Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the markets today:
Main Trading Events Of The Day: U.S. Core CPI m/m & Unemployment Claims @ 13.30 GMT
Earnings Reports: Groupon Inc. Earnings per share forecast: 2 cents. Release: Close of U.S. markets today. Wal-Mart Stores Inc. Earnings per share forecast: $1.65. Release: Before U.S. markets open today.
WHAT WE’RE WATCHING TODAY
Fed To Change Rate Guidance As Unemployment Falls
Federal Reserve policy makers backed away from their year-old commitment to consider raising interest rates when unemployment falls below 6.5 percent. With joblessness falling faster than expected even as other labour-market indicators show weakness, policy makers agreed it would soon be appropriate to revise their guidance about how long the era of record-low interest rates will remain, according to minutes of their January meeting. Several policy makers also said that in the absence of an appreciable change in the economic outlook, there should be a clear presumption in favour of continuing to trim the Fed’s bond purchases by $10 billion at each meeting. U.S. stocks closed lower on Wednesday after the minutes from the Federal Reserve’s policy setting meeting revealed little consensus about when short-term rates would begin to rise. A larger-than-expected drop in home construction in January also weighed on sentiment.
Facebook to Buy Messaging App WhatsApp for $19 Billion
Facebook Inc, the world’s largest social network has agreed to purchase mobile-messaging startup WhatsApp Inc. for up to $19 billion in cash and stock, making it the biggest Internet acquisition in more than a decade. WhatsApp has more than 450 million members, with 1 million users being added daily. WhatsApp, which would be the company’s biggest acquisition, competes with apps from Twitter Inc., Kik Interactive Inc. and Snapchat Inc., the photo-message startup that rebuffed a $3 billion Facebook bid last year. WhatsApp is also believed to have many users in emerging markets such as China and India.
Industry insiders were said to have been staggered by news of the acquisition of WhatsApp, seeing it as a sign of sheer “desperation” and arguing that the social networking giant has overpaid for the mobile-messaging start-up. They believe that Facebook is so worried that they are bleeding users that they are trying to get their user count up by buying companies that have users which is reminiscent of some of the strategies of the dotcom era.
Facebook investors were also initially unhappy with the astounding valuation the social media giant is paying for the California-based company, which basically values each WhatsApp user at about $42 a customer. After first tumbling more than 5%, Facebook’s shares recovered slightly and were off about 3% in after-hours trading.
Facebook’s purchase of WhatsApp is the company’s largest acquisition yet, dwarfing the $1 billion it paid for Instagram and highlighting its ambition to get a piece of the fast-growing mobile messaging market.
Gold Weakens As Dollar Recovers After Fed Minutes
Gold slipped on Thursday as the dollar firmed after minutes from a U.S. Federal Reserve policy meeting indicated support for continued tapering of its stimulus. The tapering, which highlights a recovery in the U.S. economy, will diminish gold’s investment appeal as a hedge against inflation. The metal sank to a six-month low on Dec. 31 on prospects for a global economic recovery. Gold hit reached $1,314.50 before slipping to $1,309.85, down $1.40. It crossed the psychological level of $1,300 this month, but gains have been capped at a 3-1/2 month high of $1,332.10 hit on Tuesday. According to analysts, this should correct a little because the rise has been too sharp.
That sums up Thursday’s highlights! Keep in touch with us via your favourite social media channels for up-to-the-minute news and information to help you with your trading. We hope you have a profitable day on the markets.
