| Want the lowdown on what's moving European markets in your inbox every morning? Sign up here. Good morning. It's decision time on the European Union recovery fund, Russia is accused of hacking Covid-19 research centers and Netflix Inc.'s shares tumbled after earnings. Here's what's moving markets. Decision Time European Union leaders are meeting in-person this morning for the first time since the beginning of lockdowns, to thrash out a deal for a 750 billion-euro recovery fund. Dutch Prime Minister Mark Rutte, who's been leading the criticism of the plan on the table, said this week he's "somber" about the prospects for the weekend talks while Germany's Angela Merkel and French President Emmanuel Macron -- who helped trigger the market rally with their proposal in May -- are talking about a deal by the end of the month rather than the start of next week. Europe's stocks and common currency have gained since the fund was first proposed. This rally now hangs in the balance. Cozy Bear There was drama Thursday afternoon as Britain accused Russia of hacking international research centers that are working on a potential Covid-19 vaccine, with the claims subsequently backed up by statements from security agencies in the U.S. and Canada. It remains unclear whether the facilities have been damaged or if the vaccine programs have been set back as a result, though officials warned that the attacks are ongoing. A Kremlin spokesman denied Russia's involvement, while the boss of the country's sovereign wealth fund called them an attempt to "tarnish the reputation" of its vaccine efforts. Here's what we know about the hacking group also known as "Cozy Bear." Netflix Slides Netflix Inc.'s disappointing subscriber forecast sent its shares plunging as much as 15% in after hours trading. The streaming giant expects to sign up 2.5 million new subscribers in the third quarter, compared with the more than 5 million expected by Wall Street. That marks a slowdown from roaring growth in the first half of the year, when lockdowns sent consumers scrambling to sign up for the service and binge on shows like Ozark and Tiger King. The group also named Ted Sarandos, the longtime head of its Hollywood operations, to be co-chief executive, perhaps symbolizing its transformation from a technology company into the world's most valuable movie and TV firm. Siri in Trouble In a week of European clashes with FAANG tech companies over taxes and privacy, Competition Commissioner Margrethe Vestager launched a probe into antitrust risks surrounding voice assistants and so-called internet-of-things devices. Tools such as Amazon.com Inc.'s Alexa, Apple Inc.'s Siri or Google's assistant are at "the center of it all," Vestager said on Thursday, warning that the systems could steer consumers to a narrower set of buying options. Vestager's probe is likely to examine issues such as Siri's preference for using Apple Music rather than Spotify Technology SA's service, and Amazon could be questioned on why Alexa won't let users change their default grocery delivery provider to a rival. A preliminary report on the findings isn't due until spring. Coming Up… Today's corporate earnings slate has a distinctly Nordic look to it, with lender Danske Bank A/S, elevator-maker Kone Oyj and chemicals firm Yara International ASA all scheduled to provide updates. Nordea Bank Abp earlier set aside much more to cover potential loan losses than expected, while telecommunications group Ericsson AB's quarterly net sales topped estimates. In Germany, Daimler AG said a late-quarter recovery in demand spared the Mercedes-Benz maker from losing as much money as analysts were expecting. Elsewhere, Bank of England Governor Andrew Bailey speaks on a Citizens' Panel online forum and data comes from the U.S., in the form of housing starts and the University of Michigan consumer sentiment index. European stock futures are pointing marginally higher after mixed trading in Asia. What We've Been Reading This is what's caught our eye over the past 24 hours. And finally, here's what Cormac Mullen is interested in this morning Proud-as-punch tech shareholders aren't the only ones who can boast of record highs. The iShares TIPS ETF -- a fund tracking inflation-protected U.S. government bonds -- closed at its highest ever Thursday. This comes as the yield on 10-year Treasury Inflation-Protected Securities trades around its lowest since December 2012, thanks to a combination of investors rushing to defend themselves against a potential return of price pressures that may follow the coronavirus and the impact of unprecedented monetary stimulus. But while U.S. breakevens -- measures of inflation expectations -- have been on the rise since March, they remain well below pre-pandemic levels. That suggests markets still don't see an inflation spike as imminent. And mixed economic data from the U.S. and China this week has underscored the long road ahead to a full global recovery. Tech shares aren't the only securities that may have gotten ahead of themselves. Cormac Mullen is a cross-asset reporter and editor for Bloomberg News in Tokyo. Like Bloomberg's Five Things? Subscribe for unlimited access to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. |
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