Big Tech Companies Feel the Effect of the Current Economic Climate

Good Morning,

State of emergency declared in Thames-Coromandel in wake of storm, Largest insurer expects to pay $383 million in Auckland flood claims, Major power outage reported at Christchurch Hospital, Big Tech earnings show digital ads market not out of the woods, and Cathie Wood Says ARKK Is ‘the New Nasdaq’.

Let's jump in.

Before The Bell

Markets

• Markets continue their positive trend. The NZX 50 moved +0.4% higher to 12,197.15, the ASX 200 gained +0.6% to 7,558.10, the S&P 500 increased +1.5% and the Nasdaq increased +3.3%. All treasury bond yields continued to decrease

• Oil Suffers 5% Weekly Loss as China Optimism Dims (BBG)

• U.S. job growth likely remained strong in January amid a persistently resilient labor market, but an anticipated further slowdown in wage gains should give the Federal Reserve some comfort in its fight against inflation (RT)

• The Nasdaq and S&P 500 ended higher on Thursday and touched roughly five-month highs as a more dovish-than-expected message from Federal Reserve Chair Jerome Powell boosted equities and Meta Platforms shares soared on rigorous cost controls (RT)

• Apple Inc., Amazon.com Inc. and Alphabet Inc., technology bellwethers with a combined market value approaching $5 trillion, posted results Thursday that show an economic slowdown is throttling demand for electronics, e-commerce, cloud computing and digital advertising — mainstays of the global tech economy (BBG)

Earnings and Data

• The European Central Bank (ECB) and Bank of England (BoE) hiked by 50 basis points each on Thursday, with the BoE signalling the tide was turning against inflation and the ECB indicating at least one more hike was on the horizon (RT)

News Summary

• Briscoe Group expects to post a record full-year profit but warns of tougher times ahead as deteriorating economic conditions hurt consumer sentiment (Stuff)

• Tennis star Nick Kyrgios' assault charge over shoving ex-girlfriend dismissed (Stuff)

• The country’s largest insurer says it has had more than 15,000​ claims from the Auckland and North Island floods, and expects to pay out more than $383 million​ in claim (Stuff)

• Christchurch Hospital is dealing with “a major power outage” that has affected all systems, including power, IT and phones (Stuff)

• Mayor Len Salt has declared a pre-emptive state of emergency in Thames-Coromandel district. A state of emergency can be declared when there is an event that might cause loss of life or property, which cannot be dealt with by emergency services in the normal fashion, the council said in a statement on Friday afternoon (Stuff)

• Australia's two largest supermarkets have been ordered to dump thousands of kilograms of soft plastics in landfill a failed recycling program. Coles and Woolworths have been served notice by the NSW Environment Protection Authority to remove more than 5200 tonnes stockpiled at 15 sites across the state (9 News)

• MDMA and psilocybin approved to treat some mental health conditions from July 1 (9 News)

• Apple Again Dominates Smartphone Profit, Taking Record 85% Share. Apple Inc.’s iPhone set a new high for its share of profits from global smartphone sales in 2022, after navigating a dire year for the industry better than competitors (BBG)

Deal Flow

Investments / M&A

• Australian billionaire James Packer is considering an investment in Argentina’s energy or mining sectors, according to people familiar with the matter (BBG)

• Malaysia's Petronas is finalising its first acquisition of an Australian renewable energy business, set to pick up German firm Wirsol's solar farms and a large development pipeline, two people involved in the transaction said (RT)

• Thungela Resources Ltd., South Africa’s largest exporter of coal burned in power stations, has agreed to buy a mine in Australia as it seeks to diversify its operations (BBG)

• French oil major TotalEnergies and Iraq are taking further time to hammer out key sticking points in a long-delayed $27 billion energy deal which Baghdad hopes will revive foreign investment in the country (RT)

Equity Raises

• FirstEnergy Corp. will raise $3.5 billion by agreeing to sell an additional 30% stake in its transmission unit to an affiliate of investment firm Brookfield Asset Management (BBG)

• Zur Rose unexpectedly agreed to sell its Swiss business to Migros subsidiary Medbase in order to focus on expanding in Germany, the Swiss online drug retailer said on Friday, sending its shares soaring on their best day ever (RT)

Daily Picks

Apple Inc. on Thursday forecast that revenue would fall for a second quarter in a row but that iPhone sales were likely to improve as production had returned to normal in China after COVID-related shutdowns (RT)

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