Business

LONDON — Stock markets were mixed on Wednesday as investors juggled developments concerning US stimulus, while oil prices pushed higher into pre-pandemic range.

Equities had started the week strong, rebounding from losses last week as investors began to get cold feet about the narrative that the world economy will bounce back strongly this year thanks to vaccines as vaccination campaigns struggle and new COVID-19 variants emerge.

But the rally faded on Wednesday despite data showing that US private sector jobs rose last month and growth in the service sector accelerated in January.

Chris Beauchamp, chief market Analyst at online trading firm IG, called it a case of good news being bad news.

He said some consider the data "will strengthen the hands of the fiscal hawks on Capitol Hill and give them more firepower in their attempts to water down any Biden stimulus package".

In the US, the Senate on Tuesday took a tentative step towards approving a massive economic aid package proposed by President Joe Biden, although it remains unclear if he will be able to get his $1.9 trillion plan passed without concessions.

Oil prices pushed ever higher after hitting pre-pandemic levels on Tuesday thanks to data that showed a drop in US inventories.

"Crude's fundamentals continue to support higher prices," said analyst Edward Moya at currency trading platform Oanda.

He said that for oil prices to rise, stockpiles in the US and China need to continue to fall and that, so far, they have been. 

Moya expressed confidence that "the crude demand outlook will improve dramatically in the second quarter”. 

Recent data has showed infections and deaths in the United States — the worst-hit country — appear to be easing.

Experts said this was the result of more people wearing masks and social distancing, along with the end of the holiday season.

Vaccination programmes in the United States and Britain were picking up pace, although the European Union was struggling to get up to speed owing to supply problems.

The University of Oxford on Wednesday said the vaccine it produced with AstraZeneca significantly reduces virus transmission and is highly protective after a single dose.

British pharmaceutical group GlaxoSmithKline and German biotech firm CureVac meanwhile announced plans to jointly develop a coronavirus vaccine with the potential to counter multivariants of COVID-19.

Meanwhile, news that former European Central Bank chief Mario Draghi might become Italy's next prime minister gave stocks a fillip in Milan.

Draghi is credited with saving the eurozone in 2012 at the height of the debt crisis.

In Asian trading, the Hong Kong and Shanghai markets were hit as China's central bank sucked more cash out of financial markets to avert a bubble.

SAN FRANCISCO — Executives at Google parent company Alphabet will report quarterly earnings on Tuesday, seeking to highlight the internet titan's money-making success while mindful of regulators concerned about the firm's clout.

Google, which has long dominated the lucrative online advertising market, is the target of a trio of antitrust lawsuits in the US accusing it of abusing its position.

Regulators are concerned that the Silicon Valley giant's search engine, ad platform, mapping service, Android mobile operating system and other offerings give it unfair advantages.

Google has thrived during the pandemic as people rely on the Internet for work, school, shopping and socialising.

Worldwide, the firm is on track to take in $116.7 billion in digital ad revenue this year, an increase of 18.4 per cent from 2020, according to a forecast by industry tracker eMarketer.

Rivals shut out? 

A blockbuster lawsuit filed in October last year by the US government accuses Google of maintaining an "illegal monopoly" in online search and advertising.

The suit contends that Google shut out competitors and proposes that the court consider a range of remedies including a possible breakup, but it offered few specifics.

Google pays Apple from $8-12 billion each year to be the default search engine for the iPhone maker's Safari browser as well as Siri virtual assistant, according to the lawsuit.

"As a practical matter, users rarely switch the preset default general search engine," the lawsuit maintained, noting that Google then makes ad money off those users.

In December, dozens of US states filed a lawsuit against Google accusing the internet giant of abusing its Internet search dominance to eliminate competition.

The suit by antitrust enforcers from 38 US states and territories aligns with but goes beyond the case filed by the Justice Department.

The action differs from the federal litigation in that it accuses Google of unfairly putting "vertical" sites, such as those offering reviews or recommendations, at a disadvantage by tailoring search results to keep people on the internet giant's pages.

Amazon, Tripadvisor, Yelp and other internet firms involved in recommending products or services have complained that Google favors its own offerings in general search results.

Internet 'Goliath' 

In December, a group of states led by Texas filed a separate antitrust suit alleging anti-competitive practices, and asked to be consolidated with the federal case against Google.

"This Goliath of a company is using its power to manipulate the market," Texas Attorney General Ken Paxton said in a brief Twitter video announcing the suit.

He contended that Google rigged advertising auctions, taking advantage of its position serving up adverts as well as online search results.

"If the free market was a baseball game, Google positioned itself as the pitcher, the batter and the umpire," he said in the video.

Texas is also alleging that Google has an unlawful agreement with Facebook to avoid competing. 

Google on the defensive 

Google has rejected the accusations in the lawsuits and countered that it seeks to deliver the best results to online queries.

People are free to use other easily available search engines, the Silicon Valley company has noted.

Google pointed out that digital ad prices and ad tech fees have fallen, saying those are "hallmarks of a highly competitive industry”.

The firm's software not only crawls the internet and indexes what it finds, it also determines which results to provide for queries and what ads are displayed.

The California-based tech giant also handles auctions for ads competing to be displayed. 

The federal case, where all three suits may wind up consolidated, could take years to play out.

Legal experts point out that it may be difficult to show Google's conduct was illegal under the longstanding "consumer welfare" standard in monopoly cases because its services are largely free.

Google has called the Justice Department lawsuit "deeply flawed”.

NEW YORK — Exxon Mobil closed the books on a terrible 2020 on Tuesday, reporting losses in the fourth-quarter and for the full year in the wake of lower oil prices amid the COVID-19 crisis.

The big US oil company, which has been criticised over the last year for both its financial performance and its approach to renewable energy investment, suffered a 2020 loss of $22.4 billion, after posting a profit of $14.3 billion in 2019.

The global energy giant unveiled new cost-cutting efforts, a new low-carbon business unit and a new board member which the firm said would position it for the future.

"The past year presented the most challenging market conditions Exxon Mobil has ever experienced," said Chief Executive Darren Woods, adding that the company responded "decisively" in ways that will situate the company for the long term.

In the fourth quarter, Exxon Mobil suffered a loss of $20.1 billion following huge write-offs. Revenues fell 30.7 per cent to $46.5 billion.

The company unveiled plans for additional spending cuts of $3 billion in annual expenses expected by 2023, its latest belt-tightening move amid the industry-wide downturn.

While oil prices have partly recovered from historic lows during the worst of the pandemic shutdowns, US oil prices in the fourth quarter were in the low $40-a-barrel range, off from the mid-$50s in the year-ago period.

Petroleum demand has been choppy week to week and "things seem to be shifting quarter to quarter on the perceptions and nature of the recovery", said Peter McNally, analyst at Third Bridge Group.

Preserving the dividend 

But he said the Exxon Mobil's belt-tightening poses risks once the economy rebounds.

"If they don't spend the money, the volumes aren't going to grow," McNally said. "At least for 2021, spending is going to be down again."

Exxon Mobil again signaled the importance of its investor dividend, which it has preserved at comparatively high levels even as it tightened spending.

Planning for 2022 to 2025 is built around oil prices between $45 and $50 per barrel, but if prices slip below this level, "the company has the ability to further reduce capital investments, cover the dividend and maintain a strong balance sheet," Exxon Mobil said.

Amid criticism it has not invested in renewable energy, Exxon Mobil said its low carbon solutions business would focus on carbon capture and storage technology as a means to counter the emissions that cause global warming. 

The company said it met environmental targets to reduce methane emissions and flaring throughout its operations. 

The oil giant also nominated to its board former chief executive of Malaysian national oil company Petronas, Tan Sri Wan Zulkiflee Wan Ariffin.

Shares rose 1.8 per cent to $45.71in morning trading.

LONDON — Global stock markets bounced higher on Monday following last week's blood-letting as bargain-buyers moved in, while silver prices soared to an eight-year peak after it became a new target of chatroom-driven retail buying, dealers said.

In Europe, London stocks charged 1.1 per cent higher in afternoon trading while Paris and Frankfurt each jumped 1.4 per cent.

"European stock markets were broadly higher... as investors try to arrest a decline over the last fortnight," said Markets.com analyst Neil Wilson.

Dealers remain on edge as surging infections and a stuttering vaccination rollout offset long-term hopes for the economic recovery.

Worries about online retail investors' attack on Wall Street short traders was still causing angst on trading floors, with fears they are being forced to sell some equities to cover their backs.

'Herding into silver' 

Silver, the latest target, zoomed to an eight-year peak at $30.10 per ounce in early Monday morning deals, before paring gains.

The precious metal has now soared by more than 16 per cent since Thursday.

"Silver prices jumped... as investor interest turned on the metal due to expectations Reddit traders will attempt to squeeze prices higher," added Wilson.

"Retail traders are herding into silver in the same way they have driven the likes of GameStop over the last week."

Patrick J. O'Hare at Briefing.com called the jump in silver prices "the latest sign of the times".

"We're talking silver futures, people — or perhaps they would be referred to better today as silly futures," he added.

Traders have also been rattled by the soaring price of companies chosen by amateur investors who have organised over Reddit and other online forums.

Their huge buying spree of firms led by video-game store GameStop and cinema chain AMC has hammered short-selling hedge funds who had bet their price would fall.

Global markets were a sea of red last week due to a combination of issues including rising virus cases, problems with countries' immunisation programmes and worries about high valuations following a months-long rally.

New York's three main indexes all ended on Friday with steep losses and there was talk that equities will see a correction.

Still, the new week started on a positive note in Asia, with Hong Kong and Seoul up more than 2 per cent, while Tokyo jumped more than 1 per cent and Shanghai won 0.6 per cent.

Data out of China at the weekend showed that growth in economic activity appeared to have slowed in January as officials imposed fresh containment measures to counter new virus clusters in parts of the country.

The positive tone on Asian markets carried over to European trading and then into north America, where Wall Street's main indices opened higher with the Dow climbing 0.9 per cent.

The spotlight was also still on Washington with lawmakers urged to approve new stimulus for the struggling US economy.

There is a feeling that Joe Biden's $1.9 trillion plan will be whittled down as Republicans look to lower the cost, while a group of 10 senators from the party have proposed an alternative package they say could win the bipartisan support Biden has said he wants.

RIYADH — Saudi Arabia’s Crown Prince Mohammed Bin Salman said the kingdom will sell more shares of energy giant Aramco in the coming years, following the world's biggest public listing in 2019.

"There will be Aramco share offerings in the coming years, and this cash will be transferred to... the Public Investment Fund (PIF) to be re-injected inside and outside the kingdom," Prince Mohammed told Riyadh's Future Investment Initiative (FII) conference in a virtual session on Thursday.

The prince did not specify a timeframe or what portion of the company's shares will be sold in future offerings.

Aramco was listed on the Saudi bourse in December 2019 following the world's biggest initial public offering, generating $29.4 billion for 1.7 per cent of its shares.

Analysts say sales of additional shares could struggle to generate investor interest amid a downbeat energy market as the coronavirus pandemic saps global energy demand.

"International investor interest in fossil fuel assets is diminishing with each passing day," a Gulf-based international banker said.

Another share offering would be a "tough sell in the current economic climate", the banker added.

Late last year, Aramco posted a 44.6 per cent slump in third-quarter profit, as the pandemic weighed on the global demand for crude oil.

Aramco, seen as Saudi Arabia's cash cow, has revealed consecutive falls in quarterly profits since it began disclosing earnings in 2019, piling pressure on government finances as the kingdom pursues ambitious multi-billion dollar projects to diversify its oil-reliant economy.

Prince Mohammed said future share offerings would be a key way to boost the PIF, the kingdom's sovereign wealth fund which is the main engine of its diversification efforts.

The PIF intends to boost its assets to 4 trillion riyals ($1.07 trillion) and directly or indirectly create 1.8 million jobs by 2025, the crown prince said in a speech aired by state television last Sunday.

The PIF will invest $40 billion annually in the domestic economy over the next five years, he added, as the kingdom battles high unemployment and a coronavirus-triggered slump.

Saudi Arabia, the world's biggest crude exporter, has been hit hard by the double whammy of low prices and sharp cuts in production. 

A drop in oil income is expected to hinder Prince Mohammed's ambitious "Vision 2030" reform programme to overhaul the economy.

SAN FRANCISCO — Facebook on Friday said it is working on a way to let advertisers avoid having marketing messages appear in feeds alongside content they'd rather not be associated with.

A small group of advertisers will soon start testing new "topic exclusion controls" being honed by the leading social network, according to a post.

"These controls will help to address concerns advertisers have of their ads appearing in News Feed next to certain topics based on their brand suitability preferences," Facebook said.

The company gave the example of a children's toy company being given the option of not having its ads appear along with content that falls into a "crime and tragedy" category.

The move comes with the massive social network facing pressure from advertisers seeking to avoid toxic content and abusive content on the platform.

"This product development as well as testing and learning in News Feed will take much of the year," Facebook said.

"These are new controls, and it's important we build them with safeguards to protect people's privacy as we continue to move forward."

Facebook makes most of its money from advertising, and has been grappling with curbing the spread of hate and misinformation at the social network.