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News

Amazon could layoff 10K employees

 

Wednesday, November 16, 2022

The news shaping the markets today

Poland said a Russian-made missile killed two people after hitting the eastern village of Przewodow near Ukraine’s border. The US dollar index traded slightly higher on the news.


China’s average new home prices declined by 1.6% year-over-year in October, following a 1.5% downturn in the previous month. This being the sixth consecutive month of decline in new home prices exerted pressure on the CNY/USD forex pair.


Japan’s core machinery orders fell 4.6% in September, missing the consensus estimates of 0.7% growth. The news sent the JPY/USD pair lower in forex trading this morning.


Argentina’s monthly inflation rate rose to 6.3% in October, from 6.2% a month ago, exerting pressure on the ARS/USD forex pair.


Colombia’s economy grew by 7.0% year-over-year during the third quarter, versus a 12.8% expansion in the prior period. However, the COP/USD pair declined in forex trading this morning.

 

What’s happening: Amazon is reportedly looking to downsize, laying off around 10,000 people.

What happened: The ecommerce giant plans to bid farewell to thousands of workers in corporate and technology jobs beginning as early as this week, according to the New York Times.

Meanwhile, Amazon made an important announcement regarding the launch of a virtual platform in a bid to expand its presence in healthcare.

Why it matters: The global economy has been under pressure this year due to soaring inflation, worsened by the Russia-Ukraine conflict.

Central banks around the world were forced to hike interest rates to contain inflation. Against this backdrop, several companies have become more cautious, taking various steps to lower expenses, including job cuts.

Elon Musk recently shaved 3,700 jobs in Twitter, representing around half the overall workforce, after taking the company private. Meta Platforms has also announced plans to lay off 11,000 employees, representing around 13% of its overall staff. Other major companies, including Lyft, Salesforce and Snap, have also laid off employees.

Amazon’s planned jobs cuts would be the biggest in the company’s history. However, the overall number, projected at 10,000, represents only around 3% of Amazon’s corporate employees and less than 1% of its global workforce.

Meanwhile, management announced the launch of Amazon Clinic, a virtual platform for users to connect with healthcare providers to treat common ailments like skin conditions and allergies. The company has been looking to expand its footprint in the healthcare market and had acquired online pharmacy PillPack in 2018.

How shares responded: Amazon’s shares gained 0.5% to close at $98.94 on Tuesday but fell by 0.9% in after-hours trading. The stock has lost around 13% over the past month.

What to watch: Investors will keep an eye on any official announcement by the company regarding the layoffs.

The markets today

UK stocks will be in focus today ahead of a basket of economic reports

Context: British stocks edged lower on Tuesday as investors assessed recent economic reports.

Details: The GBP/USD forex pair climbed to a three-month high on Tuesday after the US reported a lower-than-expected increase in its producer inflation for October. The news weighed on export-oriented firms like Diageo and British American Tobacco. The GBP/USD settled higher at $1.1866 on Tuesday.

Data released on Tuesday showed the UK’s unemployment rate surprisingly increasing during the three months through September. The number of people in work fell by 52,000 in the three-month period, while average weekly earnings including bonuses rose by 6% year-over-year to £621.

Investors were also cautious before Finance Minister Jeremy Hunt announces the fiscal plan on Thursday. Markets widely expect Hunt to raise taxes and reduce spending to fix public finances.

Shares of Vodafone fell on Tuesday after the company cut its full year forecast, citing higher energy costs and inflation, hurting overall investor sentiment.

London’s FTSE 100 index eased from a two-month high to settle lower by 0.21% at 7,369.44 on Tuesday, following a selloff in technology shares. The domestically focussed FTSE 250 index lost 0.85% to close at 19,455.88.

What are expectations: Traders await data on inflation rate, producer price inflation and labour productivity from the UK today. The annual inflation rate in the UK, which rose to 10.1% in September, is expected to accelerate to 11% in October. Factory gate prices of goods produced by the country’s manufacturers, which rose 15.9% year-over-year in September, is projected to increase 14.9% in October. Analysts expect labour productivity to rise 0.2% in the third quarter, following 0.3% growth in the three months to June 2022.

Other Markets: US indices closed higher on Tuesday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.17%, 0.87% and 1.45%, respectively.

Support & resistances for today

Technical Levels News Sentiment
EUR/USD  – 1.0371 and 1.0383 Positive
USD/JPY – 139.76 and 139.98 Positive
USD/CAD – 1.3272 and 1.3286 Negative
Nasdaq 100  – 11843.29 and 11898.07 Negative
Nikkei 225 – 27946.50 and 27987.50 Positive

Market snapshot

Futures at 0400 (GMT)
EUR/USD (1.0371, 0.20%) Dow ($33,574, -0.09%) Brent ($93.56, -0.3%)
GBP/USD (1.1868, 0.02%) S&P500 ($3,995, -0.11%) WTI ($86.58, -0.4%)
USD/JPY (139.93, 0.45%) Nasdaq ($11,890, -0.12%) Gold ($1,780, 0.2%)

What else to watch today

UK’s retail price index and input producer prices, South Africa’s retail sales, US MBA mortgage applications, retail trade, export prices, import prices, industrial production, manufacturing production, capacity utilization, business inventories, NAHB housing market index, gasoline stocks, crude oil inventories and distillate stockpiles, Canada’s housing starts and inflation rate, as well as Russia’s gross domestic product.


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