China Internet ceasefire, Brazil unrest, Goldman job cuts

© Reuters

By Geoffrey Smith — China has effectively halted its campaign to squeeze big internet companies, a senior official said a day later Alibaba (NYSE:) founder Jack Ma has relinquished control of financial services giant Ant Group. Police restored order in Brazil after mobs supporting ousted President Jair Bolsonaro stormed Congress and government buildings on Sunday. More than 300 were arrested and future president Lula da Silva promised to punish the perpetrators. Stocks are poised to open higher on Friday after a ‘Goldilocks’ jobs report, but video game publishers are under pressure after big profit warnings across the sector. Crude oil is rising as China says it is preparing for a big increase in consumption this year. Here’s what you need to know in the financial markets on Monday, January 9.

1. China’s crackdown on internet giants is over

A top Chinese official announced the end of a two-year ban on internet companies, sparking a rally in tech stocks.

China’s Banking and Insurance Regulatory Commission chairman Guo Shuqing told state media that authorities have effectively ended their crackdown on the country’s big platform companies after months of regulatory crackdowns that have hit the fortunes of China’s biggest internet entrepreneurs.

The announcement came a day after financial services giant Ant Group announced that Jack Ma had relinquished control of the company, an apparent quid pro quo to get approval for a capital raise.

As a result, Alibaba ADRs rose 5% in premarket trading.

2. Lula is back in charge after Bolsonaro supporters storm government buildings

Brazilian police said Sunday they had fully regained control of government and congressional buildings after they were stormed by supporters of ousted right-wing President Jair Bolsonaro.

Bolsonaro criticized the perpetrators and denied involvement in the January 6 riot.c Following the defeat of President Donald Trump in the elections, there was a riot in the US Congress building. Incoming president Ignacio ‘Lula’ da Silva has vowed to punish the culprits and said he will “go after the money” as he investigates who was behind it. More than 300 people were arrested.

The Supreme Court of Brazil suspended the governor of the capital of Brazil for 90 days for failing to prevent riots.

3. Stocks will open higher; Job cuts are evident on Wall Street

US stock markets are poised to open higher, paring gains on Friday after a December jobs report fueled speculation about when the Federal Reserve will turn from raising interest rates to cutting them.

The report showed job growth and wages slowing to more sustainable levels without giving signs of an imminent recession, bolstering hopes that the Fed could still achieve its “soft landing” goal for the economy.

By 06:30 ET (11:30 GMT), it was up 85 points, or 0.3%, and up by a similar amount. Stocks that could come into focus next include Deere ( NYSE 🙂 ), which could come under pressure after allowing farmers to repair their own Deere machines. The agreement signed with farmers’ representatives over the weekend threatens the company’s lucrative after-sales service stream.

Also in the spotlight will be Goldman Sachs (NYSE: ), which Bloomberg reported is preparing for its biggest job cuts since 2009 after over-hiring during the pandemic.

Cannabis company Tilray (NASDAQ:)) is due to report earnings.

4. After a big profit announcement in Europe, video game publishers are in the spotlight

Another area in the spotlight on Monday will be video game publishers, after UK-listed Frontier Developments ( LON :)) reported a big slowdown in sales of its flagship Formula 1 racing game.

Frontier said demand for F1 Manager 2022 fell “significantly below” expectations in 2022, while sales of other games such as Planet Coaster and Jurassic World Evolution also missed estimates. His stated income may decrease in 2023.

While not a big name in the global sector, Frontier’s F1 Manager 2022 is the benchmark for this particular gaming niche, with results from Electronic Arts (NASDAQ:) and Ubisoft (EPA:). The latter fell 3.5% in morning trade in Paris.

5. Oil rises on signs of recovery in Chinese demand

Crude oil prices rose after China announced a big increase in import quotas for next year, indicating that demand is poised for a major revival as it reopens its economy. Reuters sources indicated a 20% increase from 2022 import levels.

At 6:45 a.m. ET, futures were up 3.3% at $76.17 a barrel, up 3.0% at $80.89 a barrel.

The impact of the change in China’s public health policy will be evident next week as Chinese travelers prepare to travel without restrictions during the Lunar New Year holiday for the first time since 2020.

Elsewhere, a brief threat to the spot market quickly evaporated after a ship that ran aground in the Suez Canal was freed by tugboats, allowing traffic on the vital waterway to quickly resume.

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