Good morning! Here’s what you need to know in markets on Monday.
Federal Reserve chairman Janet Yellen testified in front of United States Congress yesterday. Yellen told senior US politicians that the Fed is not subsidising big banks, and, in a set of prepared remarks said that the Fed is watching developments in markets and the economy very closely. Yellen will speak in front of congress again on Thursday.
Australian shares rallied on Thursday. The ASX 200 index was up by 0.95% to 4,821 as l
ocal shares ended a run of hard falls after better signs from offshore markets. The ASX, however, is still down 3% this week and almost 9% from the start of 2016.
Amazon is buying back $5 billion (£3.4 billion) worth of shares. The world’s largest e-commerce company, said on Wednesday that its board has authorised the buyback program, which will replace a $2 billion (£1.38 billion) repurchase program approved in 2010.
Mining giant Rio Tinto is in huge trouble. The company’s underlying earnings for 2015, fell by almost half to $4.54 billion (£3.1 billion), in a sign of just how much the commodity price crash is biting. That sent profits tumbling from $6.15 billion (£4.2 billion) in 2014, to a loss of $866 million (£595 million) last year.
Goldman Sachs says you don’t need to worry about China. Jari Stehn, Goldman’s senior global economist, says that the risks to developed nations from an accelerated China slowdown are “probably not very big” because “exports to China, and more broadly to Asia ex-Japan, as a share of GDP are small — around 1% — for most DM countries with the exceptions of Australia, Japan, and Germany.”
BP CEO Bob Dudley says that by the end of the year every “swimming pool in the world will be full of oil.” Dudley said on Wednesday that he was “very bearish” on oil prices for the first half of 2016 but forecast that supply and demand will balance out in the second half, but by that point the oil supply glut will grown even more.
Gold is at a nine-month high. The price of the precious metal — a traditional safe haven for investors worried about market volatility — passed the milestone of $1,200 per ounce overnight. At the time of writing, 6:40 a.m. GMT, gold is trading at $1,209.50, up 1.25%.
Twitter’s annual results were lacklustre. Twitter’s user growth came to a halt in the fourth quarter of 2015, sending the company’s shares down as much as 13%. Monthly user numbers came in 3 million below estimates, at 320 million, while revenues just about met analyst expectations of $710 million (£488 million).
There’s a big pharmaceutical deal happening in Europe. The Financial Times reports that Mylan, the Netherlands-based pharmaceuticals group, has agreed to acquire Sweden’s Meda for 83.6 billion krona (£6.8 billion; $9.9 billion) including debt. Both companies make generic, copycat drugs.
The boss of the world’s biggest shipping firm has warned about the state of global trade. Nils Andersen, the boss of Danish firm Maersk said on Wednesday that global trade is now “
worse than in 2008″ alluding to the shipping crash which coincided with the global financial crisis. Andersen made the comments after Maersk reported an 82% fall in profits.
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