Meta and Google Are Cutting Staff
Topic of the day
In response to stalling growth and intense competition, Meta Platforms Inc. executives have spoken of cost cuts, hiring freezes and “ruthless prioritization.” One word the company hasn’t used: layoffs. But Meta has begun quietly nudging out a significant number of staffers by reorganizing departments and giving affected employees a limited window to apply for other roles within the company, according to current and former managers familiar with the matter, in a move that achieves staffing cuts while forestalling the mass issuance of pink slips. The reductions are expected to be a prelude to deeper cuts, with Meta looking to trim its costs by at least 10% within the next few months, according to people informed of the company’s plans. While some savings will come from cuts to overhead and consulting budgets, the people said, much of it is expected to come from reduced employment. In response to questions, Meta spokesman Tracy Clayton referred to Chief Executive Mark Zuckerberg’s July statement that the company would need to reallocate resources toward corporate priorities as pressures mount on the business.
Looking for New Structured Product Ideas?
The Switzerland stock market ended on a weak note on Wednesday, in contrast to the trend seen in most of the markets across Europe. The mood was cautious with investors awaiting the Federal Reserve's interest rate decision, due later in the day, and the Swiss National Bank's policy announcement, due on Thursday. The benchmark SMI, which stayed weak right through the day's session, ended with a loss of 47.14 points or 0.45% at 10,429.40, about 50 points off the day's low of 10,380.48. Richemont drifted down 1.6%. Novartis, Sonova and Swiss Re ended lower by 1.2 to 1.4%. Roche Holding, Partners Group and Swiss Life Holding lost 0.8 to 1%. Zurich Insurance Group ended 0.52% down. Geberit climbed nearly 2%. Sika gained 1.67% and Givaudan advanced 1.2%. ABB and Credit Suisse posted modest gains. Among the stocks in the Mid Price Index, Dufry ended 2% down. Roche Holding ended lower by 1.36%. Bachem Holding rallied nearly 5%. Zur Rose, Tecan Group, Belimo Holding, VAT Group, Straumann Holding and AMS gained 1.4 to 2.3%.
Despite concerns about economic slowdown, rising interest rates and geopolitical tensions, European stocks moved higher on Wednesday. The pan European Stoxx 600 climbed 0.9%. The U.K.'s FTSE 100 surged 0.63%, Germany's DAX gained 0.76% and France's CAC 40 advanced 0.87%, while Switzerland's SMI drifted down 0.52%. Among other markets in Europe, Belgium, Denmark, Finland, Ireland, Netherlands, Norway, Poland, Portugal and Sweden ended higher. Czech Republic, Greece, Iceland, Russia and Turkiye closed weak, while Austria and Spain settled flat. In the UK market, Hargreaves Lansdown rallied 5.7%. Persimmon, BAE Systems, Schrodders, Taylor Wimpey, 3I Group, Halma, Barratt Developments and Ashtead Group gained 3 to 5%. Airtel Africa, Spirax-Sarco Engineering, RightMove, Harbour Energy, Experian, Croda International and Vodafone Group also moved up sharply. Ocado Group drifted down more than 5%. IHG and IAG both shed about 3.3%. Whitbread, Rolls-Royce Holdings, Natwest Group, Flutter Entertainment, Barclays, HSBC Holdings, BT Group and Lloyds Banking Group declined 1 to 2.3%. In the German market, Infineon Technologies, Puma and Symrise gained 2.5 to 2.7%. MTU Aero Engines, E.ON, Linde, Siemens, Sartorius, SAP, RWE and Munich RE advanced 1.2 to 2%. HelloFresh dropped 3%. Fresenius, Deutsche Post, Deutsche Bank and Continental also ended notably lower. In Paris, Thales rallied 4%. WorldLine, STMicroElectronics, Veolia, Teleperformance, Air Liquide, Dassault Systemes, Legrand, Hermes International, Schneider Electric, Engie, Airbus Group and LVMH gained 1.5 to 3.6%.
U.S. stocks finished sharply lower after the Federal Reserve said it would raise interest rates again and signaled the need for further rate increases in the months ahead. Trading was volatile Wednesday. Stocks were up throughout the morning, then dropped shortly after the Fed's announcement. They then jumped back into the green within the hour, only to tumble in the final hour of trading. The broad S&P 500 index fell 66.00 points, or 1.7%, to 3789.93. The blue-chip Dow Jones Industrial Average shed 522.45 points, or 1.7%, to 30183.78 and the technology-heavy Nasdaq Composite fell 204.86 points, or 1.8%, to 11220.19. The Fed's decision to raise the federal-funds rate by 0.75 percentage point will bring the central bank's benchmark rate to a range of 3% to 3.25%, its highest level since 2008. Based on the Fed's so-called dot plot, or projection of where interest rates may be in the coming years, investors now expect the central bank to ultimately raise rates above 4% in order to tame inflation. Still, Mr. Powell's comments suggested the central bank doesn't see itself winding down its rate increases anytime soon. With the Fed chair acknowledging economic growth was likely to slow and the labor market was likely to soften as rates continue to rise, investors and analysts were left with a somewhat dim outlook for the near future. In the meantime, stock moves to the upside will complicate the Fed's job of reining in inflation, one investor said. General Mills Inc. posted higher sales in its fiscal first-quarter as more consumers eat at home in response to higher prices, including from the food company, as costs escalate further. The maker of Cheerios cereal and Betty Crocker cake mix Wednesday said it now sees costs rising as much as 15% for its current fiscal year, higher than its forecast from June, due to increases for raw materials, labor, freight and fuel.
After the volatile reaction of Wall Street to the interest rate hike and, in particular, the interest rate forecasts of the US Federal Reserve, the East Asian stock exchanges also fall the following day. In Tokyo, the index fell by 0.7 per cent to 27,129 points. Here, the decline narrowed slightly in the course of the day after the Japanese central bank confirmed its ultra-expansive course unchanged. In Hong Kong, the HSI slumped by 1.9 per cent to a six-month low, while in Seoul it fell by 0.8 per cent. Shanghai again does slightly better with a small drop of 0.3 per cent. There is no trading in Sydney because of a memorial day for the death of the Queen.
Bonds ended mixed following the Fed's rate decision. The yield on the benchmark 10-year Treasury note, which initially spiked, wound up settling lower at 3.511% from 3.571% Tuesday. The yield on the two-year Treasury note, which tends to move with traders' expectations for monetary policy, rose to 3.993% from 3.962%, marking a fresh multiyear high. Bond yields and prices move in opposite directions.
GS raises Scout24 to 67.90 (67.30) EUR/Buy – Trader
HSBC lowers the Tui target to EUR 1.75 (1.80) / Hold – Trader
Citi lowers Flutter to Neutral (Buy) – GBP 115 (152)
Produced by MBI Martin Brückner Infosource GmbH & Co. KG on behalf of Swissquote. All news is acquired with journalistic accuracy. No liability is assumed for delays or errors.