NEW YORK, Dec 11 — The euro rose yesterday as the European Central Bank (ECB) rolled out yet more stimulus measures to lift the currency bloc out of a double-dip recession, while the S&P 500 ended slightly lower following an increase in weekly US jobless claims.
Energy shares were sharply higher, with oil prices climbing nearly 3 per cent and Brent rising above US$50 (RM203.08) a barrel for the first time since early March, fuelled by hopes of a faster demand recovery.
The ECB expanded its debt purchase scheme and agreed to provide banks with even more ultra-cheap liquidity as long as they keep passing the cash onto companies. It said it is monitoring the euro’s exchange rate with regard to its possible implications for the medium-term inflation outlook.
Strategists said the level of the measures may ensure that current monetary accommodation will be extended well into 2022.
Sterling weakened as investors became more cautious about the risk of a no-deal Brexit.
The euro was up 0.49 per cent to US$1.214, while sterling was last trading at US$1.3295, down 0.75 per cent on the day.
On Wall Street, the S&P 500 and Dow ended lower as the jump in jobless claims pointed to a stalling labour market recovery, though focus remained on stimulus talks.
A US Senate vote on a stopgap measure to keep the government running could slip to the Friday deadline, as a top Democrat suggested wrangling over a spending package and coronavirus aid could drag on through Christmas.
“We are in a bit of a trough, we’ve hit a valley right now and it’s all based on accelerating through this,” said Phil Blancato, CEO of Ladenburg Thalmann Asset Management in New York.
“We need that announcement, without that announcement we are going to have volatility through the end of the year, without a doubt.”
The Dow Jones Industrial Average fell 69.55 points, or 0.23 per cent, to 29,999.26, the S&P 500 lost 4.72 points, or 0.13 per cent, to 3,668.1 and the Nasdaq Composite added 66.86 points, or 0.54 per cent, to 12,405.81.
The pan-European STOXX 600 index lost 0.44 per cent and MSCI’s gauge of stocks across the globe gained 0.03 per cent.
In the bond market, strong demand for the US$24 billion in 30-year US Treasury bonds on auction drove longer-dated yields lower and the yield curve flatter.
The 30-year yield fell to session lows after the auction and was last down 5.3 basis points to 1.636 per cent. The benchmark 10-year yield fell 3.3 basis points to 0.908 per cent.
Brent crude rose US$1.39, or 2.8 per cent, to settle at US$50.25 a barrel, gaining for a third day. US West Texas Intermediate (WTI) crude gained US$1.26, or 2.8 per cent, to settle at US$46.78.
Spot gold prices were slightly lower. (US$1 = 0.8255 euros)
(Reporting by Caroline Valetkevitch; additional reporting by Karen Brettell in New York, Shriya Ramakrishnan in Bengaluru and Marc Jones in London; Editing by Dan Grebler, Nick Zieminski and David Gregorio)
UPDATE 3-Airbnb valuation surges past US$100 bln in biggest US IPO of 2020 (Adds comments by Airbnb CEO, updates with closing share price)
By Noor Zainab Hussain and Joshua Franklin
Dec 10 (Reuters) — Shares of Airbnb Inc more than doubled in their stock market debut yesterday, valuing the home rental firm at just over US$100 billion in the biggest US initial public offering (IPO) of 2020 and capping a bumper year in which investors flocked to tech stocks.
Airbnb opened at US$146 on the Nasdaq, far above the IPO price of US$68 per share that raised US$3.5 billion for the company. The stock hit a high of US$165 and closed at US$144.71.
The IPO is the culmination of a stunning recovery in Airbnb’s fortunes after the firm’s business was heavily damaged by the Covid-19 pandemic earlier this year.
But as lockdowns eased, more travellers opted to book homes instead of hotels, helping Airbnb post a surprise profit for the third quarter. The San Francisco-based firm also gained from increased interest in renting homes away from major cities.
“I don’t think this summer too many people expected to see an Airbnb IPO this year,” Airbnb Chief Executive Brian Chesky told Reuters in an interview.
“We were planning on going public, we put our IPO on hold and this has been the most unbelievable journey. It’s been quite a comeback for our hosts and for what I hope will be travel,” added Chesky, whose Airbnb stake is now worth around US$11 billion.
Founded in 2008 as a website to take bookings for rooms during conferences, Airbnb’s listing was one of the most anticipated US IPOs of 2020, which has already been a record year for stock market listings.
Record label Warner Music Group, data analytics firm Palantir Technologies and data warehouse company Snowflake Inc have all gone public in the past few months.
At the start of trading on the Nasdaq, Airbnb had a market capitalisation of US$86.5 billion, eclipsing that of online travel agency Booking Holdings Inc and hotel chain Marriott International Inc
Including securities such as options and restricted stock units, Airbnb’s fully diluted valuation came to US$100.7 billion, more than five times the US$18 billion Airbnb was valued at in a private fundraising round in April at the outset of the pandemic. Airbnb’s worth was pegged at US$31 billion in its last pre-Covid-19 private fundraising in 2017.
The eye-popping rise in Airbnb’s stock on its debut comes just a day after the share price of food delivery company DoorDash Inc doubled in their first day of trading.
Such large first-day trading gains are likely to fuel criticism from some venture capital investors, including Benchmark’s Bill Gurley, who argue investment banks underprice IPOs so their investor clients can score large gains when the stock starts trading. Such advocates have pushed for companies to consider listing shares through a direct listing, in which bankers have little influence on the price at which stock is sold.
Chesky said Airbnb would focus on the things that were within the company’s control.
“At this point the price of stock is not something we control. I’ve encouraged our employees to focus on things they can control,” Chesky said, speaking before the stock had started trading. — Reuters
