China’s Internet Truce, Brazil Turmoil, Goldman Job Cuts Are Moving Markets Monday By

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By Geoffrey Smith — China has effectively ended its crackdown on big internet companies, a senior official has said, a day after the founder of Ali Baba (NYSE:) control of financial services giant Ant Group. In Brazil, police restored order after a crowd supporting ousted President Jair Bolsonaro stormed Congress and government buildings on Sunday. More than 300 arrests have been made and incoming President Lula da Silva has promised to punish the perpetrators. Stocks are expected to open higher, following Friday’s gains after a “Goldilocks” jobs report, but video game publishers are under pressure after a major profit warning in the sector. And crude oil is soaring, with China signaling that it is preparing for a strong recovery in consumption this year. Here’s what you need to know in the financial markets this Monday, January 9.

1. China’s crackdown on internet giants is over

A senior Chinese official said a two-year crackdown on internet companies has ended, pushing tech stocks higher.

Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, told state media that authorities had effectively ended their campaign against the country’s big platform companies, after months of regulatory actions that have severely damaged the fortunes of China’s biggest Internet entrepreneurs.

The announcement came a day after financial services giant Ant Group announced that Jack Ma had ceded control of the company, an apparent quid pro quo for obtaining permission to raise capital.

As a result, Alibaba’s ADRs increased by 5% in pre-market trading.

2. Lula back in power after Bolsonaro supporters storm government buildings

Brazilian police said they had fully restored control of government and congressional buildings after they were stormed by supporters of ousted right-wing President Jair Bolsonaro on Sunday.

Bolsonaro criticized the perpetrators and denied any involvement in the riot, which echoes the Jan. 6 riot in the U.S. Capitol that followed President Donald Trump’s election defeat. Incoming president Ignacio “Lula” da Silva has vowed to punish those responsible and said he will “follow the money” in an investigation into the sponsors. More than 300 people were arrested.

Brazil’s Supreme Court, meanwhile, suspended the governor of the capital Brasilia for 90 days, due to his failure to avert the riot.

3. US stocks should open higher; Wall Street job cuts scrutinized

U.S. stock markets are set to open higher, building on gains made on Friday after the release of the December jobs report sparked speculation about when the Federal Reserve will switch from raising to lower interest rates. interest.

The report had shown that jobs and wage growth were slowing to a more sustainable level, with no signs of an impending recession, which boosted hopes that the Fed could still achieve its goal of a “rock landing”. softness” of the economy.

By 1:30 p.m., were up 85 points, or 0.3%, while and were up a similar amount. Among the stocks likely to receive particular attention is Deere (NYSE:), which could come under pressure after agreeing to let farmers repair their own Deere machines. The deal signed over the weekend with farmers’ representatives threatens a lucrative stream of after-sales services for the company.

Attention will also be on Goldman Sachs (NYSE:), which Bloomberg says is preparing its biggest round of job cuts since 2009, after over-hiring during the pandemic.

Cannabis company Tilray (NASDAQ:) is due to release its results.

4. Video game publishers in the limelight after major profit warning in Europe

Video game publishers will also be in the spotlight on Monday, after UK-listed Frontier Developments (LON:) reported a sharp downturn in sales of its flagship Formula 1 racing game.

Frontier said demand for its F1 Manager 2022 game was “materially below” expectations in 2022, while sales of other titles like Planet Coaster and Jurassic World Evolution also missed estimates. He indicated that revenues could fall in 2023.

Although not a big name in the global industry, Frontier’s F1 Manager 2022 game is a benchmark in this particular niche of gaming, giving the results cross-reading potential with other names. like Electronic Arts (NASDAQ:) and Ubisoft (EPA:). The latter fell 3.5% in morning trading in Paris.

5. Oil jumps on signs of Chinese demand rebound

Crude oil prices jumped after China announced a big increase in import quotas for the coming year, suggesting it is bracing for a strong rebound in demand as it reopens its economy. Reuters sources indicated a 20% increase over 2022 import levels.

By 1:30 p.m., futures on the were up 3.3% at $76.17 a barrel, while the were up 3.0% at $80.89 a barrel.

The impact of changing China’s public health policies will be visible over the next week as Chinese travelers prepare to travel without restrictions during the Lunar New Year holiday for the first time since 2020.

A brief threat to the spot market quickly evaporated after a ship that ran aground in the Suez Canal (EPA:) was freed by tugs, allowing traffic in the vital waterway to quickly resume.

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China’s Internet Truce, Brazil Turmoil, Goldman Job Cuts Are Moving Markets Monday By

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