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(Bloomberg) — Amazon.com Inc. led big technology and internet stocks lower after Federal Reserve Chair Jerome Powell dashed hopes that relief from the central bank’s monetary tightening campaign was on the horizon.

The e-commerce giant sank 4.8% on Wednesday, while Apple Inc., Microsoft Corp., Alphabet Inc., and Meta Platforms Inc. all fell more than 3%, as did the Nasdaq 100 index. 

Stocks turned decisively lower after Powell said it was “very premature” to think about pausing interest rate hikes minutes after the central bank raised its benchmark rate by 75 basis points for the fourth-consecutive time. He also noted data since the last meeting suggests that the “ultimate level of interest rates will be higher than previously expected.”

“What we heard from Powell today was higher for longer and higher for longer is not good for tech stocks,” said Matt Maley, chief market strategist at Miller Tabak. 

The sector is among the worst performing this year amid soaring inflation that’s prompted the Fed to embark on a series of rate hikes intended to slow the economy and curb the rise in prices. The Nasdaq 100, which is heavily weighted toward technology companies, has fallen by a third this year.

–With assistance from Ryan Vlastelica.

(Updates with market close.)

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(Bloomberg) — Elon Musk has won over at least one Twitter Inc. skeptic with his acquisition of the company. 

Cathie Wood now holds a small slice of the newly private company in her ARK Venture Fund and is looking to own more, she said in an interview with Bloomberg TV Wednesday. The fund launched in September and targets harder-to-trade assets. 

“Right now we’re very small, but over time, we would like Twitter to be a larger holding,” she said. While she doesn’t recall the precise number, she said about $1 million of the fund was invested in Twitter. 

Wood has been a long-time fan of Musk, and Tesla Inc. is among the biggest holdings in her flagship Ark Innovation ETF (ticker ARKK). Earlier this year, exchange traded-funds managed by Wood’s ARK Investment Management had sold much of their Twitter positions. Wood had said her firm’s confidence in the social media company “was nicked a bit as we saw some of the censorship issues and controversies.” 

But she now sees the potential for Musk to build Twitter into a “super app” that includes payment and banking capabilities, she said in a panel at the Web Summit in Lisbon earlier Wednesday.

“He and Jack Dorsey working together I think could turn this into a super app,” she said, referring to Musk and Twitter’s founder, who were in communication as Musk worked on the takeover. “I think they have a good shot.”

–With assistance from Sam Potter.

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(Bloomberg) — JPMorgan Chase & Co executed its first live trade on a public blockchain, a significant step toward integrating with the plumbing underlying the world of cryptocurrencies. 

The bank issued tokenized S$100,000 ($71,000) as part of the Singapore central bank’s pilot programs exploring the use of decentralized finance, or DeFi, in the banking sector, then traded it for tokenized yen with Japan’s SBI Digital Asset Holdings. DBS Bank Ltd., Standard Chartered Plc and HSBC Holdings Plc are also part of the pilots.

While the transaction wasn’t a crypto trade, it used the infrastructure developed by crypto firms: the Polygon blockchain, which makes transactions on the Ethereum blockchain cheaper, and a modified version of Aave, a major DeFi lending project. 

“Today was the first step to show that we can actually trade on these public networks,” said Tyrone Lobban, head of Blockchain Launch and Onyx Digital Assets at JPMorgan, in an interview. “The future is really working toward scaling this pivotal moment.” 

Wall Street institutions have been exploring the use of blockchain in their businesses, such as for intraday repurchase, a type of short-term borrowing in fixed income, and cross-border trades. But existing efforts by banks, including New York-based JPMorgan, are based on private blockchains that require users to receive permission to join.

Public blockchains, which allow everyone to access the infrastructure, can potentially remove challenges such as isolated or fragmented liquidity. In a bid to maintain regulatory compliance, platforms such as Aave Arc provide permissioned liquidity pools, which require participants to undergo so-called know-your-customer verification. 

“We clearly see what’s happening in the public domain and we can see how the innovation is creating not only new ways of doing financial transactions, but new types of products as well,” Lobban said. The bank will explore using other blockchain networks over time, he added.

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(Bloomberg) — Alphabet Inc.’s Google is preparing an app that will use artificial intelligence to let consumers create images by typing a few words. 

People will only be able to do two things with the app: construct buildings through a function called “City Dreamer,” or use the “Wobble” feature to interact with a cartoon monster, Douglas Eck, a principal scientist at Google, said at the company’s AI@ event in New York Wednesday. The tools will be available through Google’s AI Test Kitchen app. A release date for the new capabilities wasn’t given.  

AI imaging technologies like DALL-E can produce vivid pictures from a brief text description, like teddy bears shopping for groceries in ancient Egypt. But critics say so-called generative AI can also be used to spread misinformation, use artists’ work without credit and enforce harmful biases, and Eck said Google’s slow roll out to the public reflects concerns about the emerging technology. 

“Generative AI models are powerful, there’s no doubt about that,” Eck said during a presentation at the event. “But we also have to acknowledge the real risks that this technology can pose if we don’t take great care, which is why we’ve been slow to release them.”

Google also presented improvements with AI tools that help with tasks such as coding and audio generation, as well as a text creation program that authors can use to write short stories. The company also announced a goal of having 1,000 languages in its translation services and plans to expand climate and health technology, such as flood forecasting. 

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(Bloomberg) — Stocks slumped after Federal Reserve Chair Jerome Powell said that the central bank still has “some ways to go” to knock down inflation while adding that it’s very premature to think about pausing rate hikes.

The S&P 500 retreated after rallying when the Fed chief said that a slower pace of rate hikes could come as soon as December. Tech shares underperformed. Two-year US yields — which are more sensitive to imminent Fed moves — trimmed their slide.

Data Wednesday showed hiring at US companies rose in October by more than forecast, underscoring resilient labor demand despite the Fed’s efforts to cool the economy. A strong job market has fueled fast wage growth, contributing to rapid inflation and putting pressure on the Fed to aggressively tighten monetary policy.

The Treasury halted the longest string of cutbacks to its quarterly sales of longer-term debt in about eight years, showcasing the end of a period of historic reduction in the fiscal deficit.

In corporate news, Boeing Co.’s chief said the planemaker could generate $10 billion in cash annually by mid-decade, once it turns around its operations after years of setbacks and miscues. China has ordered a seven-day lockdown of the area around Foxconn Technology Group’s main plant in Zhengzhou, a move that will severely curtail shipments in and out of the world’s largest iPhone factory.

Key events this week:

• Bank of England rate decision, Thursday
• US factory orders, durable goods, trade, initial jobless claims, ISM services index, Thursday
• ECB President Christine Lagarde speaks, Thursday
• US nonfarm payrolls, unemployment, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 fell 1% as of 2:51 p.m. New York time
• The Nasdaq 100 fell 1.4%
• The Dow Jones Industrial Average fell 0.5%
• The MSCI World index fell 0.5%

Currencies

• The Bloomberg Dollar Spot Index fell 0.1%
• The euro was little changed at $0.9882
• The British pound fell 0.2% to $1.1465
• The Japanese yen rose 0.8% to 147.15 per dollar

Cryptocurrencies

• Bitcoin fell 0.2% to $20,443.92
• Ether fell 0.6% to $1,566.7

Bonds

• The yield on 10-year Treasuries advanced three basis points to 4.07%
• Germany’s 10-year yield advanced one basis point to 2.14%
• Britain’s 10-year yield declined seven basis points to 3.40%

Commodities

• West Texas Intermediate crude rose 1.2% to $89.39 a barrel
• Gold futures were little changed

–With assistance from Lu Wang.

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(Bloomberg) — Elon Musk, who’s been busy taking over Twitter Inc., took a break Wednesday to attend a Pentagon ceremony.

The event was a change-of-command ceremony at Andrews Air Force Base outside of Washington. It marked the retirement of General John Raymond, the first head of US Space Force, who singled out Musk by name for showing up. 

It reflects one of the billionaire’s other interests as co-founder and chief executive of Space Exploration Technologies Corp. which he turned into a major contractor for the Defense Department’s national security satellite launches.

Raymond invited Musk and other executives of companies involved in space programs to the event, according to a Pentagon official, and General Mark Milley, chairman of the Joint Chiefs, also name-checked Musk in his remarks.

“What he symbolizes, in reality, is the combination of the civil and military cooperation and teamwork that makes the United States the most powerful country in space,” Milley said during the ceremony. 

Musk won a substantial share of the Pentagon’s space launches after campaigning to break into what he called a monopoly held previously by a joint venture of defense giants Boeing Co. and Lockheed Martin Corp. On Tuesday, SpaceX’s Falcon Heavy rocket launched from Kennedy Space Center carrying classified payloads for Space Force. It was the first Falcon Heavy flight after a three-year hiatus and marked the first use of the rocket on the U.S.’s most sensitive National Security Space Launch missions.

The SpaceX launch and Musk’s attendance at the Defense Department ceremony highlighted the contradictory role he’s come to play as both a Pentagon contractor and a critic of the US government. He once compared President Joe Biden to a damp sock puppet “in human form,” and last month he threatened to cut financial support for SpaceX’s Starlink satellite Internet service in Ukraine — a plan he later reversed.

The White House hasn’t yet decided if it would pay $8 a month that Musk has said he’ll require to maintain blue-check verification of Twitter accounts, a spokesperson said, while sidestepping a question about Musk’s purchase of the platform.

“I don’t believe it’s an issue that made it to the president’s desk yet, not a conversation that the president is aware of,” Press Secretary Karine Jean-Pierre said Wednesday. “That’s something for the president that we need to talk to the president about.” 

 

–With assistance from Tony Capaccio, Jennifer Jacobs and Josh Wingrove.

(Updates with General Milley’s conment in fourth paragraph and White House comment in final paragraph)

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(Bloomberg) — The White House hasn’t decided whether it would pay $8 a month to maintain verification of its Twitter Inc. accounts.

“I don’t believe it’s an issue that made it to the president’s desk yet, not a conversation that the president is aware of,” Press Secretary Karine Jean-Pierre said Wednesday. “That’s something for the president that we need to talk to the president about.” 

Jean-Pierre also sidestepped a question about Elon Musk’s purchase of the platform and what impact it was having on political discourse. Musk has been held up as a champion of free speech by conservatives.

Read more: Musk Says Twitter Will Verify People for $8 a Month

President Joe Biden and Musk have shown no warmth for one another. Musk’s Tesla Inc. has historically opposed labor unions, and the billionaire has recently aligned himself politically with Republicans. 

Biden instead has championed automakers whose workforces are unionized.

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(Bloomberg) — The largest US Latino civil rights organization says it was shut out of a meeting with Elon Musk when Twitter’s new owner invited its ousted leader to the table. 

The group said it missed an opportunity on Monday to engage with Musk on his plans to handle hate speech on Twitter because he met with Sindy Benavides, who was terminated as LULAC’s chief executive officer Oct. 22.

Musk tweeted on Tuesday that he met with the heads of human rights groups including the League of United Latin American Citizens, or LULAC, to discuss his plans to handle misinformation on the platform. 

Benavides “does not represent LULAC in any capacity before any audience,” David Cruz, LULAC’s communications director, told Bloomberg News. “Her presence denied us having a voice and adding our perspective to this important debate at a critical time in our history.” 

LULAC’s national board voted to terminate Benavides, according to a press release the group issued last month that said it was the “start of a new era” for the group.

LULAC in recent weeks has broken down into two competing factions, with each claiming they are the legitimate leaders of the organization. After the majority of LULAC’s board voted to terminate Benavides’ contract, a splinter group of the organization voted confirm her as one of their leaders, according to the Dallas Morning News. 

Benavides said Wednesday that her role is “making the voices of the Latino community are heard.”

“Even though we have internal governance issues happening, which will be sorted out in the court of law, my role will be to not be distracted by these issues and carry on the mission of the organization,” Benavides said in a phone interview. 

Twitter didn’t respond to a request for comment. 

The incident shows how complicated it will be for Musk to navigate the dynamics of the civil rights community as he seeks to work with its leaders, many of whom have expressed concern over his plans to eliminate some of Twitter’s safeguards against hate speech, misinformation and violence. 

Musk, who describes himself as a free speech absolutist, previously said he hopes to reduce Twitter’s content moderation efforts and restore the accounts of users who have been removed — including former President Donald Trump, who was suspended in the wake of the violent Capitol Hill riots on Jan. 6, 2021. 

But Musk on Tuesday tweeted that “Twitter will not allow anyone who was de-platformed for violating Twitter rules back on platform until we have a clear process for doing so, which will take at least a few more weeks.” 

He said he met with civil society leaders — including the heads of the National Association for the Advancement of Colored People, Anti-Defamation League and more — in order to talk “about how Twitter will continue to combat hate & harassment & enforce its election integrity policies.” 

Dozens of advocacy groups in an open letter this week called on Twitter’s top advertisers to boycott the platform if Musk lowers safety standards for content.

(Updates with statement from Sindy Benavides starting with seventh paragraph. A previous version of the story corrected the name of LULAC’s ousted CEO in third paragraph)

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(Bloomberg) — European natural gas jumped as traders weighed potential supply curbs this winter against unseasonably warm weather and muted demand.

Benchmark futures closed more than 8% higher, rebounding to levels seen on Monday. Liquefied natural gas flows from the US are in focus. Freeport LNG in Texas, hobbled by a fire earlier this year, has yet to submit a restart plan to federal regulators, stoking speculation that it won’t resume operations this month as planned.

That’s keeping the market nervous about a thin cushion of global supply after Russia’s gas cuts, which may support prices when temperatures inevitably drop. 

Dutch front-month gas, Europe’s benchmark, surged as much as 17% before settling 8.3% higher at €125.863 per megawatt-hour. The UK equivalent went up 9.2%.

For now, temperatures are expected above seasonal norms in most of western Europe for the next two weeks, with cooler conditions limited to the southeast of the continent, according to forecaster Maxar Technologies LLC. Europe’s gas storage sites are almost 95% full, providing a buffer for when the weather turns colder. 

Delayed heating demand and reduced gas consumption by industries have provided some respite. At least four LNG vessels bound for the UK are delaying their unloadings amid mild weather, ship-tracking and port data show.

“Europe should be able to get through this winter,” Vontobel Asset Management AG said in a note. “That said, while LNG imports have alleviated immediate supply concerns, even inventories filled to the brim will hardly be enough to prevent some rationing.”

Politicians are weighing more steps to safeguard markets from potential risks in colder months.

Germany is expanding aid to consumers struggling with rising energy bills. The UK is testing its blackout emergency plans, the Guardian reported, citing documents that warn of a “reasonable worst-case scenario” in which energy sectors could be “severely disrupted” for up to a week.

The European Union has said it’s working on ways to cap price spikes, but there’s no agreement on details yet, while top suppliers warn against direct interventions. Limiting prices may both slow down much needed demand destruction and divert gas flows away from Europe if there are other regions willing to pay more. 

Click here for the Europe Energy Crunch blog

“Europe should be looking for long-term contracts with fixed prices that give security of supply, and then you can actually design an economic policy knowing what those prices will be,” Mathios Rigas, chief executive officer of Mediterranean-focused gas producer Energean Plc, said in an interview on the sidelines of an industry conference in Abu Dhabi this week.

 

–With assistance from Verity Ratcliffe and Anna Shiryaevskaya.

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(Bloomberg) — Glencore Plc, one of the world’s biggest mining and commodity trading companies, was among lenders that provided emergency funding for Britishvolt Ltd., according to people familiar with the situation.

Glencore provided less than £5 million ($5.7 million) in short-term funding to the company that’s at the heart of Britain’s bid to create an electric-car battery industry, said the people, who declined to be identified as the situation is private.

The less than three-year-old business said earlier Wednesday that it will receive a bridging loan that will give it a few weeks to secure longer-term finances. Britishvolt said it’s pursuing “positive ongoing discussions” with potential funders and has received approaches from “several more international investors in the past few days.”

The company, which previously already had backing from Glencore, is a key part of the UK’s ambition to build facilities capable of providing batteries for millions of electric vehicles. However, it is yet to secure funding to build one of the biggest cell factories.

Representatives for Britishvolt and Glencore declined to comment. 

The bridging loan is not expected to unlock government funds that depend on the construction of the plant going ahead. Bloomberg News reported last month that Britishvolt had discussed a sale of its site to Inobat, a company chaired by former Aston Martin boss Andy Palmer.

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