– It was a bad few weeks for tech companies with the Twitter and Meta layoffs, and then Amazon lost $1 tn in market value, reported Metro via Bloomberg. For perspective, that’s almost like losing what Google’s parent Alphabet is worth, which is now around $1.13 tn. The loss makes Amazon the first public company ever to lose $1 tn, according to Bloomberg. Amazon stock has lost around 48 percent of its value this year alone, compared with July when the company’s market cap almost touched $1.9 tn. But it isn’t the only tech giant that’s bleeding money: the top five American tech companies have already lost nearly $4 tn in market value so far this year, thanks to rising inflation and a slow economy.
– After 18 years of bumper growth, a new reality dawned on Meta earlier this week as chief executive Mark Zuckerberg announced a drastic retrenchment of his company’s workforce, noted the Financial Times (paywall) in a report. The deep job cuts, equal to about 13 percent of its workforce, or 11,000 employees, were testament to the competitive threats that Meta – which owns Facebook, Instagram and WhatsApp – is facing from deep-pocketed Chinese rival TikTok. They were also the first sign that Zuckerberg has been forced to moderate, at least partly, his costly bet on building a digital avatar-filled metaverse amid heightened scrutiny from investors over his spending. ‘The bubble has burst,’ one former Meta staffer said.
– US stocks soared after fresh data showed inflation eased in October, with the Dow industrials adding 1,200 points, reported The Wall Street Journal (paywall).
Investors were on the lookout for evidence the Federal Reserve’s interest-rate increases are tamping down price pressures and they liked the latest data: all three US indexes had their best days since 2020. Tech stocks have been at the center of the market turmoil lately, and were some of the biggest beneficiaries of Thursday’s rally. Cryptocurrencies and related assets remained volatile in the wake of turmoil at crypto exchange FTX.
– Meanwhile, Forbes (paywall) noted that the surge of investment assets into ESG funds is empowering investors and activists to demand action from companies around the world. ESG funds are experiencing record inflows, with Broadridge research estimating that retail and institutional ESG assets under management could grow from approximately $8 tn today to roughly $30 tn by the end of the decade. By 2025, it is expected that around 33 percent of all global assets under management will have ESG mandates.
– Lawyers began preparing clients for potential scrutiny from Republicans over ESG issues after the mid-term elections, the FT reported. The largest US companies were preparing for a wave of congressional hearings after the mid-term elections, as Republicans vowed to pursue investigations into businesses’ environmental and social positions. Control of both houses of Congress could swing to the Republicans, as polls showed Democrats falling behind in several potentially pivotal races.
– In crypto news, retail investors started snapping up crypto-linked stocks being beaten down during the plunge in cryptocurrency prices that’s centered on the liquidity crisis surrounding FTX, reported Markets Insider, according to research conducted by research and analysis company Vanda. ‘Retail is buying the dip again,’ Vanda said regarding shares of crypto-linked companies and ETFs in a note published Wednesday. The company’s VandaTrack tool monitors retail activity in more than 9,000 stocks and ETFs traded in the US.
– In related news, Yahoo! Finance said the FTX crisis serves as a warning to retail investors. The potential collapse of one of the world’s largest cryptocurrency exchanges this week saw several big-name investors get burned on their stakes in the company, providing yet another warning to smaller, mom-and-pop investors about the dangers of following major funds and celebrities in putting money to work in volatile sectors.
Cryptoexchange FTX shocked the market earlier this week after announcing its rival, Binance, signed a non-binding letter of intent to acquire the company as it grapples with a liquidity crunch.
– Financial regulators looked into the biggest private equity firms’ use of WhatsApp and other messaging apps for work, in a signal that the US is ramping up its push to police Wall Street’s electronic communications, reported Bloomberg (paywall). Apollo Global Management, Carlyle Group and KKR said in regulatory filings this week they had received letters from the SEC on their use of electronic messaging for business.
Financial firms must follow rules on monitoring business communications to head off improper conduct. Investment advisers and money managers are required to retain records related to the provision of investment advice.
– In China, Hong Kong stocks jumped more than 7 percent as Chinese state media reported Covid-19 measures for travel will be eased, reported CNBC. Shares in Asia-Pacific also rose after the release of US inflation data in October raised investor hopes that inflation had peaked. Bloomberg noted in a report that foreigners – who had largely been sitting out this month’s rebound – piled into onshore shares on Friday, buying a net ¥14.7 bn ($2.1 bn) via trading links with Hong Kong. That was the biggest single-day purchase in about two months.
– Abu Dhabi Global Market (ADGM) announced the publication of a consultation paper on a proposed comprehensive sustainable finance regulatory framework, according to a report by Finextra. It covers rules on sustainability-oriented investment funds, managed portfolios and bonds and a framework on environmental disclosures by ADGM companies. The measures in the paper aim to enable accelerated growth of a sustainable finance ecosystem in the jurisdiction and support the UAE’s transition to net-zero greenhouse gas emissions.