Aurelia Butler

Investing.com — Netflix’s (NASDAQ:NFLX)’s profit warning issues the clearest challenge yet to growth stock valuations, while Peloton (NASDAQ:PTON) and wind turbine maker Siemens Energy also fall heavily on disappointing news flow. Russia and the U.S. hold last-ditch talks to avert war in Ukraine but hopes to avert conflict are low. Intel (NASDAQ:INTC) is planning to build another $20 billion chip factory, this time in Ohio. And oil prices slip from seven-year highs on concerns about a Covid-driven soft patch for the economy. Here’s what you need to know in financial markets on Friday, 21st January.1. Netflix struggles to grow; Peloton hits the brakesNetflix stock lost nearly one-fifth of its value after forecasting a sharp slowdown in subscriber growth in the current quarter. The stock is set to open at its lowest since April 2020, having effectively unwound almost all the gains it posted since the start of the pandemic.Netflix is hardly the first technology stock to fall out of bed in the last few months. However, it is by some distance the biggest and highest-profile company to do so. While investors may have dismissed the problems of other ech darlings as being down to company-specific issues, Netflix’s inability to sustain the narrative of unending growth that has driven its stock market gains for the last decade is more likely to have implications for its peers.Netflix wasn’t the only big bet on future trends to turn south overnight. Peloton stock – another early winner from the pandemic – tumbled after reports that it’s cutting production of its bikes and treadmills due to slumping demand, while Siemens Energy (DE:ENR1n), which owns one of the world’s biggest wind turbine businesses, fell 13% after warning that it was struggling to pass on higher costs to customers.2. Blinken, Lavrov go through the motionsU.S. Secretary of State Anthony Blinken is holding talks in Geneva, Switzerland, with his Russian counterpart Sergey Lavrov in an attempt to avert war in Ukraine.The talks are reportedly scheduled to last only 90 minutes and a press conference is scheduled for 7 AM ET (1200 GMT), which gives the two sides little time to achieve anything substantial.Ukraine is a sovereign state and a member of the United Nations. Russia, which already invaded it in 2014, annexing part of its territory and establishing breakaway republics in its east, has repeatedly that the mere possibility of it choosing to join NATO in the future is justification for a pre-emptive military invasion on its part. NATO has not offered Ukraine a path to membership.French President Emmanuel Macron and German Chancellor Olaf Scholz are also holding talks on Ukraine today. The two countries’ vulnerability to economic pressure from Russian energy supplies has effectively prevented any unified western response, as it did in 2014.3. Stocks set to open lower again; Nasdaq in correction territoryU.S. stocks are set to open lower again, with Netflix’s profit warning and developments at Peloton dealing a fresh blow to belief that the market can sustain what is still a historically high valuation.By 6:20 AM ET (1120 GMT), Dow Jones futures were down 0.1%, while S&P 500 futures were down 0.4% and Nasdaq 100 futures were down 0.8%. The Dow is set for a decline of over 3% this week, while the Nasdaq Composite is now firmly in correction territory, having declined over 10% from its November peak.Stocks reporting earnings later include oilfield services giant Schlumberger (NYSE:SLB), railroad operator Kansas City Southern (NYSE:KSU) and IHS Markit (NYSE:INFO). Estee Lauder (NYSE:EL) will also be in focus after its quarterly earnings late on Thursday came and went without any further negative shocks. 4. Intel ‘to build new chip plant in Ohio’The semiconductor cycle continues to turn. With signs that demand is set to outstrip supply for longer than thought, Intel has committed to building a new $20 billion chip factory in Ohio, according to Time magazine and others.It’s the latest multi-billion dollar capacity expansion to be announced by the world’s major chipmakers. Samsung (KS:005930) and Taiwan Semiconductor Manufacturing (NYSE:TSM) have, like Intel, also committed to large-scale investments over the coming years.Intel stock, whose modest performance over the last two years has left it less vulnerable to valuation-driven sell-offs, fell 0.4% in premarket trading.5. Oil slips as gasoline inventories continue to mount                               Crude oil prices slid on concerns that the latest wave of Covid-19 will hold world demand back in the short term, allowing the restoration of some depleted inventories around the world.U.S. gasoline inventories rose by over 5 million barrels for the third week in a row last week, although the rise was the smallest in those three weeks. Those numbers coincided with data showing jobless claims surged to a three-month high as the hospitality and travel sectors were hit by a sudden shift in customer behavior.By 6:40 AM ET, U.S. crude futures were down 1.8% at $83.98 a barrel, while Brent futures were down 1.7% at $86.87 a barrel. Baker Hughes’ rig count and the CFTC’s positioning data round off the week later. More

Good morning and happy Friday. How well did you keep up with the news this week? Take our quiz.Volodymyr Zelensky, Ukraine’s president, yesterday rebuked Joe Biden for suggesting that a “minor incursion” by Russian forces into his country might not prompt a severe allied response, forcing the US president to row back on his comments of a day earlier.“We want to remind the great powers that there are no minor incursions and small nations,” Zelensky wrote on Twitter.Biden sought to row back his comments from a day earlier, saying that any Russian incursion would spark sweeping sanctions.“If any, any assembled Russian units move across the Ukrainian border that is an invasion,” Biden said yesterday. “Let there be no doubt at all, if [Russian president Vladimir] Putin makes this choice, Russia will pay a heavy price.”The president’s tough talk came as Antony Blinken, secretary of state, prepared to meet his counterpart Sergei Lavrov in Geneva for talks on how to de-escalate the crisis as Russia sends more troops to its border with Ukraine.Blinken sought to reassert western unity and remind Moscow of the serious consequences of any Ukraine invasion ahead of his meeting with Lavrov. “We’ve been very clear throughout that, if any Russian military forces move across the Ukrainian border and commit new acts of aggression, that would be met by a swift, severe, united response from the US and its allies and partners,” said Blinken yesterday after talks in Berlin with counterparts from Germany, France and the UK. Moscow published its hardline demands on the foreign ministry’s website ahead of the meeting, including Nato removing all its forces from Bulgaria, Romania and other ex-communist states in eastern Europe that joined the alliance after 1997. Opinion: Putin has overplayed his hand on Ukraine, writes the former secretary of defense Robert Gates.Top Stories Today is a regularly updated short-form audio digest of the day’s top headlines, produced every weekday and read aloud by Microsoft Azure AI. Listen to the latest episode here.Thanks for reading FirstFT Americas. Here’s the rest of today’s news — GordonFive more stories in the news1. Bitcoin plunges to lowest level since August Bitcoin and other cryptocurrencies tumbled during a broader sell-off across markets after the tech-heavy Nasdaq Composite fell into correction territory. The price of bitcoin dropped as much as 7.4 per cent against the dollar during Asian trading on Friday to $38,261. The rout came a day after Russia’s central bank proposed banning crypto trading and mining. European stocks have also dropped in trading today.Related news: The Federal Reserve has launched what is expected to be a heated and consequential debate, its first, on the introduction of a central bank digital currency as it seeks to keep pace with financial innovation and maintain the supremacy of the dollar.2. Netflix shares plummet The streaming company’s shares fell 20 per cent after it said subscriber growth would fall substantially as consumers emerge from months of lockdowns. Peloton was hit by similar concerns after it rushed out preliminary second-quarter results and denied rumours it had halted production.3. US Senate committee advances bill to tame Big Tech’s power Members of the senate judiciary committee backed a bill that would reshape the technology industry. The American Innovation and Choice Online Act is now eligible for a vote by the full Senate, although it is not clear when this will be.Comment After years of the techlash and many months of political posturing and public hearings, things are finally coming to a head in Washington for Big Tech, argues Richard Waters. 4. JPMorgan pays chief Jamie Dimon $34.5m after record profits JPMorgan Chase paid longtime chief executive Jamie Dimon $34.5m for 2021, his biggest pay packet since 2008, after the largest US bank by assets reported record profits and revenues.5. Horta-Osório attended Euros final during London Covid breach António Horta-Osório attended the European Championship football final in July the same day he breached Covid-19 rules to watch the Wimbledon men’s tennis final, according to people with knowledge of his movements. Coronavirus digestJapanese inflation rose 0.5 per cent last month compared with the previous year, as rising energy costs added to households bills.Australia has issued an urgent appeal for foreign backpackers after a crippling labour shortage forced store closures and squeezed the fresh fruit and meat supply.Hong Kong authorities have vowed to take action against animal lovers seeking to prevent hamster owners from turning their pets in for euthanasia. The backlash over the hamster cull shows dissent is still simmering in Hong Kong, says Primrose Riordan. Lawmakers in Austria became the first in Europe to make vaccination against Covid-19 compulsory for all adults.The Biden administration’s pledge to begin distributing 400m high-quality N95 masks free of charge has drawn a mixed response from healthcare providers, trade unions and local manufacturers.FT readers shared their experiences of anti-vaxxers close to them. The days aheadSchlumberger earnings The world’s biggest oilfields services company is expected to report strong fourth-quarter results on the back of higher crude prices and a recovery in drilling, as we reported on yesterday.WHO Covid update The World Health Organization will host a virtual press briefing with an update on Covid-19. The WHO last week said countries were “a way off” from treating coronavirus as endemic. Davos wraps up Highlights from the final day of the World Economic Forum include special addresses by Australian prime minister Scott Morrison and US treasury secretary Janet Yellen. What else we’re reading and watchingWhy America has to keep on trucking Buried in this month’s shocking inflation data from the Bureau of Labor Statistics was the annual inflation rate for all trucking of 17 per cent and 25 per cent for long-haul operators, writes Gillian Tett. Trucking, she says, has become a potent sign of how hard it will be for the Federal Reserve and the Biden administration to halt inflation with monetary policy alone.

Activision workplace scandal turns gaming group into prime target Bobby Kotick’s groundbreaking career crystallised this week with his agreement to sell Activision to Microsoft for $75bn. Over the past three decades he has built a company with major footholds in gaming for mobile, consoles and PCs. But allegations of a toxic work workplace culture led to share price falls and provided Microsoft with an opening to pounce. Kazakhstan crisis challenges Beijing reticence to interfere abroad Beijing’s cautious approach to interventions in other countries’ affairs — a mainstay of its foreign policy — is increasingly coming into conflict with the need to protect its growing global interests, as it begins experimenting with security engagements abroad.Post-Brexit hurdles A year after the end of the Brexit transition period, EU citizens in the UK, British citizens in the EU and those with families spanning the English Channel are adjusting to their new status and loss of freedoms. Liz Rowlinson examines some of the hurdles expats have faced in one of the most complex and confusing years for cross-border moves.FilmKenneth Branagh’s bittersweet black-and-white Belfast and Guillermo del Toro’s Nightmare Alley, as well as Denzel Washington’s A Journal for Jordan, are among this week’s new cinema releases.

Chanté Adams and Michael B Jordan play real-life couple Dana Canedy and Charles Monroe King in Denzel Washington’s A Journal for Jordan © David Lee More

In a response to Reuters questions, the People’s Bank of China (PBOC) said it had trimmed rates on its standing lending facility (SLF) loans by 10 basis points (bps) effective Jan. 17.Under the SLF programme, financial institutions can obtain temporary liquidity from the central bank. The bank said it had lowered the overnight SLF rate to 2.95% from 3.05%, the 7-day rate to 3.10% from 3.20%, and the 1-month rate to 3.45% from 3.55%.Reuters had earlier reported, citing three sources with direct knowledge of the matter, that the bank planned to cut SLF rates following a series of reductions in China’s key interest rates, as Beijing eases monetary policy to shore up cooling activity. The economy grew 4% in the fourth quarter – the slowest rate in one-and-half years – weighed down by a deepening property market slump and weak consumption amid sporadic COVID-19 outbreaks.Analysts expect more easing measures in China in coming months, even as other major global central banks begin tightening policy and withdrawing unprecedented amounts of liquidity pumped into their economies to cushion the impact of the COVID-19 pandemic. China will appropriately step up policy support for the economy as it faces new downward pressure, Premier Li Keqiang was quoted by state media as saying.But Li, in remarks made on Thursday, reiterated that the government will not resort to “flood-like” stimulus.”We see that the monetary policy easing cycle is only at the start. We’re expecting more cuts,” said Paula Chan, senior portfolio manager at Manulife Investment. She said she expects China’s benchmark 10-year yield to test a low of 2.5%.The yield on benchmark 10-year Chinese government bonds stood at 2.705% on Friday evening. Earlier in the day, China’s 2-year yield touched its lowest level since June 2020, and was last at 2.16%.On Thursday, China trimmed loan prime rates (LPRs), the benchmark rates for mortgages and other types of loans. On Monday, the PBOC surprised markets by cutting the borrowing costs of its medium-term loans for the first time since April 2020, and also lowered a short-term lending rate.Nomura analysts, however, believe the economic boost from rate cuts so far will be quite limited, as they have been too small to have a material impact.The SLF was created by the PBOC in 2013 to meet the temporary liquidity needs of financial institutions, and its interest rates are determined by monetary policy direction and other money market rates in China.Chinese banks can borrow SLF loans from the PBOC using qualified bonds and other credit assets as collateral. More

BEIJING (Reuters) – China will appropriately step up policy support for the economy as it faces new downward pressure, Premier Li Keqiang was quoted by state media as saying.But Li, in the remarks made on Thursday, reiterated that the government will not resort to “flood-like” stimulus. More