Bloomberg
“Treasury Rout Sinks Stocks as Rate Angst Deepens: Markets Wrap.”
The selloff in U.S. assets picked up steam as strong jobs data increased the likelihood the Federal Reserve will lift rates next month. Equities headed for the worst week in two years and Treasuries tumbled to a four-year low.
The S&P 500 Index’s slump in the five days surpassed 2.5 percent after the 10-year Treasury yield popped above 2.85 percent for the first time since January 2014. Bloomberg’s dollar index surged to erase a weekly loss. The Nasdaq 100 Index slipped, even as Amazon.com Inc. rallied to a record on earnings. Apple Inc. lost 1.2 percent amid a disappointing sales forecast, while Alphabet Inc. sank more than 5 percent as earnings missed.
U.S. hiring picked up in January and wages rose at the fastest annual pace since the recession ended, as the economy’s steady move toward full employment extended into 2018. Equities are being tested by the surge in bond yields, with some fund managers saying 3 percent U.S. 10-year rates would signal a bond bear market. The level is seen by many stock-watchers as a potential trigger for a correction in equities.
In Europe, a bond selloff deepened across the continent, and equities dropped for a fifth straight day, the longest streak since November. Disappointing results from companies including Deutsche Bank AG and BT Group Plc. paced losses, with Germany’s DAX giving up the year’s gains, capping the worst weekly decline since 2016. Bund yields reached a fresh two-year high, while the euro and British pound weakened. Japanese debt gained and the yen declined after the Bank of Japan intervened to stem the rise in rates.
Elsewhere, oil edged lower, though still trading near its highest level since 2015 in New York. Bitcoin continued to slide after a miserable January, falling below $8,000.
Reuters
“On Super Bowl Sunday, beer and pizza mainstays face challenges.”
When Americans snack on pizza, beer and guacamole this Sunday as they watch the Philadelphia Eagles square off against the New England Patriots, the Super Bowl will not be the only contest going on in their living rooms. Companies long associated with Super Bowl staples and their ingredients, including Papa John’s International (PZZA.O) and Anheuser Busch InBev (ABI.BR), are locked in their own competitions to beat rivals and win the favor of customers and investors.
In November, Papa John’s founder and then-Chief Executive John Schnatter blamed its lukewarm pizza sales on the league’s handling of players’ national-anthem protests against racial inequality. The player controversy has hurt the NFL’s already dwindling TV viewership. Schnatter’s comments generated a huge backlash on social media, prompting the company to apologize, and it later announced Schnatter’s resignation.
Larger rival Domino’s Pizza (DPZ.N) is also switching leaders, with Chief Executive Patrick Doyle set to step down in June. Doyle presided over a successful turnaround and led the industry in leveraging data analytics to boost sales, earning him acclaim on Wall Street. His replacement by Richard Allison, currently president of Domino’s international business, may create uncertainty among investors.
Anheuser-Busch InBev’s Budweiser commercials have long been a Super Bowl mainstay, but the world’s largest brewer faces growing competition from smaller, younger rivals offering IPAs and other premium beers to drinkers with increasingly discriminating taste buds. U.S. consumers spent $1.3 billion on beer in the two weeks ahead of last year’s Super Bowl, including $166 million on craft brews, according to Nielson.
Smaller rivals Craft Brew Alliance (BREW.O), which makes Kona, and Boston Beer Company (SAM.N), which sells Samuel Adams, have seen their stocks surge over 20 percent in the past year. But those gains have left Craft Brew Alliance trading at 56 times expected earnings and Boston Beer Company at 27 times earnings, potentially expensive valuations. Meanwhile, AB InBev has snapped up 10 U.S. craft brewers in the past decade, and its stock is trading at a less expensive 22 times expected earnings.
BBC News
“Amazon 2017 sales jump by nearly a third.”
Online retailer Amazon saw sales jump by nearly a third last year, helped by growth in its Prime delivery service. Full-year revenue came in at $177.9bn (£124.6bn), a rise of 31%, while profit hit $3bn, against $2.4bn in 2016.
The company reported record sales in the final three months of the year, driven by a surge in online shopping over the holiday season and demand for its cloud services. Shares in Amazon rose by 6% in after-hours trading.
The company said more than five billion items were sent using its Prime shipping service worldwide in 2017.
It added that more «new paid» members joined the scheme than in any previous year, both worldwide and in the US. More than four million people signed up in one week alone last quarter Amazon said.
Prime members have access to fast shipping, exclusive TV shows on Amazon Prime Video and extra benefits when using the company’s voice-controlled Alexa digital assistant. Amazon has focused on boosting Prime subscribers, which its chief financial officer has previously called its «most important customer base».
Prime subscribers tend to do more shopping with the company, although Amazon has not said how many people it has signed up so far. The company’s boss Jeff Bezos said projections for its Alexa assistant had been very optimistic and the company had «far exceeded them». «We don’t see positive surprises of this magnitude very often – expect us to double down.»
The company said fourth-quarter sales rose by 38% to hit a quarterly record of $60.5bn (£42.4bn). Fourth-quarter profits more than doubled to $1.9bn against $749m in the last three months of 2016. The figures were boosted by a tax benefit of about $789m related to the new US tax law. The results also include the contribution from the Whole Foods grocery store chain, which Amazon bought last year.
Bloomberg
“Bitcoin Whipsaws Investors as Bubble Shows Signs of Bursting.”
Bitcoin whipsawed investors, falling below $8,000 for the first time since November before recovering most of today’s losses, as a miserable 2018 continued for cryptocurrencies, with investors confronting a mounting list of concerns about the future of the industry.
Since reaching a record high of $19,511 on Dec. 18 shortly after the introduction of regulated futures contracts in the U.S., Bitcoin has wiped out more than half its value amid waves of negative news. Setbacks included escalating regulatory threats from authorities around the world including India, South Korea, China and the U.S., a record $500 million heist at Japanese exchange Coincheck Inc., fears of price manipulation and Facebook’s ban on cryptocurrency ads.
Japanese authorities raided Coincheck’s offices Friday morning, a week after the robbery, hauling out documents and computers as evidence. The inspection was conducted to ensure security for users, Finance Minister Taro Aso said.
“Bitcoin is in trouble,” Lukman Otunuga, a research analyst at foreign exchange broker Forextime Ltd, wrote in a note Friday. “Price action suggests that bears are clearly in control, with further losses on the cards as jitters over regulation erode investor appetite further.”
The largest digital currency dropped as much as 16 percent to $7,643, before trading at $8,715 at 9:52 a.m. in New York, according to consolidated Bloomberg pricing. Bitcoin is down 21 percent on the week. Rival coins Ripple, Ether and Litecoin tumbled at least 18 percent as losses continued to spread across cryptocurrencies.
Nouriel Roubini of Roubini Macro Associates said Bitcoin is the “mother of all bubbles,” and its bubble is now bursting, speaking in an interview on Bloomberg Television. He said “virtually every” Group of 20 country is talking about cracking down on the phenomenon as policymaker worries grow.