Shares rallied after firm posted blockbuster profits and hinted at metaverse expansion
The iPhone maker’s shares soared some 7% to $170.33 per share on Friday, marking the biggest one-day jump in a year and a half. Already the globe’s largest company by market value, Apple posted a Wall Street-beating record $123.9 billion in sales for the last three months of 2021, despite pressing supply-chain constraints, the company announced this week. Total revenue increased 11% in the quarter ended December 25, 2021, Apple said, while profits jumped 20%, reaching a record $34.6 billion.
“Apple is known for its supply-chain prowess and many wonder about the actions Apple has taken and will take to better position itself for this calendar year,” Scott Kessler of analytics firm Third Bridge told Reuters.
The figures helped Apple shares make up for the losses it has seen in recent weeks during a sell-off in growth and technology stocks.
The positive market reaction also stemmed from Apple’s announcement of its planned metaverse push. The company’s CEO Tim Cook on Thursday said Apple is mulling expanding its library of 14,000 augmented reality (AR) apps.
“We see a lot of potential in this space and are investing accordingly,” Cook said, responding to a question on Apple’s plans for the metaverse, the increasingly popular virtual world environment that can be accessed via internet.
America’s trade deficit continues to widen as exports shrink
The US trade deficit has soared past $1 trillion in 2021 for the first time on record, government estimates from the Census Bureau show. For the past year, the figure rose to an unprecedented $1.08 trillion from $893.5 billion in 2020, a record high of its own.
The goods-trade gap jumped 3% in December alone to $101 billion, posting the biggest monthly increase to date. Analysts explain the situation with the shift of consumer focus to imports of a variety of non-US-made products, like toys, smartphones, and appliances.
“Strong demand and shifting consumer preferences during the pandemic led to a surge in imports that continues to outstrip exports and is contributing to all-time highs in the deficit,” Rubeela Farooqi, chief US economist at New York-based High Frequency Economics, told Reuters.
Analysts add that while the US showed a speedy recovery after the Covid-19 pandemic-induced crisis, enabling citizens to boost their spending on goods, many other countries lagged behind in their economic rebound, which made the demand for US exports slower to recover. More simply put, Americans could afford to purchase more non-US-made goods, and that’s what they did.
Experts say the deficit may narrow when the global recovery catches up, but with the Omicron variant still at large, this may take a while.
“The Omicron variant threatens to fuel an even wider deficit as virus concerns weigh on global growth and tourism, putting downward pressure on US exports, while domestic goods demand stays robust,” Mahir Rasheed of Oxford Economics told Market Watch.
More specific numbers on the trade deficit are expected next week when the full December report on the US trade balance is due to be published.
Deliveries more than doubled as energy crisis tightens grip
The amount of liquefied natural gas (LNG) running from entry terminals to the European gas transmission system has reportedly set a new monthly record in January, hitting the highest for this month since records began in 2011.
Some 405 million cubic meters of gas were delivered to Europe as of January 28, marking an enormous increase of 110% compared to the annual average for this date over the past five years, according to data from the Gas Infrastructure Europe trade group, as quoted by TASS.
The capacities of re-gasification of LNG and further injections of the fuel into pipelines in Europe are currently loaded at 67.4% of the maximum, the group’s data shows.LNG stocks in European gas storage tanks are 5% above the five-year average, which is thought to be quite high for the end of January.
Earlier this week, the WSJ reported that more than two-dozen tankers loaded with LNG were en route from the US to Europe, lured by high prices in the region, with another 33 ships also likely to head to the EU.
The European energy crunch, which has sent gas and power prices soaring, was exacerbated when storage tanks in the EU dropped to their lowest seasonal levels in more than ten years. The decline was attributed to longer-than-usual maintenance at Norwegian fields and to Russia restocking its own inventories.
On January 27, the loading levels of gas reserves in underground storage facilities in Europe dropped to 39.22%, which is 15.6% less than the annual average for this date over the past five years. The storage tanks currently contain 42.34 billion cubic meters, 15.7 billion cubic meters less than in 2021.
Additionally, the latest speculation over probable military conflict between Russia and Ukraine continues fueling concerns about the supply of Russian gas. The US and Western allies have pledged to impose a new series of anti-Russian sanctions in the event of an invasion, the very idea of which has been repeatedly rejected by Moscow. The sanctions, reportedly, may target Russian energy sales.
The search for safe haven assets led to a rise in gold bar and coin purchases in 2021
A new report by the World Gold Council (WGC) has revealed that demand for the yellow metal increased to 4,021 tons last year. The growth was propelled by fourth-quarter demand, which jumped almost 50% to a 10-quarter high.
“Demand recouped much of the Covid-related losses sustained during 2020,” the WGC said.
Central bank gold buying has far outpaced that of 2020, surging 82% to 463 tons and thus lifting global reserves to a near 30-year high. The pace of buying slowed in the second half, with a 22% year-on-year decline in Q4.
According to the WGC data, demand for gold in the consumer-driven jewelry and technology sectors also recovered throughout the year in line with economic growth and sentiment. Jewelry growth was almost universal. “Gains were fueled primarily by the two global heavyweights – India and China – but decent recovery was also seen across all other regions.”
Meanwhile, global holdings of gold exchange-traded funds (ETFs) fell by 173 tons in 2021, in sharp contrast to 2020’s record 874-ton increase.
“Gold’s performance this year truly underscored the value of its unique dual nature and the diverse demand drivers. On the investment side, the tug of war between persistent inflation and rising rates created a mixed picture for demand. Increasing rates fueled a risk-on appetite among some investors, reflected in ETF outflows,” said WGC Senior Analyst EMEA Louise Street.
On the other hand, she said, a search for safe haven assets led to a rise in gold bar and coin purchases, buoyed by central bank buying.
“Declines in ETFs were offset by demand growth in other sectors. Jewelry reached its highest level in nearly a decade as key markets like China and India regained economic vibrancy. We expect similar dynamics to influence gold’s performance in 2022, with demand drivers fluctuating according to the relative dominance of key economic variables,” Street noted.
Arizona Senator pitched a bill to legalize the token, in breach of Constitution
US Senator Wendy Rogers has introduced a bill to make bitcoin legal tender in Arizona this week. With the bill, SB 1341, the Senator is seeking to amend the list of currently accepted legal tender to include bitcoin. This would allow the use of the digital token for the payment of public charges, taxes, debt and other purposes.
However, the US Constitution does not allow individual states to create their own legal tenders. This leaves the question on whether the bill could come into effect as law. The bill would have to pass the Arizona state senate and house and then be signed into law by the State Governor Doug Dukey. However, if indeed passed, the bill could set up a precedent for other US crypto-friendly states.
Many US states have become increasingly interested in Bitcoin and cryptocurrencies in general. Florida Governor Ron DeSantis last month pitched a plan that would allow businesses in the state to pay taxes in cryptoсurrency. Legislators in Wyoming have been mulling using blockchain to boost transparency in the way public funds are spent, while Ohio in 2018 became the first US state to allow taxes on digital assets, but had to scrap the program due to concerns that it was substandard.
New York Mayor-elect Eric Adams took one of his paychecks in bitcoin, while candidate for Texas governor Don Huffines recently said he would make bitcoin legal tender if he’s elected. Moreover, recent reports state that the US government itself has a sizable hoard of cryptotokens.
