• Market Loop
  • Posts
  • Business and finance update 20th January 2025

Business and finance update 20th January 2025

FTSE hits record

Good morning. Today we're talking about the FTSE’s new record, TikTok’s US ban and Meta’s latest layoffs.

Big Stories

FTSE hits record

The FTSE 100 index hit a record high on Friday, closing at 8,505.69, surpassing a level last reached in May. The weakening pound, currently trading below $1.22, has significantly boosted the index, as many of its constituents are multinational companies with significant overseas earnings. This currency depreciation makes their sterling-priced shares more attractive to foreign investors, driving up demand and ultimately pushing the index higher. Furthermore, market expectations of potential interest rate cuts in the coming year have fuelled investor optimism. Lower interest rates typically stimulate economic activity and reduce borrowing costs for businesses, factors that can positively impact corporate earnings. Sector-wise, mining companies and housebuilders have been significant contributors to the index's recent gains. Strong commodity prices have benefited mining giants like Antofagasta, Glencore and Anglo American. Meanwhile, housebuilders such as Persimmon, Taylor Wimpey and Barratt Redrow have seen their shares rise on the back of robust forward order books and the prospect of a more favorable interest rate environment.

Time up for TikTok

TikTok briefly stopped working for its 170m US users over the weekend following the enactment of a federal ban of the app. However services were resumed after incoming President Donald Trump promised to give TikTok at least a temporary reprieve. Trump, who takes office today, has said he would “save” the app and is considering an executive order that would buy time to work out a plan for TikTok. The popular social media app was banned over concerns about its parent company ByteDance links to the Chinese government. It was given until 19 January to be sold to an approved US buyer to avert the ban. The US ban on TikTok has raised concerns about potential global repercussions. Analysts suggest that allied countries may follow suit, mirroring similar bans on Chinese and Russian tech companies implemented on national security grounds. The fate of TikTok in the US will likely set a precedent for its future in other countries, with global implications for the tech industry and international relations.

Meta’s ‘intense year’

Meta announced plans to lay off 5% of its 72,000 strong workforce in what it said would be “an intense year”. CEO Mark Zuckerberg stated that the company will be "moving out low performers faster" as part of an effort to increase efficiency and improve performance standards. Meta last laid off employees in October after cutting 21,000 workers between 2022 and 2023. The announcement comes amidst a period of significant change at Meta, including a shift in content moderation policies, the appointment of a prominent Republican figure to a key leadership role, and the relocation of its US content moderation team to Texas. These moves have sparked debate and raised concerns about the company's evolving approach to content moderation and its overall direction.

Elsewhere...

Poor numbers: Shop sales in the UK unexpectedly fell in the run up to Christmas due to a "very poor month" for food being sold in supermarkets, adding to concerns over the health of the UK economy.

Cutting back: BP has announced it is cutting 4,700 jobs from its global workforce.

Loop Likes

Number of the Day

$200 billion

The estimated losses of the Los Angeles fires, they are forecast to be costliest blazes in US history.

Not a subscriber? Sign up for free

Want to reach an audience of UK business leaders, young professionals and 2,200+ other smart, ambitious people? Reply to this email and we'll be in touch.