Aurelia Butler

The so-called FAANGs have seen some of their COVID-era surges cut back this year, with Facebook (NASDAQ:FB) down 38%, Apple (NASDAQ:AAPL) down 5.7%, Amazon (NASDAQ:AMZN) down 8.5% and Netflix (NASDAQ:NFLX) and Google (NASDAQ:GOOGL) down 35% and 10% respectively..JPMorgan’s analysts estimate that on average tech firms that are yet to even make a profit have lost 30% of their value since peaks around September last year, while ‘fintech’ firms which focus on tech-savvy banking apps and tools have dropped 40%.”As Growth stocks weakened of late, they derated, but are still not outright cheap,” JPMorgan’s analysts said in a note to clients, adding that banks and commodity-linked stocks which have rallied this year thanks to rising oil and metals prices or interest rates were still “far from expensive”.The chance is that the earnings of ‘growth’ sectors might not be exceptional anymore, although the big driver remains bond market borrowing costs, which have shot up this year as top central banks have laid the groundwork for interest rate rises.Years of record-low rates have fuelled the tech stock rally but with those rates now rising again the appeal of stratospherically-valued tech stocks gets dimmer for investors, especially if their growth trajectories splutter.”We believe that bond yields will keep moving higher through the course of the year,” JPMorgan said referring to the bond market costs”Our fixed income strategists expect U.S. 10-year (Treasury) yields to reach 2.35% by the end of this year, and German 10-year yields to reach 0.5%.” Treasury yields are now at 1.92% and Germany bunds are at 0.2%.They also said that the tensions building between Russia and Western powers over Ukraine shouldn’t drive a return to big tech names, which carved out a safe-haven reputation during the pandemic.”While geopolitics could flare up into month end… we do not expect this to last, and call for risk-on internals to resume into spring”. More

The office of Prime Minister Ariel Henry on Twitter (NYSE:TWTR) posted a sliding scale of wage hikes that vary by economic activity, with the greatest increase going to workers in areas such as the electricity and telecommunications industries. Employees in the clothing manufacturing sector, which export finished products to U.S. retailers, received a 37% increase. That takes their wages to just under $7.50 per day, compared with the $15 per day that union leaders had demanded.For decades, Haiti has promoted itself as a center for clothing manufacturing thanks to low wages and proximity to U.S. markets. Workers over the years have complained that pay is too low to cover basic goods, which are often more expensive than in other countries due to weak infrastructure and gang violence. A group of U.S. members of Congress in November said they were asking the heads of 62 American companies that import garments from Haiti for information on “protections in place for workers employed by their companies and suppliers.”Haitian officials have in the past said that increasing wages by too much would leave the garment industries at risk of losing competitiveness with respect to other countries such as the neighboring Dominican Republic. More

BRASILIA (Reuters) – Brazil’s central bank chief Roberto Campos Neto said on Monday consumer prices continue to trend higher as core inflation speeds up despite aggressive monetary tightening by policymakers.”We actually see an inflation trend that is still growing,” he said in an online event hosted by television channel AgroMais.He noted that only Brazil and Russia’s current interest rates are above the neutral level, which supports the economy at full employment without pressuring or decelerating inflation. A higher than neutral level is necessary to cool inflationary pressures and bring prices closer to central bank targets, Campos Neto said.The Brazilian central bank has already raised rates to 10.75% from an all-time low of 2% in March last year, and indicated further adjustments to tame inflation that hit 10.4% in the 12 months through January.Despite rising borrowing costs, Campos Neto said he believed analysts who are forecasting meager growth for Brazil this year will adjust their numbers upwards due to recent domestic data.According to him, the most crucial point for the central bank today is to understand how the normalization of monetary policy will take place in an environment of higher global inflation, in which energy inflation “seems more persistent.”He stressed that the central bank was looking to analyze what effect this, along with China’s slowdown, would have on emerging markets. More

VILNIUS (Reuters) – The European Union must impose sanctions on Russia immediately after it recognised two Ukrainian breakaway regions as independent, the governments of the Baltic states of Estonia, Latvia and Lithuania said after Russia’s announcement.Russian President Vladimir Putin recognised the Donetsk and Luhansk regions in eastern Ukraine as independent entities on Monday, upping the ante in a crisis the West fears could unleash a major war.The three Baltic states, unlike Ukraine, are all members of NATO and the European Union.”The EU must impose sanctions immediately,” Latvian Foreign minister Edgars Rinkevics wrote on Twitter (NYSE:TWTR).”I remain convinced such a course of escalation should be met with sanctions,” his Lithuanian counterpart Gabrielius Landsbergis wrote in a tweet.In a joint statement, Rinkevics and Latvia’s president and prime minister called on the international community “to take the strongest possible measures to stop Russia’s aggression and offer assistance to Ukraine”.Separately, Estonia’s president called on the European Union to impose sanctions for what he called the “gross and unjustifiable trampling on international law”.Lithuania’s speaker of parliament will table a parliamentary motion to “never recognize” any change of status of the breakaway region, she said on Monday.”Recognition of Donetsk & Luhansk separatist ‘republics’ by Russia is an intolerable violation of international law. It also means unilateral withdrawal from Minsk agreements”, said Lithuanian President Gitanas Nauseda, referring to the Donbass ceasefire documents.The Baltic States said on Jan. 21 they will provide Ukraine with U.S.-made anti-armour and anti-aircraft missiles, days after receiving clearance from the U.S. State Department to send U.S.-made missiles and other weapons there.The foreign ministers of the three Baltic countries plan to visit Ukraine together later this week in a show of solidarity. More

BRUSSELS (Reuters) – The European Commission will unveil on Wednesday a proposal to make large companies operating in the European Union check that their suppliers from around the world do not use slave or child labour and that they respect environmental standards, a draft of the law showed.The proposal, called Corporate Sustainability Due Diligence, will also oblige boards of EU firms to ensure that their business model and strategy align with limiting global warming to 1.5 Celsius, as agreed under the Paris climate treaty. EU firms will have to make sure that their suppliers are not using forced labour, child labour, of inadequate workplace health and safety, exploitation of workers, or environmental offences like greenhouse gas emissions, pollution, or biodiversity loss and ecosystem degradation. The Commission proposal, seen by Reuters, will only become EU law after lengthy negotiations with the European Parliament and EU governments that are likely to take more than a year. “The law could be a true game-changer for corporations’ impact on the planet, or it could be a damp squib if big business lobbies get their wishes,” non-governmental organisation Friends of the Earth Europe said in a statement.The proposal estimates it would apply to 13,000 EU firms. The main criterion would be that a firm employs more than 500 people and has net turnover of more than 150 million euros. The threshold would be lower — 250 employees and 40 million turnover — for firms in high-impact sectors like clothes, shoes, animals, wood, food and beverages, oil, gas, coal, metals and metal ores, construction materials, fuels or chemicals. Still, that means 99% of Europe’s firms would be exempt, as they do not reach these thresholds. The law would also apply to around 4,000 companies from outside the EU, but operating in the 27-nation bloc. For them, the 150 million net turnover would have to be generated within the EU, or, if they fall in to the high-impact sector category, 40 million euros of turnover within the EU.Compliance with these goals would be monitored by EU governments. Companies ignoring them would face fines.EU firms would also face civil liability if the offence against human rights or the environment was committed by its supplier with whom they have lasting and frequent cooperation.The private lawsuit against an EU company for misconduct of its supplier would, however, have to show the offence could have been foreseen, prevented, ceased or mitigated with appropriate due diligence measures by the EU firm. “It will in practice be difficult to prevent all risks through global value chains,” the Commision draft said. “Based on what we know this is a massive step in the right direction in the fight against corporate abuse,” said Aurelie Skrobik, Corporate Accountability Campaigner at Global Witness.”This said, we need to ensure that the law holds companies liable for harms throughout their entire supply chains and that there are no loopholes. There should be no ambiguity in the final text – victims must be able to seek justice through EU courts,” she said. More