A BRIEF OVERVIEW:
- Europe’s services sector means business
- Japan’s bond rally shows optimism in the region and beyond
- Salesforce has a shock shake up
- Silvergate bank is another caught in crypto platform’s collateral
Europe’s services sector means business
Data released showed business activity in the services sector was surprisingly strong, suggesting that the Eurozone might dodge a recession.
Lufthansa, the German airline, also released promising earnings data for 2022 and announced a strong 2023 forecast, despite the ongoing fears of reduced consumer spending.
The only thorn in the side of Europe’s optimistic news was the announcement of Blackstone’s Nordic property backed bond default, as they failed to make their payment to bond holders.
It comes as no surprise that they cited the difficulties of rising living costs and falling property prices.
Japan’s bond rally shows optimism in the region and beyond
Japan announced a change to their central bank director last week, which could spell a new approach to their interest rate strategy.
They have been notoriously contrary to other large global nations in their interest rate approach which has negatively affected bond yields.
Last year was rough for the region too, with markets dragged down by the zero Covid-19 measures implemented by China.
As these measures have started to relax, optimism has reentered the local markets and shows signs of promise for the next year.
A strong dollar has usually also spelled bad times for these nations, as they have historically pegged their currencies to the dollar, meaning that they keep it at a similar value.
As they move away from the dollar, the powers of the US currency and markets may wane on these growing nations.
Salesforce has a shock shake up
The tech giant Salesforce shocked Wall Street on Wednesday with its latest earnings report.
Having aggressively acquired multiple companies last year, many feared that the directors of Salesforce were prioritising growth over profits.
Elliott Management, a US based hedge fund, had quietly been acquiring shares of Salesforce and using their growing majority to pressure management into taking a more profit driven approach.
However, the announcement of growth 24% higher than analysts predicted stunned the markets and shares soared by an optimistic 12%.
This news suggests that tides are turning in a downtrodden tech sector.
Silvergate bank is another caught in crypto’s collateral
US bank, Silvergate Capital, is 30-years-old but pivoted its strategy entirely to the crypto market back in 2013.
On Wednesday the delayed publishing of company results sent jitters through markets, as the effects of the collapse of the crypto platform FTX started to show the toll it has taken on other key players in the crypto scene.
When results were revealed, the impact of selling nearly $5 billion worth of assets to create liquidity for crypto withdrawals, as well as growing pressure from regulators, didn’t reveal a pretty picture.
Shares fell by over 50% after the earnings announcement, but major crypto currencies Bitcoin and Ethereum seemed to sail through the week relatively unharmed.