ECONOMIC SILUET: 5 things to know before the stock market opens Friday

Jumat, 20 Januari 2023

5 things to know before the stock market opens Friday

FRI, JAN 20, 2023

MORNING SQUAWK

1. January rally loses steam

Just like many a New Year's resolution, January's stock market rally has faded after just a few weeks. All three major indicies are headed for a losing week, while the Dow turned negative for the young year. Investors are facing down a mixed bag of corporate earnings, murky signals from the big banks, the prospect of a recession and no sign that the Federal Reserve will start to lay off its aggressive rate increases, despite its recent success in slowing down inflation. Next week brings an even bigger slate of earnings, as well as the Fed's next rate-setting meeting. Read live markets updates here.

2. Google joins the tech layoff spree

Alphabet's Google said Friday morning that it would lay off 12,000 employees, making it the latest tech giant to unveil significant job cuts. CEO Sundar Pichai told employees in a memo that the decision was based on a "rigorous review" of the company's business, and that the layoffs would affect various regions and product areas. "As an almost 25-year-old company, we're bound to go through difficult economic cycles," Pichai said. Google's announcement comes two days after Amazon started laying off 18,000 people and Microsoft said it would slash 10,000 jobs.

3. Netflix's wild ride

Netflix gave markets a lot to chew over when it reported quarterly earnings after the bell Wednesday. First up, the streaming giant said Reed Hastings, who helped establish the then-DVD-rental-by-mail company in 1997, would leave his co-CEO role and become executive chairman. Operating chief Greg Peters now joins Ted Sarandos as co-CEO. Netflix also reported about 7.7 million new subscribers in the most recent quarter, easily topping Wall Street's expectations of about 4.6 million. Once upon a time, this might have been bad news for Netflix's streaming rivals. But, as CNBC's Alex Sherman points out, all streamers are effectively united against a common enemy: slowing growth. A good quarter for Netflix could bode well for the others.

4. Crypto contagion claims Genesis

The crypto world is a land of confusion. Lender Genesis filed for Chapter 11 bankruptcy protection late Thursday. The filing follows months of speculation over whether Genesis would file for bankruptcy. The lender is a key part of Barry Silbert's Digital Currency Group, which has fallen under increasing pressure since the collapse of Three Arrows Capital and Sam Bankman-Fried's empire, including Alameda Research and FTX. In filings, Genesis listed over 100,000 creditors, with liabilities ranging from $1.2 billion to $11 billion.

5. NATO considers tanks for Ukraine

Ukraine's allies in NATO are considering whether supply German tanks to aid the nation's military in its protracted fight against Russian invaders. German Chancellor Olaf Scholz has been wary of provoking Russia, which is a major energy supplier, and Germany can veto the move on its own. Poland, which has two of the German Leopard tanks in question, said it is ready to send them to Ukraine if Germany opposes the move. "At the moment we are trying to make Germany not only agree these tanks being sent by Poland or other countries, but also to do so themselves," Poland's deputy foreign minister said, according to Reuters. Read live war updates here.

— CNBC's Mike Calia wrote this newsletter. Carmen Reinicke, Ryan Browne, Sarah Whitten, Rebecca Picciotto, Alex Sherman, Rohan Goswami, MacKenzie Sigalos and Natasha Turak contributed.

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