Good morning! Here’s what you need to know on Wednesday.
The British government lost a landmark legal challenge surrounding the triggering of Brexit. The Supreme Court ruled on Tuesday morning that the government must allow Parliament to vote on the triggering of Article 50. The court’s head, Lord Neuberger confirmed that the Supreme Court’s judges voted 8-3 to reject the government’s appeal, and ruled that it must put the triggering of the article to a vote in Parliament before any formal action can be taken.
As a result, Brexit secretary David Davis said that the government will start the process of triggering Article 50 “within days.” “We will within days introduce legislation to give the government the legal power to trigger Article 5o and begin the formal process of withdrawal,” he told the House of Commons. “This will be the most straightforward bill possible to give effect to the decision of the people and respect the Supreme Court judgment.”
Barclays analysts said they do not see “meaningful upside potential” in Apple stock in a note distributed to clients on Tuesday. Basically, Barclays analyst Mark Moskowitz believes that investors are putting too much stock in the iPhone 8 “supercycle” later this year. Apple is expected to release a significantly redesigned iPhone this fall that some analysts believe will return the product line to sales growth given the large buildup of current iPhone users waiting to upgrade.
A Microsoft employee says the company could axe plans to expand its UK data centres if tariffs are introduced after Britain leaves the European Union. Speaking in an online event about what Brexit means for tech, Microsoft UK government affairs manager Owen Larter said that the American tech company might focus on building out its European data centres at the expense of its two British ones if UK’s Brexit deal imposes import tariffs on hardware and other goods.
The U.S. departure from the Trans-Pacific Partnership could help President Xi Jinping’s effort to cast Beijing as a champion of free trade. The move may also increase official interest in a Chinese-led alternative trade deal. The TPP, which excluded China, has been seen as a gambit by Trump’s predecessor, Barack Obama, to counter Beijing’s influence.
The tech-heavy Nasdaq and benchmark S&P 500 rallied to all-time highs on Tuesday. The Dow gained too, but not enough to hit 20,000. It was day two of the busiest week of Q4 earnings season.
Japanese trade data for December has come in mixed, with strong growth in exports offset by a steeper decline in imports. According to Japan’s Ministry of Finance, exports grew by 5.4% in the 12 months to December, above the 1.2% increase expected by economists and 0.4% contraction reported in the year to November.
Japan’s 30-year bond yields surged to the highest level in almost 11 months as investors snapped up equities and trimmed safe haven bets. The rise comes amid improved corporate results which have reignited investor optimism for global economic growth. The 30-year paper yielded 0.83%, the highest level since March 2016, taking gains in the session to 3 basis points.
AppDynamics, which would have been the first big tech IPO of 2017, is getting purchased by networking titan Cisco for $3.7 billion in cash and equity awards, Cisco announced on Tuesday afternoon. The surprise deal, on the eve of a hotly anticipated stock offering, is likely to raise more uncertainty about Wall Street’s appetite for richly-valued tech companies.
Publishers are receiving far less money than might have been expected from placing their content on the third-party distribution platforms owned by companies including Facebook, Google, and Snapchat, according to a new report. The report, from premium publisher trade body Digital Content Next (DCN), claims that the (mean) average premium publisher generated $7.7 million in revenue from distributing their content on third-party platforms in the first half of 2016 — equivalent to around 14% of their overall revenues in the period.