Overseas financial media focus: Money markets expect the Federal Reserve to raise interest rates by 50 basis points at a time

Financial Associated Press, January 19, overnight, overseas markets focused on the global economy and company dynamics. In terms of the global economy, money markets expect the Fed or a 50 basis point rate hike, which will be the biggest move since 2020; Bank of America said that the earnings season started weakest since the epidemic, and wage pressure is the biggest risk to corporate earnings. In terms of company dynamics, Apple's mobile phones accounted for 22% of global smartphone shipments in 2021, ranking first; the largest acquisition in the history of gaming! Microsoft spent $68.7 billion to acquire Activision Blizzard; AT&T and Verizon will temporarily restrict 5G signals near airports to avoid affecting flights. In addition, crude oil surged to a high since 2014, and the Biden administration said it was continuing to work with oil-producing countries.

Bloomberg: Money markets expect the Fed or a 50 basis point rate hike to be the biggest move since 2020

Money market prices show that more and more investors expect the Fed to raise borrowing costs on a massive scale for the first time in more than two decades.

While a 25 basis point hike is still the most likely scenario, the swap market now expects a rate hike of more than 25 basis points by the end of March. Given that no action is expected at this month's policy meeting, this suggests that traders are considering the possibility of a 50 basis point rate hike in March at least. Since May 2000, the Fed has never raised interest rates so much in one go.

The heating of speculation surrounding a sharper Fed rate hike in recent days may have exacerbated Tuesday's U.S. Treasury decline. JPMorgan Chase CEO Jamie Dimon warned last week that the Fed's tightening of policy might not be as "belligerent" as some had expected, and billionaire investor Bill Ackman said the Fed should raise interest rates by 50 basis points in March to rebuild credibility.

The CFTC's latest holdings data shows that hedge funds raised their net Eurodollar short positions to their highest level since December 2018, and speculators were also bearish on 10-year Treasury futures at their highest level since February 2020.

Bloomberg: Bank of America says earnings season starts weakest since the pandemic Salary pressure is the biggest risk to corporate earnings

Bank of America strategists say wage pressure is the biggest risk to U.S. corporate profitability. They reinforce their long-held warning that the explosive growth phase of profitability is coming to an end.

"Negative performance guidance and forecast cuts may be imminent," strategist Savita Subramanian and others wrote in a note sent to customers on Tuesday. They forecast that S&P 500 constituents will have a 3% higher net profit per share in the fourth quarter than expected, "but there are downside risks for the full year 2022." ”

Although the earnings season has only just begun, the market's reaction to the results announced by some of Wall Street's biggest names has been flat at best, not to mention that Sheng's stock prices fell sharply on Tuesday because trading revenue disappointed investors. After fears of rising interest rates and a deteriorating macroeconomic outlook triggered a sharp plunge in equities, stock bulls such as JPMorgan Chase expect performance to reinvigorate confidence in the stock market rally.

Bank of America strategists said the performance so far was the worst it had since the outbreak of the pandemic due to "increasingly pronounced labor shortages." As the pandemic has dampened travel and leisure spending, single-quarter results will also be negatively impacted by the surge in omicron cases.

However, Bank of America believes that as more and more companies publish results, the virus should not be the biggest concern for investors at this time. "As more earnings reports are released, we should hear more of the impact of omicron, but for the S&P 500, the derivative issues posed by omicron, such as supply chain challenges and ongoing labor shortages, pose greater risks than the direct impact of reduced service spending," the strategists wrote.

ZDNeT: Apple's mobile phones account for 22% of global smartphone shipments in 2021

According to the latest report released by data research institute Canalys, thanks to the success of the iPhone 13, Apple's mobile phones accounted for 22% of global smartphone shipments in 2021, ranking first in the global smartphone market, followed by Samsung with a 20% market share. In addition, Xiaomi ranked third with 12%, OPPO ranked fourth with 9%, and Vivo ranked in the top five with 8%.

The report shows that by the end of 2021, Apple's mobile phones account for 22% of global smartphone shipments. Canalys noted that the last time Apple ranked first in the smartphone market was in the fourth quarter of 2020.

Canalys analyst Sanyam Chaurasia said in a statement: "Apple's new iPhone flagship is very strong in the Chinese market. "Apple's supply chain began to recover, but due to shortages of key components, Apple was still forced to cut production in the fourth quarter and could not produce enough iPhones to meet demand."

Yahoo Finance: The biggest acquisition in gaming history! Microsoft spent $68.7 billion to acquire Activision Blizzard

Microsoft on Tuesday announced an all-cash acquisition of Activision Blizzard, a well-known U.S. game developer, for $68.7 billion, incentivizing the latter's pre-market stock price to soar 26 percent.

Microsoft announced on its official website on Tuesday that it will acquire Activision Blizzard for $95.00 per share, an all-cash transaction of $68.7 billion, the largest acquisition in Microsoft's history and the largest acquisition in the history of the game.

Microsoft said the acquisitions include benchmark franchises for Autovision, Blizzard and King Studios, including well-known games such as Warcraft and Diablo, as well as global esports campaigns launched by the MLG League ( Major League Baseball ) .

The acquisition will accelerate the growth of Microsoft's gaming business in the mobile, personal computer (PC), gaming and cloud sectors, and help build a metacosm.

Microsoft CEO Satya Nadella said games are the most dynamic and exciting project of all platform entertainment today and will play a key role in the development of metaversal platforms.

Wall Street Journal: AT&T and Verizon will temporarily restrict 5G signals near airports to avoid affecting flights

AT&T Inc. and Verizon Communications Inc. agreed tuesday to temporarily scale back its 5G wireless network expansion plans to address concerns from aviation safety regulators about the impact of its signals on aircraft equipment.

After the aviation industry made a last-minute request, the two companies announced new delays. The airline industry has warned that if the mobile service goes live on Wednesday as planned, restrictions aimed at preventing interference with critical aircraft equipment could force them to ground a large number of flights.

An AT&T spokesperson said in a statement: "In our own judgment, we have voluntarily agreed to temporarily postpone the opening of a limited number of towers around the runways of certain airports." We will roll out our advanced 5G services elsewhere as planned. ”

Verizon followed AT&T's move late Tuesday, pledging to voluntarily restrict its 5G network around the airport. The operator said the 5G service launched Wednesday will still reach more than 90 million Americans.

Bloomberg: Crude oil soars to a high since 2014 The Biden administration says it is continuing to work with oil-producing countries

As oil prices rise to a seven-year high, the White House says the Biden administration is working with oil-producing countries to ensure supplies are at levels sufficient to meet demand.

National Security Council spokeswoman Emily Horne said in a statement Tuesday that the White House plans to continue monitoring energy prices against the backdrop of global economic growth, holding consultations with OPEC+ countries if necessary.

"We will continue to work with oil-producing and consuming countries, these measures have had a real impact on prices, and we still have the tools to address energy prices," Horne said.

Rising gasoline prices have been the main factor in inflation soaring during Biden's presidency, and the White House has tried everything to reduce gasoline costs. Rising oil prices are hurting Biden's approval ratings, making it harder for Democrats to retain their majority in both houses in the November midterm elections.