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(Bloomberg) — Stocks climbed after a five-day slide, with traders awaiting key inflation figures for clues on whether Federal Reserve officials will be able to notch down their aggressive tightening campaign.

The rebound in the S&P 500 followed a selloff that put the equity gauge on the cusp of an important technical indicator: its average price of the past 100 days. The tech-heavy Nasdaq 100 outperformed, led by gains in giants Apple Inc. and Microsoft Corp. Treasuries also reversed course Thursday, with 10-year yields on the rise and approaching 3.5%.

Friday’s producer price index for November is one of the final pieces of data Fed policymakers will see before their Dec. 13-14 policy meeting. The PPI in October cooled more than expected. On the eve of the report, traders also weighed some signs the labor market is cooling, with continuing jobless claims climbing to the highest since early February.

“Investors will have a lot to digest these next few days as they get a clearer picture of where we stand in the fight against inflation before the Fed decision,” said Mike Loewengart at Morgan Stanley Global Investment Office. “The market is largely expecting the slowdown in rate hikes to begin next week, but whether the pivot will be enough to steer the economy into a soft landing remains the question.”

Strategists from Morgan Stanley to JPMorgan Chase & Co. have warned investors against piling back into risk on hopes the Fed is getting close to pivoting to easier policy.

“Presumably if the Fed is pivoting this time around, it’s not for a good reason. It’s a deteriorating fundamental picture,” Joyce Chang, chair of global research at JPMorgan, told Bloomberg Television. “I mean, is that really a reason to be buying risk? I think it’s premature to say that there is a Fed pivot.”

Read: Fed Gets a Win Deflating Asset Bubbles Without Financial Crash

At a time when virtually all of Wall Street is on guard against a recession, Jim Paulsen at Leuthold Group said stocks are about to rally at least 25% in the next year. He predicts the S&P 500 will hit 5,000 in the coming 12 months — a far more bullish call than any provided by the strategists Bloomberg regularly surveys.

“The lows are in, and I think we are starting a new bull market,” Paulsen told Bloomberg Television. “The Fed is not the only policy driver in the room. There are others and a lot of those have already started to ease.”

Besides the 100-day moving average, the S&P 500 is trading near a key support at 3,900, a level that has provided the pivot point for reversals on multiple occasions this year.

As the equity market rebounded, the Cboe Volatility Index fell to around 23. Yet derivatives strategists at JPMorgan Chase & Co. say the VIX has further room to advance. 

They expect the fear gauge to average at 25 next year, and see the gauge trading above that level in the first half of the year amid elevated monetary-policy concern before subsiding below the line in the latter part of 2023 when the central bank is expected to pivot its stance.

Read: Risky Companies Rush to Buy Time on Debt Before End of Year

Heightened trader concern over an economic recession has recently pushed up the Cboe equities put/call ratio — the relative trading volume of loss-protecting contracts versus bullish ones — to elevated levels

That suggests there’s “too much pessimism,” according to Ed Yardeni, president of his namesake research firm. “It favors a year-end rally rather than a year-end crash.”

Key events this week:

• US PPI, wholesale inventories, University of Michigan consumer sentiment, Friday.

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.7% as of 1:15 p.m. New York time
• The Nasdaq 100 rose 1%
• The Dow Jones Industrial Average rose 0.5%
• The MSCI World index rose 0.6%

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%
• The euro rose 0.3% to $1.0542
• The British pound rose 0.2% to $1.2226
• The Japanese yen was little changed at 136.60 per dollar

Cryptocurrencies

• Bitcoin rose 0.9% to $16,981.25
• Ether rose 1.7% to $1,253.32

Bonds

• The yield on 10-year Treasuries advanced six basis points to 3.48%
• Germany’s 10-year yield advanced four basis points to 1.82%
• Britain’s 10-year yield advanced five basis points to 3.09%

Commodities

• West Texas Intermediate crude was little changed
• Gold futures rose 0.1% to $1,800 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Cecile Gutscher, Akshay Chinchalkar and Isabelle Lee.

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — A company housing the media and sponsorship rights of Italian football club FC Internazionale Milano SpA risks a potential ratings downgrade after a lack of payments from a cryptocurrency market sponsor.

S&P Global Ratings has placed Inter Media and Communication SpA on a negative credit watch after DigitalBits, a blockchain used to power crypto assets, didn’t pay €16 million ($16.9 million) in bonus payments for the current sports season nor €1.6 million for the previous one, the ratings firm said in a statement on Thursday. 

Inter Media, currently rated B, could be downgraded by one notch if Inter Milan cannot replace DigitalBits with another sponsor offering a similar contract, S&P said. The crypto firm, which adorned the club’s shirts, depends on cashflows from a deteriorating crypto market, and the lost cash for Inter could lead to a more than 50% decline in forecast sponsorship revenues from 2024, S&P said.

“Current weak economic conditions should frustrate the club’s search to replace DigitalBits on similar terms,” wrote S&P analysts in the statement. “The current economic environment would also demand full due diligence and solid understanding of the credit quality of potential sponsorship partners.”

That could be a worry for holders of Inter Media and Communication’s €415 million in high-yield bonds, which pay an annual interest payment of 6.75% and are due in 2027. The football club already had to seek a €275 million emergency credit line in 2021, to weather the gap in its finances experienced during the pandemic when stadiums remained empty. 

FC Internazionale Chairman Steven Zhang has recently denied media reports that the club is for sale. Suning Holdings Group Co. is the team’s majority owner.

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(Bloomberg) — US crypto miners would be forced to disclose greenhouse gas emissions under a new bill, adding pressure to a fast-growing industry criticized for its heavy toll on the environment and power grid. 

The legislation, introduced by Democratic Senator Edward Markey, would require crypto miners using more than 5 megawatts of electricity — a threshold that most Bitcoin mining companies would pass —  to report emissions and the source of power, according to a copy of the bill shared with Bloomberg News. The US Environmental Protection Agency would conduct a study on the impact of existing and planned digital mining operations — including the level of stress on the energy grid and fossil fuel usage — and offer any measures state regulators can take to reduce their energy demand. 

Mining digital currency is energy intensive, with companies including Riot Blockchain Inc. and Argo Blockchain often running thousands of specialized computers around the clock, solving equations that award crypto-assets. About 60% of global currency mining is fueled by coal and natural gas, as opposed to renewable energy sources, according to data from Cambridge University’s Centre for Alternative Finance. US mining operations produce the equivalent greenhouse gas emissions of 7 million cars on the road for a year, according to a statement from Markey.  

After China banned crypto mining last year, US operators raced to set up shop, now accounting for more than one-third of global Bitcoin mining operations, skyrocketing from just 3.5% in 2020. They gravitated to Texas for its business-friendly policies and cheap power, but the explosion of interest has raised concerns that the surge of new electricity demand will strain a power grid already plagued by widespread blackouts last year.  

“Ensuring crypto mining companies report their greenhouse gas emissions is a necessary step toward holding them accountable and protecting communities across the country that rely on the grid,” Markey, chair of the Senate Environment and Public Works Subcommittee on Clean Air, Climate, and Nuclear Safety, said in a statement. 

Earlier this year, Markey signed onto a letter from Senator Elizabeth Warren, a fellow Democrat from Massachusetts, asking miners to disclose years of power consumption and emissions, but the responses were limited.  The new bill from Markey, co-sponsored by fellow Democrats Representative Jared Huffman and Senator Jeff Merkley and endorsed by several sustainability-focused groups including the Sierra Club, would appropriate $5 million in 2023. 

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(Bloomberg) — Amazon.com Inc. has launched a TikTok-style service that will let shoppers buy merchandise from a curated feed of photos and video. 

The world’s largest e-commerce company on Thursday said the new feature, called Inspire, will roll out to select US customers in early December and go national in the next few months. 

“In just a few taps, customers can discover new products or get inspiration on what to buy, all tailored to their interests, and then shop for those items on Amazon,” said Oliver Messenger, the director of Amazon Shopping.

Amazon, which has long used static product images and descriptions to create a uniform catalog, has been trying to make it easier for shoppers to discover products rather than simply search for specific items. Despite these efforts, most customers don’t linger on the sprawling online marketplace. More than one in four Amazon purchases take three minutes or less. 

So-called social commerce has long been popular in China but has been slow to catch on in the US. However, with TikTok making inroads in e-commerce, Amazon, Alphabet Inc.’s Google and Meta Platforms Inc.’s Facebook and Instagram have been adding social shopping features to their services — with mixed success.

Amazon’s new Inspire service, which will appear as a lightbulb-shaped icon on the app, will invite shoppers to select from more than 20 interests, including makeup, pets and gaming, which will then be used to tailor their feeds. Shoppers will be able to purchase merchandise posted by other customers, brands and influencers.

It’s not clear that Inspire will work. Amazon is known for introducing experimental features and quietly abandoning them if they fail to take off.

The Wall Street Journal reported the Inspire news earlier. 

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(Bloomberg) — A US bankruptcy judge declined to immediately approve Galaxy Digital’s deal to buy a Celsius Network subsidiary for $44 million, demanding more details about the structure of the sale. 

Judge Martin Glenn said he was “blindsided” by a provision in the sale documents that would transfer potential legal claims from Celsius to Galaxy. At a hearing Thursday, he asked Celsius lawyers to provide additional evidence about the value of the claims, which relate to hypothetical clawbacks tied to GK8, the crypto custody subsidiary being purchased.

Celsius bought GK8 a little more than one year ago for $115 million. Since then, crypto markets have crashed — the $44 million sale to Galaxy represents a more than 60% discount to the initial purchase price.  

Glenn is likely to approve the sale after receiving sworn statements and additional papers further explaining the transfer of so-called avoidance actions, he said later in the hearing. The potential legal claims at issue are limited in scope and have little if any value, a lawyer for Celsius creditors told Glenn. 

“I don’t see this as prolonging these issues for very long,” Glenn said. 

The sale calls for GK8 founders Lior Lamesh and Shahar Shamai, along with about 40 existing employees, to continue working for the company. GK8 is a blockchain security company that allows users to store crypto without the use of the internet, a lawyer for Celsius said in the hearing. 

The bankruptcy is Celsius Network LLC, 22-10964, US Bankruptcy Court for the Southern District of New York (Manhattan). 

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(Bloomberg) — Walt Disney Co. debuts the ad-supported version of its Disney+ streaming service Thursday with strict rules: No alcohol commercials, no political spots and no ads from competitors. 

The new service, which is priced at $8 a month, has signed up 100 sponsors across a wide swath of business, including finance, retail and automotive, Rita Ferro, Disney Media’s president of advertising, said in an interview. The company intentionally left some slots open to accommodate marketer interest after the product’s debut, she said. 

Although Disney’s position on some of the restrictions may change over time, the Burbank, California-based company will shut out rivals including Netflix Inc. and Amazon.com Inc.’s Prime Video to prioritize its own shows and films, Ferro said. 

“Our content is going to be the only thing you see on our platforms,” she said. 

The ad-supported version of Disney’s flagship streaming platform will have 4 minutes of commercials per hour or less, or about half the ad load of Hulu, its sister streaming service. It’s becoming available at a tough time for the media industry at large amid a pullback in ad spending and fears of an imminent recession. 

On Tuesday, shares of CBS owner Paramount Global fell 7% after Chief Executive Officer Bob Bakish said the company’s advertising sales this quarter will be “a bit below” the third quarter in a “challenging” market.

Industry Challenges

The comments echoed those of Jeff Shell, chief executive officer of Comcast Corp.’s NBCUniversal division, who said the advertising market is “definitely getting worse.” Last week, AMC Networks Inc. announced plans to fire 20% of its US staff, Warner Bros Discovery Inc.’s CNN division laid off employees, and NPR said it would “severely restrict” hiring after a sharp drop in sponsorship revenue.

So far, Disney has been less affected than peers by the wider downturn in ad spending and has benefited from a “flight to quality,” Ferro said.

“There’s no question that the marketplace is challenged, and there’s no question there are more challenging times to come,” Ferro said. “But we have not necessarily seen the slowdown that we have seen in the marketplace.”

With the debut of the ad-backed Disney+, the price of the commercial-free version is increasing by $3 to $11 a month. Achieving profitability in Disney’s direct-to-consumer division, which lost $1.5 billion last quarter mainly due to expenses at Disney+, is a priority for the company.

C-Suite Tumult

Disney shares fell by 13% on Nov. 9, the worst daily drop since 2001, after the company reported the loss. They were down 41% this year through the close Wednesday.

In response, Disney on Nov. 20 ousted Chief Executive Officer Bob Chapek and brought back longtime CEO Bob Iger. Iger told employees at the first town hall held after his return that the company will prioritize breaking even on its streaming initiatives over subscriber growth.  

As of last quarter, Disney had about 236 million subscribers across all of its online TV businesses, including Hulu and ESPN+. Chapek said at the time that losses had peaked in the direct-to-consumer division, which Disney expects to reach profitability in 2024. 

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(Bloomberg) — Stocks climbed as data showed some signs the labor market is cooling — one of the key factors Federal Reserve officials are watching to decide on whether they will be able to notch down their tightening campaign.

The rebound in the S&P 500 followed a five-day selloff that put the equity gauge on the cusp of an important technical indicator: its average price of the past 100 days. The tech-heavy Nasdaq 100 outperformed, led by gains in giants Apple Inc. and Amazon.com Inc. Treasuries also reversed course Thursday, with 10-year yields on the rise and approaching the 3.5% mark. Oil rallied amid an outage on a major US oil pipeline and optimism over China’s reopening.

Continuing US jobless claims rose to the highest since early February, suggesting that Americans who are losing their job are having more trouble finding a new one. Traders are now waiting Friday’s producer price index for November — one of the final pieces of data Fed policymakers will see before their Dec. 13-14 policy meeting. The PPI in October cooled more than expected.

“It’s interesting to see jobless claims rising slightly, but in all likelihood this won’t move the market needle too much,” said Mike Loewengart at Morgan Stanley Global Investment Office. “Investors will have a lot to digest these next few days as they get a clearer picture of where we stand in the fight against inflation before the Fed decision. The market is largely expecting the slowdown in rate hikes to begin next week, but whether the pivot will be enough to steer the economy into a soft landing remains the question.”

Read: Fed Gets a Win Deflating Asset Bubbles Without Financial Crash

Strategists from Morgan Stanley to JPMorgan Chase & Co. have warned investors against piling back into risk on hopes the Fed is getting close to pivoting to easier policy.

“Presumably if the Fed is pivoting this time around, it’s not for a good reason. It’s a deteriorating fundamental picture,” Joyce Chang, chair of global research at JPMorgan, told Bloomberg Television. “I mean, is that really a reason to be buying risk? I think it’s premature to say that there is a Fed pivot.”

Besides the 100-day moving average, the S&P 500 is trading near a key support at 3,900, a level that has provided the pivot point for reversals on multiple occasions this year.

As the equity market rebounded, the Cboe Volatility Index fell to around 23. Yet derivatives strategists at JPMorgan Chase & Co. say the VIX has further room to advance. 

They expect the fear gauge to average at 25 next year, and see the gauge trading above that level in the first half of the year amid elevated monetary-policy concern before subsiding below the line in the latter part of 2023 when the central bank is expected to pivot its stance.

Read: S&P Faces Bumpy Road After Sliding Below Key Level From October

Key events this week:

• US PPI, wholesale inventories, University of Michigan consumer sentiment, Friday.

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.9% as of 10:31 a.m. New York time
• The Nasdaq 100 rose 1.1%
• The Dow Jones Industrial Average rose 0.8%
• The Stoxx Europe 600 was little changed
• The MSCI World index rose 0.8%

Currencies

• The Bloomberg Dollar Spot Index fell 0.3%
• The euro rose 0.4% to $1.0544
• The British pound rose 0.3% to $1.2234
• The Japanese yen rose 0.2% to 136.39 per dollar

Cryptocurrencies

• Bitcoin rose 0.6% to $16,923.54
• Ether rose 1.4% to $1,248.98

Bonds

• The yield on 10-year Treasuries advanced four basis points to 3.46%
• Germany’s 10-year yield advanced three basis points to 1.81%
• Britain’s 10-year yield advanced two basis points to 3.07%

Commodities

• West Texas Intermediate crude rose 1.3% to $72.98 a barrel
• Gold futures rose 0.5% to $1,806.20 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Cecile Gutscher and Akshay Chinchalkar.

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — A group of Arco Platform Ltd. shareholders sent a letter to directors urging them to reject a deal to take the company private, according to a copy of the communication reviewed by Bloomberg News.

Arisaig Partners, Gavea Investimentos and Hix Capital, which say they represent a collective ownership stake of 13%, wrote that if Arco agrees to a proposed takeover by Dragoneer Investment Group and General Atlantic LLC, it would “represent a callous mistreatment of minority shareholders,” according to the letter. 

The group described the $11-a-share offer price as “unfavorable,” adding that the value is not “anywhere close to acceptable” based on Arco’s history as a public company, earnings momentum, recent volume-weighted market price and peers. 

Read more: Go-Private Bid from General Atlantic, Dragoneer Propels Arco 

Representatives for Arisaig, Gavea and Hix declined to comment. Arco didn’t respond to a request for comment. 

Shares in Sao Paulo-based Arco, a developer of educational software, were up 2.2% to $13.37 at 10:18 a.m. New York Thursday, a premium over the tabled take-private offer. It has a market capitalization of roughly $761 million. 

General Atlantic became an Arco shareholder in 2014 and four years later the Brazilian company went public in the US. The fund further boosted its investment last year through a private investment in public equity, or PIPE, with Dragoneer also participating in the transaction.

(Updates to say Arisaig declined to comment in fourth paragraph, adds stock move and context starting in fifth paragraph.)

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(Bloomberg) — Meta Platforms Inc. decided not to occupy part of its recently completed European headquarters in Dublin and will sublet some of the development.

“As part of the ongoing review of our sites globally, we have decided to sublet the final phase of the Ballsbridge campus,” a Meta spokesperson said by email on Thursday.

Facebook’s parent company signed a 25-year lease on Fibonacci Square, a 375,000-square-foot (34,800-square-meter) office in Dublin, in 2018. Meta has instructed its agent, Cushman & Wakefield Plc, to sublet newly developed blocks to other occupiers, according to a person familiar with the matter, who asked not to be identified because the matter is sensitive.

A representative for the real estate firm declined to comment.

The news follows the firm’s announcement last month that it’s slashing more than 11,000 jobs, the first major round of layoffs in the social-media company’s history. Meta is one of several big international tech companies that have their European headquarters in Ireland. Irish staff have also recently been cut at firms including Twitter Inc. and Stripe Inc. 

Read More: Ireland’s Financial Blind Spot Hit by Mass Tech Job Cuts

Meta said it remains “firmly committed to Ireland” and employees from its current Dublin base will move to the existing part of its new campus in early 2023. The development in the south of the city “will be the primary location of our International HQ,” the spokesperson said.

The Irish Times reported Meta’s decision to sublet part of the development earlier.

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(Bloomberg) — Targets of damning reports by short sellers and other critics of corporate performance can insist that Google cuts internet search links to the research — but only if they can show it’s wrong, according to the European Union’s top court.  

EU judges weighed in after two unidentified executives claimed they were hit by an online information campaign in 2015 unfairly criticizing the way they ran their business and depicting them living a lavish lifestyle including luxury cars, a helicopter and charter plane.

The EU Court of Justice in Luxembourg ruled on Thursday that search-engine operators “must dereference information” on the internet when the person making the request “proves that such information is manifestly inaccurate.” Judges said that while it’s up to the targets of online articles or pictures to demonstrate why the material is wrong, they don’t need to go through the courts to prove it.

The case is the latest test of the so-called right to be forgotten, following a 2014 EU court ruling that forces search engines to remove European links to websites that contain out of date or false information that could unfairly harm a person’s reputation. In Thursday’s case, Google had initially refused to sever the search links, saying it couldn’t judge whether the content in the disputed articles was wrong, as the complainants claimed.

Google and other search engine providers “cannot be required to play an active role in trying to find facts which are not substantiated by the request for dereferencing,” the court said.

According to court documents, the online reports at the center of the dispute “expressed critical opinions and doubts as to the reliability of the investment model of several companies” the complainants were linked to. 

One of the articles also featured four pictures of the people targeted, showing them “enjoying a life of externally financed luxury.”

Read More: Why Short Sellers Become Targets During Market Routs: QuickTake

While the ruling is unlikely to rein in short sellers, it adds to mounting global scrutiny of activities of some firms in the industry, which cash in when their research about the under-performance of a company sends stock prices tumbling. 

Google said it has worked hard to implement the right to be forgotten in the EU and “to strike a sensible balance between people’s rights of access to information and privacy.” The “links and thumbnails in question are not available via the web search and image search anymore; the content at issue has been offline for a long time.” 

The case is: C-460/20, Google (Déréférencement d’un contenu prétendument inexact).

(Updates with background on case starting in second paragraph)

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