FirstFT: US stock markets endure worst January since financial crisis

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The US stock market suffered its worst start to the year since the global financial crisis.

The threat of higher interest rates, slowing corporate earnings growth and simmering geopolitical tensions drove the S&P 500’s biggest monthly decline since the start of the coronavirus pandemic and January the lower since the depths of the global financial crisis in 2009.

Tech stocks bore the brunt of the selloff. The tech-heavy Nasdaq Composite index fell 9%, its worst one-month drop since November 2008. It was a record set of results from Apple that halted the selloff, preventing the S&P 500 from recording its worst selling in January. checked in.

Looking further ahead, the FTSE All-World Index had its worst start to a year since 2016, when markets were rocked by worries about growth in China.

Investors are bracing for more volatility with rising tensions between the West and Russia in Ukraine, and the US Federal Reserve preparing to aggressively raise interest rates.

“It’s going to be that type of year,” said Wylie Tollette, head of client solutions at Franklin Templeton Investments. “We believe this is going to require a more agile approach to asset allocation.”

Are you preparing for further losses in the stock market or do you think we are past the worst of the falls? Do you think the stock market will make gains this year? Share your thoughts on firstft@ft.com. Thanks for reading FirstFT Americas — Gordon

1. Russia launches a blistering attack on the United States Russia accused the United States of “stirring up hysteria” over a possible invasion of Ukraine at the UN Security Council yesterday. Meanwhile, in Ukraine, police have arrested a group of suspects for allegedly planning mass riots in several cities, including the capital Kyiv.

  • Go further: As the United States and its allies in Europe brace for what it has said will be the most aggressive economic and financial sanctions package ever assembled to punish Russian President Vladimir Putin, we assess what that might mean.

2. The New York Times buys internet phenomenon Wordle Josh Wardle, a software engineer from Brooklyn who created Wordle as a gift to his girlfriend, sold the site to The Times for a price in the “low seven figures”. It’s the newspaper’s latest move to boost its products and reach its goal of 10 million digital subscribers by 2025.

3. The resignation triggers a new crisis in Argentina Máximo Kirchner, leader of the Peronist bloc in Argentina’s lower house of congress and son of powerful Vice President Cristina Fernández de Kirchner, resigned yesterday. He resigned in protest against the country’s framework agreement with the IMF to restructure $44.5 billion in debt. In Peru, Prime Minister Mirtha Vásquez resigned after less than four months in office.

4. FTX valued at $32 billion in new funding round Japan’s SoftBank and Canada’s Ontario Teachers’ Pension Plan were among the investors who participated in a new $400 million investment round for the group’s cryptocurrency exchange. in Bermuda, led by 29-year-old crypto billionaire Sam Bankman-Fried.

5. Boris Johnson rejects calls to quit Britain’s prime minister has refused to step down following the release of a much-awaited report into the so-called partygate affair at the heart of the UK government. His stumbling response to the report’s findings and revelations that the Metropolitan Police were investigating 12 separate alleged parties has reignited talk of a potential leadership challenge.

Boris Johnson speaking in the House of Commons yesterday. He said he was “sorry” and pledged to shake up his Downing Street office © AFP via Getty Images

Summary of coronavirus

  • The Covid Omicron sub-variant BA.2 is more contagious and better able to evade vaccine protection than the original, according to a Danish study.

  • The relation between Airlines companies and airports at nose dive while aviation losses are expected to reach hundreds of billions of dollars.

  • A senior hong kong resigned after attending a karaoke birthday party in violation of the city’s Covid guidelines. Wall Street banks have grown weary of the territory’s punitive quarantine rules, writes Tabby Kinder.

  • A part of China pandemic measures could extend beyond Omicron and the Winter Olympics. This is why Xi Jinping is stick to its zero Covid policy.

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The coming days

Alphabet Earnings Google’s parent company reports results for its latest quarter, launching a series of updates from several major tech companies this week. ExxonMobil and UPS report earnings before market open while General Motors and Starbucks report after Wall Street closes.

USA manufacturing update The sector is expected to have grown at a slower pace in January. The Institute for Supply Management’s Purchasing Managers’ Index is expected to have fallen to 57.5 last month, according to a Refinitiv analyst poll, from 58.7 in December. The Canadian economy is expected to have grown 0.3% in November from the previous month, according to a median analyst forecast.

Ukrainian diplomacy US Secretary of State Antony Blinken and Russian Foreign Minister Sergei Lavrov will speak by phone today as diplomatic efforts to ease the Ukraine crisis continue. Meanwhile, Hungarian Prime Minister Viktor Orban is traveling to Moscow for one-on-one talks with Russian President Vladimir Putin and Boris Johnson is in Kyiv to show his support for President Volodymyr Zelensky.

What else we read

Big Tech increases funding for US think tanks The world’s biggest tech companies are pumping money into US foreign policy think tanks, saying tougher competition rules will benefit China. Total donations to four of the most prestigious research groups rose from at least $625,000 in 2017-18 to $1.2 million in 2019-20, according to an analysis by the FT.

A montage of Google, Amazon, Facebook, Apple and Washington

Google, Amazon, Facebook and Apple are fighting Washington’s move towards tougher regulation using anti-China lobbying © FT montage/Getty

The international cult of Vladimir Putin If the Russian leader triumphs in Ukraine, his rogue style will gain new followers, argues Gideon Rachman in his latest column. “His fan club is global, spanning Asia, the Middle East, the Americas and Europe,” Gideon writes.

Who benefits from Japan’s panic over aging? There’s no optimistic discussion to be had about Japan’s population decline, but there’s also no way to avoid discussing it, and in particular how Japanese companies can operate with fewer humans. While outsourcing jobs overseas makes sense, companies may not be ready.

The Irish coalition under pressure Aside from the easing of the pandemic, Prime Minister Micheál Martin’s restless coalition government has little cause for optimism. The taoiseach has lost popularity after scandals and struggles to show progress on issues such as housing and health.

You don’t have to be a Stem genius to succeed in finance and tech Karina Robinson writes that she was the worst Spanish equity analyst in the City of London, so much so that in 1987 she was fired from Morgan Grenfell after 15 months. But you don’t have to be a math whiz, a computer scientist or a PhD in physics to be successful, she argues.

“Those who work behind the scenes and who can bridge the understanding gap between leaders in siled disciplines and roles . . . play a crucial role” — Karina Robinson, General Manager of Robinson Hambro

Fashion

Whether it’s outdoor swimming, running or kickboxing, the FT fashion team shares their tried-and-true sportswear picks for cold-weather training gear.

© Colin Meagher/Patagonia

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