listing, possibly in London, Singapore or other venues, the people said.

Read more.

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“This process is designed to destroy people”

Last week Matt Connolly had a conviction for Libor rigging overturned by the US court of appeal. The former Deutsche Bank trader and a colleague are among the first to have convictions cleared for rate rigging after more than 20 traders around the world were charged with the crime.

Connolly spoke to the Standard about what the experience was like: “​I totally understand why people don’t like us. I won’t ask for sympathy, only a chance to show people the evidence.”

Read the full interview.

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Crypto ad crackdown too strict says industry chief

The UK boss of Gemini, the cryptocurrency business set-up by the billionaire Winklevoss twins, has claimed new regulations risk driving British crypto investors to unregulated exchanged offshore.

Blair Halliday said proposals from the Financial Conduct Authority and the Treasury to crackdown on crypto ads by bringing them under the remit of regulators were too strict.

The new proposals mean firms will have to get adverts approved by a fully regulated business, meaning most crypto companies will be relying on a competitor for help. Halliday said this was unlikely to work in practice and could hamstring the industry.

An “unintended consequence” could be to drive Brits towards unregulated overseas platforms that are beyond the reach of regulators.

Read the full story.

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Why should Brits take a pay cut for Bailey?

After fumbling the ball on inflation last year, the Bank of England Governor Andrew Bailey has now asked Brits to take what amounts to a pay cut to help tame inflation.

Bailey told the BBC he was “broadly” asking workers not to ask for too big a pay rise this year to stop inflation becoming ingrained. With price rises set to hit 7.25% by April under the Bank’s own forecasts, that will mean people take a real-terms pay cut if they follow the governor’s advice.

Interviewer Faisal Islam was visibly astonished. The comments are unbelievable not just because the Governor himself is paid over half a million pounds, but because taming inflation is precisely his job.

Read today’s city comment on why Brits shouldn’t take a pay cut for Bailey.

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US jobs data shows surprise rise

US employers added more jobs than forecast last month despite a surge in Covid-19 infections and related business closures (Bloomberg).

Nonfarm payrolls increased 467,000 in January after an upwardly revised 510,000 gain in December, a Labor Department report showed.

The unemployment rate ticked up to 4%, and average hourly earnings jumped.

The median estimate in a Bloomberg survey of economists called for a 125,000 advance in payrolls, though forecasts ranged widely.

A variety of factors including omicron and the way workers who are home sick are factored in make interpreting the January data challenging.

In a surprise display of strength, the labour market continued to improve last month, weathering record-high levels of coronavirus infections and the resulting absenteeism from work.

The data further reinforce Federal Reserve Chair Jerome Powell’s description last week of the labor market as “strong” and validate the central bank’s intention to raise interest rates in March to combat the highest inflation in nearly 40 years.

The potential for a weak - or even negative - payrolls print, largely because of virus-related disruptions, was well telegraphed in the days ahead of the report, including by White House and Federal Reserve officials.

Meanwhile, the Labor Department’s report showed average hourly earnings rose 0.7% in January and 5.7% from a year ago, further fanning concerns about the persistence of inflation. The average workweek dropped.

The faster-than-expected advance in pay could fuel market concerns about the Fed taking an even more aggressive stance on inflation this year.

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Tesla drops out of UK best-sellers list

Tesla has dropped out of the list of Britain’s best selling cars after topping the tables at the end of last year.

Figures from the Society of Motor Manufacturers and Traders show the Silicon Valley electric car maker didn’t make the top ten for new car registrations in January. Its Model 3 was the best selling car in December last year and the second best selling car of 2021.

612 Tesla Model 3s were registered in the UK in December. Falling outside of the top 10 means fewer than 1767 vehicles were shipped last month. The best-selling car in January was the Kia Sportage, with 3458 registered for the road.

Read the full story.

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Tech stocks go on wild ride

Amazon is on course to bank the biggest one-day price gain in Wall Street history, ending a rollercoaster week for US tech titans and the pension pots worldwide which rely upon them.

Futures in the e-commerce and cloud-computing giant jumped 15% overnight - adding $200 billion to its market value on paper - after beating expectations to report a 10% rise in sales to $137 billion in the past three months.

The rebound rally helped to lift other tech players. Snapchat-owner Snap’s futures rose 62%, fueled by its first ever profit, and Pinterest enjoyed a 32% pop.

Read more on the wild ride tech stocks are taking on Wall Street.

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Construction’s growth streak continues

Encouraging news in the construction sector this morning, as a survey from IHS Markit recorded the 12th straight month of growth. Investment in offices and other commercial projects helped propel the PMI index to a sixth month high.

Tim Moore, Director at IHS Markit, which compiles the survey said: “UK construction companies started the year on a strong footing as business activity picked up speed and new orders expanded to the greatest extent since last August. The composition of growth has become more tilted towards commercial projects as house building lost momentum and civil engineering remained subdued.”

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More bad news for Third Point investors

Disgruntled shareholders in activist investor Dan Loeb’s London-listed feed fund face more bad news.

Third Point Investors said today the discount between its share price and the value of the assets it holds widened to 18.1% in January, down from a 12% discount in November. The value of Third Point’s investments also slumped by 8.7% last month, outpacing declines seen on global benchmarks.

Some investors in the feeder fund have been lobbying Third Point’s management to do more to address the persistent discount. Loeb and his team have rejected the suggestions and claim they are already addressing the issues. The dispute has spilled over into a public war of words between the two sides and a proxy battle for a board seat.

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