Hello friends and Fortune readers.
The chill that spread across Wall Street the past two days is starting to thaw this morning. U.S. futures are up slightly after two days of triple-digit drops. European shares are lower, and Asian indexes closed mostly down.
In other news, McDonald’s (MCD) CEO Don Thompson is to step down after two years at the company, and will be replaced by Steve Easterbrook, its chief brand officer. As Fortune’s Phil Wahba notes, Thompson finally ran out of time to fix the restaurant chain’s deepening problems.
Later today the week’s big tech earnings parade continues with reports from Amazon (AMZN) and Google (GOOG), and earlier today Chinese e-commerce giant Alibaba (BABA) issued disappointing quarterly results. Late Wednesday, Facebook (FB) said sales jumped nearly 50% in its latest quarter, fueled by growing ad revenue.
Here’s what else you need to know about today.
1. Alibaba explains its ‘credibility crisis.’
Alibaba’s third-quarter earnings today are being overshadowed by a scathing report from Chinese authorities, accusing the e-commerce giant of failing to crack down on shady merchants, counterfeit goods, and misleading promotions on its online sites. A report of the investigation came out yesterday, causing the company’s shares to fall by more than 4% ahead of its earnings report. Chinese officials allegedly kept the report quiet until after Alibaba’s IPO to avoid spoiling its debut.
2. Thursday’s earnings deluge.
Already out this morning are Ford (F), Samsung, Shell, and Deutsche Bank’s (DB) quarterly reports. Samsung posted a 27% fall in fourth-quarter profit, mostly due to its faltering smartphone unit. Shell’s earnings were up despite oil prices that are down almost 25% versus a year earlier. Germany’s largest bank reported an unexpected profit, helped by a reprieve from legal fees. Ford said its fourth-quarter net income fell.
Reports to come: Tech giants Amazon (AMZN) and Google (GOOG) reveal their earnings after the market’s close.
3. Shake Shack aims for $95 million.
The restaurant chain founded in New York City is scheduled to price its initial public offering this evening, aiming to raise as much as $95 million after increasing the terms of its IPO. The offering is expected to price between $17 and $19 a share, up from an initial range of $14 to $16 a share. The chain, which will list under SHAK, has 63 locations around the world and plans to open 10 new stores a year “for the foreseeable future.”
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4. Russia may be facing more sanctions.
EU foreign ministers will gather in Brussels today to consider imposing further sanctions against Russia as fighting in east Ukraine worsens. The EU and U.S. have already implemented asset freezes and travel bans on Russian businesses and individuals. The move for more sanctions comes after pro-Russian rebels bombarded the port of Mariupol over the weekend, and NATO says hundreds of Russian tanks are spread across east Ukraine. Any new measures will have to be approved in the EU leaders meeting on Feb. 12, and leaders will likely coordinate with U.S. officials on any further financial sanctions, reported the BBC.
5. Biofuels won’t save the environment.
Biofuels, the result of turning plant matter into liquid fuel or electricity, are so inefficient that they won’t be able supply even a fraction of the world’s energy demand, according to a report by the World Resources Institute. The prominent environmental think tank said that biofuels will use up vast tracts of fertile land that could otherwise be utilized to feed growing populations. Billions have already been invested in biofuels, and while there could be some potential for wastes like sawdust, tree trimmings, and cornstalks, the potential is limited. “There are other, more effective routes to get to a low-carbon world,” Andrew Steer, president of WRI, told the New York Times.
