U.S. stock markets reached new highs yesterday, with big tech driving the NASDAQ composite over 7,000 for the first time ever. You may have thought last year’s soaring FANG valuations (Facebook +53%, Amazon +56%, Netflix +55%, and Google +33%) meant they were headed for an inevitable fall in 2018. But Mr. Market disagrees.
Netflix saw the biggest rise yesterday—up 4.7%—fueled partly by an analyst report saying it was “far ahead of peers” in building subscription video services, and also by unsubstantiated rumors that it could be bought by Apple, which could use it’s stash of overseas earnings that have been liberated by the new tax bill. Chipmakers also had a big day, with Advanced Micro Devices up 6.8%, Micron Technology up 6.2%, and Nvidia up 3%.
The markets seem to believe the FANG companies will continue their march toward world domination. Amazon, in particular, seems unstoppable. The company said in a press release yesterday that it shipped over 5 billion items from its Prime membership service to subscribers in 2017. One analyst predicted Amazon would buy Target Corp. this year—following its purchase of Whole Foods last year.
Meanwhile, betting markets are saying Atlanta and Austin lead the odds of becoming Amazon’s new, second headquarters—an honor that could bring as many as 50,000 high paying jobs with it.
Separately, I noted yesterday that the putatively strong economy had an impressive number of black swans circling it. Ian Bremmer did a nice job highlighting the top ten foreign-policy-related risks in this post for TIME.
More news below.
U.S. blocks MoneyGram sale, signaling slowdown in China-U.S. deals.
Chinese electronic payments company Ant Financial, an affiliate of Jack Ma’s Alibaba Group, called off its plan to buy U.S. money transfer company MoneyGram for $1.2 billion after U.S. regulators moved to block the deal. It’s among the most high-profile Chinese deals to be squashed by U.S. officials in the Trump era, and it comes amid growing trade tensions between the two countries. Financial Times
Peter Thiel is betting big on Bitcoin.
The billionaire Silicon Valley investor’s Founders Fund venture capital firm reportedly bought anywhere from $15 million to $20 million worth of the cryptocurrency, and Bitcoin’s surge has pushed the value of that investment into the “hundreds of millions.” Of course, cryptocurrency’s volatile nature has many investors concerned about a Bitcoin bubble, though Thiel said last year that people are “underestimating” the cryptocurrency. The Wall Street Journal
Petrobras will pay nearly $3 billion to settle U.S. corruption class action.
Brazil’s state-controlled oil giant said on Wednesday that it agreed to shell out $2.95 billion to bring a close to a class action in the U.S. brought by investors who claim to have lost money in the wake of the company’s massive bribery scandal. Petrobras denies any wrongdoing as part of the settlement, which still must be approved by a U.S. federal judge. Reuters
Court asks for hearing on Valeant, Pershing Square insider trading settlement.
A U.S. District Court in California has “substantial questions” related to the $290 million that Valeant Pharmaceuticals International and Bill Ackman’s activist firm Pershing Square agreed to pay last week to settle an insider trading lawsuit brought by former Allergan investors. The federal court has asked Valeant and Pershing Square to appear for a hearing later this month to discuss whether or not the proposed settlement is “reasonable and fair.” Reuters
Around the Water Cooler
What do you need to know about MiFID?
Bloomberg has a handy guide to Europe’s big new financial regulations shift, with the new MiFID II rules set to take effect on Wednesday. The new law (it stands for Markets in Financial Instruments Directive) is massive in scope and is aimed at boosting market transparency and protecting investors. The MiFID era’s first day saw slumping trading volumes in European markets as traders adjust to the new regulations. Bloomberg
Apple has a new buddy.
Apple acquired Buddybuild, a Canadian startup that builds software development tools for coders. Buddybuild’s staff of about 40 employees will bolster Apple’s Xcode team, the group of engineers behind the tech giant’s suite of software development tools for third-party coders who build apps for Apple products. Fortune
Now, Bitcoin is boosting Hooters’ investor.
The latest company to jump on the blockchain craze is Chanticleer Holdings, an investor in Hooters Restaurants and other food chains. Chanticleer saw a stock bump of more than 40% on Tuesday after unveiling a cryptocurrency-based loyalty program where people can accrue a cryptocurrency called Merit by dining at any of Chanticleer’s restaurants. Fortune
Lawsuit looks to change Spotify’s tune.
A company that owns licenses for songs by Tom Petty and the Doors, among others, is suing streaming giant Spotify. Wixen Music Publishing is seeking $1.6 billion in damages after alleging in a lawsuit that Spotify streamed thousands of songs, including Petty’s “Free Fallin'” without obtaining the proper licenses and providing compensation to the music publisher. Reuters