Wall Street’s main indexes tumbled on Monday with Nasdaq leading the declines as technology stocks dropped on expectations of a sooner-than-expected rate hike that pushed U.S. Treasury yields to fresh two-year highs.
While the Nasdaq pared its losses in the afternoon session it had earlier fallen as much as 10.37 percent below its intraday record level reached on Nov. 22. It was last trading almost 8 percent below its Nov. 19 closing record. It would confirm a correction if it closes 10 percent or more below the record close.
The S&P 500 consumer discretionary, technology and communication services sectors, which include high profile growth companies, were falling sharply.
Along with watching rising bond yields, investors are also anxiously awaiting this week’s inflation data and what it will mean for U.S. Federal Reserve monetary policy tightening, according to Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. The analyst is also worried about the impact of the latest coronavirus case numbers on the fourth quarter earnings season which kicks off later this week.
“People remain concerned about what inflation looks like and how the Fed is going to act to mitigate the situation,” said Tuz. “Technology, especially companies with low or no profits and/or high multiples get hurt when rates move up sharply because future earnings and what they’re worth today become more suspect.”
Randy Frederick, managing director of trading and derivatives at Charles Schwab in Austin, Texas, says big technology companies should do fine, but he sees them “getting dragged down by the fact that people are selling off the unprofitable, heavily leveraged, heavily indebted newer tech companies that have gone public recently especially the ones that were SPACs (special purpose acquisition companies).”
And the technology stock selloff could continue until the next Fed meeting later this month, Frederick said.
By 2:07 p.m. ET, the Dow Jones Industrial Average fell 255.44 points, or 0.71 percent, to 35,976.22, the S&P 500 lost 32.01 points, or 0.68 percent, to 4,645.02 and the Nasdaq Composite dropped 129.52 points, or 0.87 percent, to 14,806.38.
Of the S&P’s 11 major sectors only healthcare, up 0.3 percent, was showing a small gain while consumer discretionary, down 1.6 percent was the biggest percentage decliner.
The S&P 500 and the Nasdaq were on course for five straight days of declines as growth stocks tumbled after investors began to recalibrate their portfolios to account for a more hawkish Fed.
Goldman Sachs said it expects the Fed to raise rates four times in 2022, compared to its previous forecast of three.
Traders have ramped up their rate hike expectations since the Fed’s minutes from the December meeting appeared to signal an earlier-than-expected rate rise.
The benchmark 10-year Treasury yield rose to its highest level in nearly two years on Monday, boosting value-oriented banks index to a fresh record high.
Nasdaq heavyweight Tesla dropped earlier in the session but the stock and regained lost ground by late afternoon trading. Chief Executive Elon Musk may have rattled some investors after tweeting on Friday that the electric carmaker will raise the U.S. price of its advanced driver assistant software.
Microsoft was down 1.2 percent after a media report that the software company has been losing its augmented-reality talent to peers like Meta Platforms.
Investors await inflation data this week for cues on consumer and producer prices, and whether they will sway the trajectory of the Fed’s interest rate hikes.
Nike was down almost 5 percent after HSBC downgraded the stock to “hold”.
Declining issues outnumbered advancing ones on the NYSE by a 3.02-to-1 ratio; on Nasdaq, a 3.23-to-1 ratio favored decliners.
The S&P 500 posted 37 new 52-week highs and 5 new lows; the Nasdaq Composite recorded 59 new highs and 592 new lows.
OneWeb, Hughes to provide satellite broadband connections in India
Satellite communication companies, OneWeb and Hughes, offered high-speed, low Earth orbit (LEO) satellite broadband connectivity across India.
The agreement between OneWeb and Hughes Communications India Private Ltd. (HCIPL), a joint venture between Hughes and Bharti Airtel Limited, follows the Memorandum of Understanding (MoU) signed by the companies in September 2021.
“OneWeb’s constellation will cover the length and breadth of India, from Ladakh to Kanyakumari and from Gujarat to the Northeast and bring secure solutions to enterprises, governments, telcos, airline companies, and maritime customers,” said Neil Masterson, CEO, OneWeb.
Through its parent company EchoStar, Hughes is a well-established and supportive OneWeb shareholder. It is also an ecosystem partner to OneWeb, creating gateway electronics – including those in Gujarat and Tamil Nadu – and the core module that will power every user terminal for the system.
The main contractor also agrees with the U.S. Air Force Research Lab to integrate and demonstrate managed LEO SATCOM using OneWeb capacity in the Arctic region.
“This announcement marks a turning point for Digital India. Enterprise and government customers, including telecom service providers, banks, factories, schools, defense organizations, domestic airlines, and offshore vessel operators,” Partho Banerjee, president and managing director, HCIPL, said.
“They are eagerly anticipating the arrival of new high performing satcom services. We look forward to bringing them high-speed, low-latency services from HCIPL using OneWeb capacity—and catapulting India to the cutting edge of connectivity,” he added.
Neil Masterson, CEO, OneWeb, commented: “OneWeb is delighted to partner with Hughes to offer high-speed, low-latency satellite broadband solutions and contribute to the Digital India vision. OneWeb’s constellation will cover the length and breadth of India, from Ladakh to Kanyakumari, from Gujarat to the Northeast, and bring secure solutions to enterprises, governments, telcos, airline companies, and maritime customers. OneWeb will invest in setting up enabling infrastructure such as Gateways and PoPs in India to light up the services.”
OneWeb’s latest satellite launch on 27 December 2021 brought its total in-orbit satellites to 394, over 60 percent of the planned 648 LEO satellite fleet.
It plans to begin global service by the end of 2022 as demand continues from telecommunications providers, aviation and maritime markets, ISPs, and governments worldwide for its low-latency, high-speed connectivity services.
Yemen’s internet service returns after four-day outage following air strike
Internet services were largely restored in Yemen on Tuesday, residents said, after a four-day outage https://www.reuters.com/world/middle-east/yemenis-struggle-without-internet-third-day-after-air-strikes-2022-01-23 following air strikes by a Saudi-led coalition on the Red Sea city of Hodeidah, which damaged telecoms infrastructure.
The Iran-aligned Houthi group’s deputy foreign minister, Hussein al-Ezzi, in a Twitter post praised efforts to repair the damage and restore services.
“To all friends and loved ones: We missed you,” he said.
Internet blockage observatory NetBlocks said at 1000 p.m. GMT Monday that services were starting to be restored.
Seven years of conflict have divided Yemen between an internationally recognised government based in the southern city of Aden, and the Houthi group that largely controls the north.
The coalition had said its strikes on Friday were aimed at Houthi military capabilities in Hodeidah, the main landing point for the country’s undersea web connection.
The outage hindered money transfers by Yemenis outside the country. The war and ensuing economic collapse has pushed millions into poverty and parts of Yemen to the brink of famine.
Thailand to introduce data center campus by Etix
A new data center is expected to be rolled out by IT service management company ETIX Everywhere, which has acquired a 67 percent interest in Genesis data center in Bang Chalong, 30 km from Bangkok’s historical center.
This data center will create a new data center campus, which will be jointly developed with its local partner Interlink Telecom.
As such, Louis Blanchot, Group CEO ETIX Everywhere, said: “We are very excited to announce our expansion into Asia starting with this acquisition in Bangkok, one of the most dynamic markets in the zone. This first step in Asia is a major milestone in ETIX’s strategy to support our global customers providing them our best-in-class colocation services wherever they need”.
According to a press release, the Genesis data center – renamed ETIX Bangkok #1 – began working with 2.4 MW of IT power. The future development of the campus will offer significant additional capacity.
In addition, this data center campus is the first of its kind in the market, offering such a high level of severance with four diverse routes for fiber access and power supply coming from two separate substations.
On his part, Nuttanai Anuntarumporn, CEO of Interlink Telecom PLC, said: “We are very pleased to have a strong partner like ETIX Everywhere with experience in this industry. We believe that our partnership will support the booming Southeast Asia data center and cloud industry and lead us to common success.”
Thailand has a large population, and remarkable internet penetration is an important growth market for the public cloud and OTT service providers.
They need to bring their data as close as possible to the end-users to deliver better service, driving demand for colocation services.
“Telehouse Bangkok will be the first data center of its kind in Bangkok and will come at a time when we expect the data center market in the country to see robust growth owing to the boom in the digital economy,” said Kenichi Miyashita, managing director, Telehouse Thailand.
“It aims to provide the best environment for all the Internet-related customers, such as cloud service providers, content providers, telecoms and ISPs, to connect with one another with minimal latency.”
The company, established in 1988 and owned by Japanese telco KDDI, has operations in 15 cities globally, including the U.S., UK, France, Germany, China, Singapore, Vietnam, and Japan.
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