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International Market Update
- European stock markets closed lower Thursday as investors reacted to policy decisions by the European Central Bank and the Bank of England in the face of continued inflationary pressures. In the United Kingdom, the Bank of England raised interest rates again and began the process of quantitative tightening. As expected, the Monetary Policy Committee of BOE voted unanimously to raise the key interest rate by 25 basis points to 0.5%. Separately, the European Central Bank opted to keep rates unchanged, resisting growing pressure to curb stimulus plans.
- U.S. stocks fell Thursday as renewed investor optimism about major technology companies, sparked by a string of strong earnings, took a hit after disappointing quarterly results from Facebook parent Meta Platforms. Meta Platforms shares plunged 26.4% after the company’s quarterly profit fell short of expectations. The company also issued weaker-than-expected revenue guidance for the current quarter. Other social media stocks followed Meta’s lead yesterday. Shares of Snap fell 23.6% and Twitter fell 5.5%.
- Stocks in the Asia-Pacific region were mixed this morning after the tech-heavy Nasdaq Composite fell nearly 4% overnight. In Australia, the S&P/ASX 200 Index lost about 0.14%. The broader All Ordinaries Index lost 7.40 points, or 0.10 percent, to 7,367.20. Australian markets closed slightly lower Thursday. Among the major mining companies, Rio Tinto and Mineral Resources each fell about 1%, while BHP Group was down more than 1%.
In International news
Amazon shares rise on cloud sales gain and big profit from Rivian stake
Amazon reported Thursday that fourth-quarter revenue rose 9% and that the company made a nearly $12 billion profit from its stake in electric vehicle maker Rivian. Amazon forecast first-quarter revenue between $112 billion and $117 billion, below the average estimate of $120 billion, according to Refinitiv. Fourth-quarter operating profit will be between $3 billion and $6 billion. Fourth-quarter revenue rose 9.4% to $137.4 billion. This is Amazon’s first period of single-digit growth since 2017, and the first time Amazon has released revenue from its fast-growing advertising business. Advertising services grew 32% year-over-year to $9.7 billion in the quarter. Previously, Amazon had reported advertising revenue in its “other” business segment. Amazon’s big profit gain at Rivian is the result of the electric vehicle maker’s IPO in November.
Ford misses Wall Street expectations
Shares of Ford Motor slid after the company reported its fourth-quarter results Thursday, which missed Wall Street’s profit expectations by a wide margin and revenue by a slight margin. For the quarter, Ford’s North American operations contributed the most to the automaker’s profit, rising 68% to $1.8 billion from the year-ago quarter. International losses included $150 million in China, down 130%, and $159 million, down 139%, in Europe. The automaker’s fourth-quarter net income rose to $12.3 billion from a loss of $2.8 billion in the final three months of 2020. That includes an $8.2 billion gain from its investment in electric vehicle startup Rivian Automotive industry.