Good morning. Here's what happened overnight and what you need to know today.
1.
Ore over: Rio Tinto has walked away from talks to acquire Glencore, ending a proposed USD260 billion ($374.5 billion) merger that would have created the world’s largest mining group. The decision followed more than 18 months of on-and-off discussions, with the latest round announced in early January and ending ahead of a 5 February deadline to make a formal offer. Rio said in a statement it had “determined that it could not reach an agreement that would deliver value to its shareholders.” Glencore said the proposal “significantly undervalued” its business, including its copper assets, and opposed Rio’s plan to retain both the chair and chief executive roles. The proposed merger would have bolstered Rio’s copper portfolio amid soaring demand driven by electrification, AI and the energy transition. A deal would also have helped Rio address structural issues linked to its dual-listed status and foreign ownership limits that constrain capital returns. Under UK takeover rules, it cannot make another approach for six months unless certain conditions are met. Glencore shares fell 7%, while Rio shares dropped 2.6%.(Capital Brief)(Rio statement)(Glencore statement)(Bloomberg)
2.
Tech tantrum: Wall Street slid overnight as renewed pressure on the AI trade, a downbeat forecast from Qualcomm and Alphabet’s plan to double capital spending fuelled the tech and crypto selloff. Markets remained under pressure for a third consecutive session, compounded by weak US labour data, as job openings fell to a five-year low and January marked the worst month for planned layoffs since 2009, according to Challenger, Gray & Christmas. Alphabet fell almost 8% before recovering to be 2.2% lower in the afternoon. Yesterday, it said it would spend up to USD185 billion ($265.6 billion) this year to strengthen its AI position, while Qualcomm shares were 7.6% lower in afternoon trading after guiding second-quarter revenue and profit below estimates due to a memory shortage and rising costs. The Nasdaq hit its lowest levels in more than two months, and the S&P 500 software and services index declined for the seventh session. Bitcoin fell 8.6% to USD66,364, falling below the USD70,000 mark and giving up gains since Trump’s election. Shares in Strategy Inc, the bitcoin-accumulating company were down 15% at the time of writing. Elsewhere, Silver plunged 14% to around USD74 a troy ounce, reversing this week’s brief rebound, Estée Lauder slumped more than 20% after forecasting annual results below estimates, while Peloton Interactive shares were 27% lower on a weaker-than-expected third-quarter revenue outlook. (Bloomberg)(WSJ)(FT)(Reuters)
