European Stocks Rally
European stocks rose, following a rally on Wall Street that saw the tech-heavy Nasdaq 100 rise to a bull market, as investors bet that interest rates have peaked and bank instability will ease. The Stoxx Europe 600 Index was led by technology, real estate, and retail shares, with Hennes & Mauritz AB (ST:HM-B) posting strong Q1 results. The Nasdaq 100’s (NASDAQI:NDX) rise of 1.9% on Wednesday took its rebound from a December low to 20%, and signaled investor anticipation that the Federal Reserve would end its interest rate hike cycle and consider loose policies. S&P 500 (SPI:SP500) and Nasdaq 100 futures, as well as Asian equities, also increased.
Oil Steadies Near $73
Oil steadied after falling for the first time in three sessions, remaining close to $73 a barrel. The US Energy Information Administration revealed that crude inventories last week experienced their sharpest decline this year, however, demand for distillates, including diesel, remained low, suggesting a lacklustre economy.
Marvel Fires Chairman
Marvel Entertainment’s chairman, Isaac Perlmutter, has been fired by Disney, the company that acquired Marvel in 2009. Marvel will now be incorporated into larger business units. Perlmutter had reportedly clashed with Disney’s (NYSE:DIS) CEO Bob Iger on several issues. The decision to remove Perlmutter is part of a larger cost-cutting exercise aimed at saving $5.5bn.
Alibaba Considers Splitting
Alibaba (NYSE:BABA) has revealed it could give up control of some of its businesses if they choose to go public as part of a proposed split into six semi-autonomous units, each with its own CEO, and overseen by a holding company. CFO Toby Xu explained that the company would “evaluate the strategic importance of these companies to Alibaba” and decide whether or not to keep control after going public. Each unit would be able to secure outside funding and potentially pursue its own IPO.
Real Estate Valuations Plummet
European real estate firms are on track for their worst month since the pandemic’s beginning as banking instability is predicted to restrict credit access, causing property valuations to plummet. The MSCI Europe Real Estate index has experienced a 24% decline so far in March, close to its lowest point since early 2009. This underperforms the Stoxx 600 equity index, which has dropped 2.4% over the same period. Interest rate increases’ potential impact on the commercial real estate sector has worried investors and analysts for months, with Silicon Valley Bank’s (NYSE:SVB) failure in March and Credit Suisse’s (NYSE:CS) forced sale exacerbating these fears.
Revolut Criticized Over Audit
Revolut has faced criticism from its board and accountants for portraying a critical audit report as positive. The fintech firm released a public statement and hired lawyers to insist that an opinion by auditors BDO “confirmed that ‘the financial statements give a true and fair view’” of its affairs. However, BDO had warned of possible material misstatement of revenues, and that the 2021 accounts gave a true and fair view “except for the possible effects of the matters described in the ‘basis for qualified opinion’ section of our report”.
Centerview Tops in Deals
Centerview Partners, a boutique advisory firm, has achieved the highest ranking in deal activity in decades, outpacing Wall Street heavyweights such as Morgan Stanley (NYSE:MS) and Bank of America (NYSE:BAC). Based on the value of mergers and acquisitions so far this quarter, Centerview has climbed to third place from 14th in the same period last year, aided by its work on large deals and bank rescue deals in the US and Europe.
Meta May Ban Political Ads
Meta (NASDAQ:META) executives are considering a company-wide ban on political advertising in Europe due to concerns that Facebook and Instagram may not be able to comply with upcoming EU regulations. The regulations will require internet giants to reveal more information about the political groups behind online campaigns and the targeted users. Meta worries that the broad definition of political ads under the new plan will make it easier to reject all paid-for political campaigns on their platforms. The company is discussing the issue internally to determine the best course of action.
Green Investment Category Scrapped
Asset managers, including BNP Paribas (PA:BNP), BlackRock (NYSE:BLK), Amundi (PA:AMUN), and Pictet, have removed the label of the greenest category of investment from €175bn of funds in just over three months to January, reducing the market’s size by almost 40%. This led the European Commission to consider scrapping the category altogether to address the frustration of the market and concerns of greenwashing. The tightening of EU criteria for sustainable investments has made the rules unworkable, according to several people familiar with the discussions between the EU officials and industry.
Citadel Reopens Tokyo Office
Citadel, Ken Griffin’s hedge fund, plans to reopen its Tokyo office after almost 15 years of shutting down its Japan operations during the global financial crisis. The hedge fund manages $54bn in assets and is applying for licenses to operate in Japan’s markets. It expects to receive approvals by the end of this year, according to three people familiar with the matter.
EA Announces Layoffs
Electronic Arts Inc. (NASDAQ:EA) announced that it would lay off about 6% of its workforce and reduce its office-space footprint to focus its spending on the best growth opportunities in the videogame industry. The company did not specify the number of people to be laid off or which departments they would come from. It plans to redeploy some affected employees to other areas. The layoffs started earlier this quarter and are expected to continue through the early part of its next fiscal year. EA also plans to trim its real-estate spending and restructure some teams.
Bitcoin Climbs to $30K
Bitcoin (COIN:BTCUSD) is climbing towards $30,000, with a rise in risk appetite across global markets and waning concerns about the fallout from Binance’s legal issues. The largest cryptocurrency by market value rose for the second day, reaching $28,638 on Wednesday. Other tokens, including XRP, Cardano, and Polygon, rallied, with XRP jumping about 4.4%, Cardano increasing 7%, and Polygon rising 3%. Ether was up less than 2%.