Chapter 1: What are the implications of $650 billion in US tech spending?
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News when you want it with Bloomberg News Now. I'm Stephen Carroll.
And I'm Caroline Hepker.
$650 billion. That's how much four of the biggest US technology companies are planning to spend on capital expenditure this year. Bloomberg has calculated that the spending planned by Alphabet, Meta, Microsoft and Amazon would set a high watermark for capital spending by any single corporation in any one of the past 10 years.
Chapter 2: How is Amazon's capital expenditure affecting its stock performance?
Shares on Amazon dropped after the company yesterday announced its latest results and plans to spend $200 billion this year on data centres, chips and other equipment. CEO Andy Jassy said the money will predominantly go to the company's cloud unit and most of that spending would be for AI workloads. Speaking on the earnings call, he said it would be worth it.
When I look at this, what's happening, it's kind of unbelievable if you look at the demand of what you're seeing already with AI. But the lion's share of that demand is still yet to come in the middle of that barbell. And that will come over time.
Amazon shares fell 11% in after-hours trading after Andy Jassy spoke with the spending set to weigh on profits. Operating income at Amazon in the current quarter is now forecast to be below expectations at between $16.5 and $21.5 billion.
Well, the latest plans for more capital spending from US big tech came as the Nasdaq 100 extended its deepest slide since April. Software stocks extended their tumble after artificial intelligence startup Anthropic rolled out a new model that's designed to carry out financial research.
Chapter 3: What recent developments have occurred in the cryptocurrency market?
It's the second time this week that the company has jolted markets, underscoring the competitive threat from the new technology.
Bitcoin hit a fresh low this morning of just above $60,000 before recovering. At one point, the benchmark cryptocurrency was worth less than half its value at its October peak. Yesterday, Bitcoin fell by more than 13% in its largest single-day drop since Sam Bankman Freed's FTX collapsed in 2022. Cryptocurrencies have been on shaky ground ever since.
A brutal series of liquidations last year sapped market confidence. The selling has picked up steam this week as leveraged bets have been unwound and broader market turbulence has hit crypto.
In political news, UK Prime Minister Keir Starmer has apologised for appointing Peter Mandelson to a senior role despite his links to disgraced financier Jeffrey Epstein. Speaking during an event in England yesterday, the Prime Minister directly addressed Epstein's victims.
I am sorry.
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Chapter 4: What did UK Prime Minister Keir Starmer apologize for?
Sorry for what was done to you. Sorry that so many people with power failed you. Sorry for having believed Mandelson's lies and appointed him. And sorry that even now, you're forced to watch this story unfold in public once again.
Keir Starmer speaking there. His apology follows a concession on Wednesday that material used to vet Mandelson for the role of UK ambassador to the United States did contain details of his links to Epstein.
After the revelation, some Labour MPs helped force the government to agree to release sensitive documents about the appointment to the Cross-Party Intelligence and Security Committee for review. A YouGov poll released hours after Starmer's latest remarks showed 50% of the British public believe the Prime Minister should resign.
To some earnings news now. The French bank SociĆ©tĆ© GĆ©nĆ©rale has announced a new share buyback of almost ā¬1.5 billion after its fourth quarter profits beat estimates.
Chapter 5: How is the Bank of England responding to current economic conditions?
Net income came in at ā¬1.42 billion, ā¬200 million higher than expected. Sockgen's performance was helped by lower than expected cost and strength in its French retail bank. The lender's equity and fixed income traders had a weaker quarter, both missing estimates.
The Bank of England's governor says that a 50-50 bet on an interest rate cut next month is not a bad place to be. Andrew Bailey was speaking after the central bank's unexpectedly tight five to four vote to hold interest rates yesterday. Speaking to Bloomberg about the decision, Bailey said that he is still looking for a clearer picture of the economy.
We think inflation is now going to come down to target sooner than we thought it would, I think, this spring sometime. But the real question now is, is it going to be sustained there? Because that's our job. And that's all to do with underlying inflation.
Chapter 6: What are the latest updates on US-Iran nuclear talks?
And that's where I certainly think that we do need some more evidence base to mount that.
Bank of England Governor Andrew Bailey was once again the swing voter in choosing to hold interest rates at 3.75%, having voted to cut at the last meeting in December. Yesterday, four members of the Monetary Policy Committee voted to cut rates, which was more than the two that economists were expecting.
In Frankfurt, the European Central Bank voted to keep interest rates unchanged at 2%, as predicted by all economists in Bloomberg's survey. Following the decision, ECB President Christine Lagarde downplayed the recent rally in the euro, again describing inflation as being in a good place.
A stronger euro could bring inflation down beyond current expectations. More volatile and risk-averse financial markets could weigh on demand and thereby also lower inflation.
Speaking during a press conference, Lagarde also told reporters that Europe needs time to see AI-related productivity gains. Questioned on the impact of spending on artificial intelligence in the region, she observed that it's happening as part of a wider shift towards domestic momentum.
Iran's foreign minister has confirmed that nuclear talks with the United States are scheduled to be held in Oman today. Bloomberg's Ewan Potts has more.
Today's talks in Muscat mark the first public meeting between Iranian and US officials since Tehran's violent suppression of mass protests in the country last month. The summit comes as President Trump calls for another nuclear agreement, a new deal between the US and Russia. This after the new Strategic Arms Reduction Treaty, known as New START, signed in 2010, expired yesterday.
Trump says the existing treaty was a badly negotiated deal which was being, in his words, grossly violated. Russia has warned the expiry of New START means the two sides are now, quote, free to choose their next steps. In London, I'm Ewan Potts, Bloomberg Radio.
That's news when you want it with Bloomberg News Now. I'm Caroline Hepker.
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