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Asia sits out equities rally as Alibaba slides

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November 19, 2021

By Alun John

HONG KONG (Reuters) – Asian shares sat out a global rally on Friday as disappointing earnings from Chinese e-commerce giant Alibaba reinforced worry about slowing growth in the world’s second-largest economy, even as European and U.S. share futures indicated gains.

Elsewhere, Turkey’s lira could not break far from Thursday’s record low when it weakened about 6% after the central bank, under pressure from President Tayyip Erdogan, cut rates again even as inflationary risks broadened.

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MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.44% and was set for a weekly decline of 1%, even after a solid performance overnight on Wall Street boosted by upbeat corporate earnings.

That global rally seemed set to continue with Euro Stoxx 50 futures gaining 0.41%, FTSE futures advancing 0.42% and S&P 500 e-minis up 0.36%.

The tone was more subdued in Asia, with the Hong Kong benchmark down sharply 1.5%, dragged down by index heavyweight Alibaba.

The Chinese e-commerce firm’s shares tumbled more than 10% after its second-quarter results missed expectations due to slowing consumption, increasing competition and a regulatory crackdown.

Kenny Ng, a strategist at brokerage Everbright Sun Hung Kai Securities, said as well as Alibaba, recent poor results at Baidu, which was off 3%, and Bilibili, whose shares are suspended, had reinforced the downward trend.

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Given the sharp slowdown in recent Chinese retail data more broadly, analysts at Citi said in a note Alibaba’s results were not surprising.

Chinese economic data over recent months has also underlined a loss of growth momentum, dragging down stocks across the region.

MSCI’s Asian regional benchmark is down 13% from its February high, while MSCI’s gauge of stocks across the globe sits at a record high.

Analysts at ANZ expect Asian stocks to continue to struggle.

“A confluence of powerful headwinds is building – a slowing China, higher commodity prices at the wrong time of the business cycle, and a mild rebound in household demand,” they said.

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“Each of these developments, combined with monetary policy normalisation, can weigh on stock market earnings and valuations.”

Tokyo’s Nikkei outperformed, however, rising 0.50% after Japanese Prime Minister Fumio Kishida announced a fresh stimulus package with spending worth around 56 trillion yen ($490 billion). [.T]

The yen hardly reacted to the news, and was headed for a small weekly loss, trading at 114.33 per dollar in sight of its almost five-year low of 114.97 a few days ago.

Other major currencies were also largely quiet with the dollar sitting just below a 16-month high hit against a basket of its peers earlier in the week.[FRX]

U.S. benchmark Treasury yields were steady at 1.5942%.

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“There is a lot already in the price and as a result, progress toward higher yields is likely to be slow and defined by momentum shifts and sentiment swings,” said analysts at Westpac in a note. [US/]

Oil prices were continued their recent volatility. U.S. crude rose 0.96% to $79.77 a barrel. Brent crude rose 0.97% to $82.03 per barrel. [O/R]

On Thursday, oil fell to six-week lows after Reuters reported, citing sources, that the Biden administration asked some of the world’s largest oil consuming nations – including China, India and Japan – to consider releasing crude stockpiles in a coordinated effort to lower global energy prices.

Spot gold rose 0.11%.

(Reporting by Alun John; Editing by Shri Navaratnam)

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Walmart veteran Biggs to step down as CFO next year

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November 29, 2021

By Uday Sampath Kumar

(Reuters) -Walmart Inc said on Monday longtime executive Brett Biggs will step down from his role as chief financial officer of the world’s largest retailer next year.

Biggs, the finance chief since 2015, helped oversee a period of rapid change at Walmart as the brick-and-mortar retailer launched and expanded a number of initiatives to help fend off competition from Amazon.com Inc.

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Walmart made its biggest overseas investment in 2018 with a $16 billion deal to buy a majority stake in Indian online marketplace Flipkart, and beefed up its U.S. e-commerce business through the purchase of apparel retailers Modcloth and Bonobos.

Monday’s announcement came as a surprise to some analysts who had viewed Biggs as next in line for Walmart’s top job.

“Bret Biggs was a candidate to ultimately succeed Doug McMillon as CEO, given his long tenure at the company and broad experience across business units and functions outside of finance,” said Jason Benowitz, senior portfolio manager at Roosevelt Investment Group.

“However, we expect McMillon to serve many more years at the helm,” Benowitz added.

Walmart’s shares were down 1% in late morning trade.

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Biggs had held several finance positions, including CFO of the company’s international division and U.S. business, since joining the company in 2000.

Biggs will remain in the role until a successor is named next year, Walmart said, adding he will continue to represent the company as a board member of its fintech startup until January 2023.

The startup, a joint venture with investment firm Ribbit Capital, aims to develop financial products for Walmart’s employees and customers.

Walmart said it was considering internal and external candidates to replace Biggs, as the company deals with surging labor and supply chain costs that have eaten into its profit margins.

(Reporting by Uday Sampath in Bengaluru; Editing by Shinjini Ganguli, Shounak Dasgupta and Sriraj Kalluvila)

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Cyberpunk maker CD Projekt misses quarterly profit forecast

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November 29, 2021

(Reuters) – CD Projekt, the Polish video game maker behind “Cyberpunk 2077”, missed expectations on Monday with its third-quarter net profit, weighed down by higher costs.

The company’s flagship game has helped to boost sales and earnings this year but its third-quarter net profit of 16.3 million zlotys ($3.92 million) was down 78% from the previous quarter, missing analyst expectations for a 51% drop to 36 million zlotys.

(Reporting by Anna Pruchnicka; Editing by David Goodman)

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Cyber Monday spending expected to slow as shoppers see fewer deals

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November 29, 2021

By Uday Sampath Kumar

(Reuters) -U.S. retailers are estimated to generate online sales of up to $11.3 billion on Cyber Monday, a decline in growth from a year earlier as fewer discounts and limited choices due to global supply chain disruptions deter shoppers.

Retailers had also spread out promotional deals across more weeks this year to protect profit margins from surging supply chain costs and to better manage inventories amid widespread product shortages ahead of the Christmas shopping season.

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Those attempts have pinched sales on what are traditionally some of the biggest shopping days of the year, with Adobe Analytics data over the weekend showing spending online during Black Friday fell for the first time ever.

“Online sales on big shopping days like Thanksgiving and Black Friday are decreasing for the first time in history, and it is beginning to smooth out the shape of the overall season,” said Taylor Schreiner, director, Adobe Digital Insights.

U.S. spending on Cyber Monday, which gained popularity in the mid-2000s, is expected to be between $10.2 billion and $11.3 billion, according to estimates from Adobe. 

That translates to roughly flat growth at the midpoint compared to last year’s $10.8 billion, which was a near 15% jump from 2019.

Excitement on social media around Cyber Monday is also ebbing.

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“Cyber Monday continues to be extremely relevant, particularly in the digital world, but the buzz has been more muted than we’ve seen in recent history,” said Rob Garf, general manager of retail at Salesforce.

Discount rates in the United States in the week leading up to Cyber Monday were on average 8% lower than they were last year, according to Salesforce.

The holiday season kicks off just as the new Omicron coronavirus variant has triggered uncertainty over the economic reopening, but experts say it is too early to predict the impact on consumer spending.

(Reporting by Uday Sampath in Bengaluru; Editing by Sriraj Kalluvila)

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