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Bitcoin is being beaten up and tech shares are tanking again at the start of a big earnings week, where investors will hold out hope positive results from the likes of Apple, Microsoft and Tesla might turn sentiment for the sector.
At just over $33,000, bitcoin is about 51 per cent down from the record high it reached in November, reports Alphaville. Ethereum is trading at around $2,200 — about 54 per cent down since November. Dogecoin is under 13 cents, having lost 82 per cent since May. Bitcoin had dropped to a six-month low on Saturday as the cryptocurrency market was swept up in a powerful shift by investors out of speculative assets.
The tech-heavy Nasdaq was down 3.5 per cent at noon in New York today, mirroring a slide in Europe and Asia. Its losses mean it is more than 17 per cent down from its all-time high struck in November.
There was contagion for the wider market on Monday with the S&P 500 down 3 per cent as market expectations solidified around the view that the US central bank will need to rapidly unwind stimulus measures that have fuelled a surge in equities over the past two years.
The FT View is that markets may have got ahead of themselves with the bull market but they should not overdo the correction either. In his Unhedged newsletter, Robert Armstrong says that some analysts are calling this a down year in equities, but that does not mean a crash.
The Internet of (Five) Things
1. Peloton under activist attack
Peloton has come under attack from an activist investor who has demanded that the maker of connected fitness bikes and treadmills sack its chief executive and explore a sale of the company, after its share price collapsed more than 80 per cent over the past year. Blackwells Capital accused Peloton co-founder John Foley of losing $40bn in shareholders’ wealth owing to alleged mismanagement.
2. German publishers oppose Google cookies plan
Germany’s largest publishers and advertisers are demanding that the EU intervene over Google’s plan to stop the use of third-party cookies. Axel Springer, the publisher of titles such as Bild and Politico, is among the hundreds of publishers, advertisers and media groups that have argued Google is breaking EU law.
3. Chains come off IPO lock-ups
A record number of US initial public offerings last year allowed founders and early investors to sell shares before the end of a traditional 180-day waiting period. In 2021, 25 per cent of IPOs — 91 in all — included early lock-up period releases, according to Renaissance Capital.
4. The case for the BBC’s licence fee
The case for public service broadcasting has become more powerful in an age of proliferating new media and news services, not less, writes Martin Wolf. Public service broadcasting offers three essential goods: a foundation of shared news; an institution able to hold powerful figures to account; and a cornucopia of cultural assets.
5. Netflix faces a dystopian future
The streaming giant appeared to have the wind at its back heading into the end of 2021, with the success of Squid Game and Don’t Look Up. But star-studded releases were not enough to give it a significant boost in subscribers in the fourth quarter. What happens if popular new shows are not enough to lure lots of new subscribers to Netflix any more? asks Chris Grimes in LA.
Tech week ahead
Monday: Big Blue reports after the market close, with IBM’s fourth-quarter financials being the first since it completed the spin-off of managed infrastructure business, Kyndryl, in November. IBM announced on Friday it plans to sell its Watson Health assets to private equity firm Francisco Partners as it directs more attention to cloud computing.
Tuesday: Software and services giant Microsoft is expected to show growth in second-quarter profits and revenues, thanks to demand for cloud and Office 365 services and features. Commentary on the company’s $75bn deal to buy Activision Blizzard will be expected. Telco Verizon Communications and chipmaker Texas Instruments also report.
Wednesday: Electric vehicle pioneer Tesla and chipmaker Intel are the star earnings attractions, while AT&T and LG Display also report.
Thursday: IPhone maker Apple is expected to report a quarter burdened by supply chain issues even as demand for its smartphone remained strong. Other companies reporting include, Comcast, LG Electronics, MediaTek, Samsung Electronics and STMicroelectronics.
Friday: China’s embattled Ant Group is due to officially close its Xianghubao mutual aid platform, which has accumulated more than 100m registered users since its launch three years ago. The move is a response to Beijing’s tighter scrutiny of financial services in the technology sector. SK Hynix will report earnings.
Tech tools — An avalanche of earbuds
When Alexandra Heal tried to fix her faulty wireless earbuds, she discovered that the world is drowning in dead gadgets. Nearly 750m AirPods, Samsung Galaxy buds and the like will be defunct by 2026, yet only one-fifth of electronic waste is currently being recycled. So Alexandra tried to fix her pair — and fell down a very tiny, very deep rabbit hole in this amazing interactive piece.
