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Asian markets drift as weak tech earnings dent recovery optimism

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Investors will be keeping a close watch on the release of US jobs figures
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Asian equities were mixed Friday as the optimism over a possible pause in Federal Reserve interest rate hikes again gave way to worries about the global economy as more than a year of monetary tightening kicks in.

Disappointing earnings from Wall Street titans Apple, Amazon and Alphabet — who together are worth almost $5 trillion — indicated higher borrowing costs and elevated inflation were weighing on consumer demand.

The readings came in towards the end of a week when the stocks rally that defined most of January hit the barriers as traders worried that the buying had been overdone and that there were plenty more bumps in the road for the economy.

Those concerns also overshadowed optimism about China’s reopening and recovery from nearly three years of zero-Covid policies that hammered business activity.

They also offset the positive mood created by an acknowledgement from the Fed that it was making progress in bringing inflation down from multi-decade highs, fuelling hopes it was nearing the end of its rate hike cycle.

Eyes are now turning to the release of US jobs data later on Friday, which will provide a clearer idea about the state of the world’s biggest economy.

“A softer payrolls data, so long as it does not fall off a cliff triggering a recessionary (backlash), could re-engage all the favourite trades of the year,” said SPI Asset Management’s Stephen Innes.

“Not least, it would provide the most critical evidence to date to suggest that the market’s rates pricing is more in line with reality than the Fed’s own more subtly hawkish higher for longer signalling.”

Wall Street’s three main indexes ended broadly higher, with the Nasdaq piling on more than three percent thanks to forecast-beating results from Facebook owner Meta.

However, the after-hours reports from Apple, Amazon and Google’s parent firm Alphabet brought investors back down to earth.

Apple said sales dropped more than expected in October-December, Amazon’s revenue was hit by weak consumer demand and Alphabet results fell short of estimates.

“The war in Ukraine, inflationary pressures, economic uncertainty and macroeconomic headwinds kept the consumer sentiment weak in 2022 while smartphone users reduced the frequency of their purchases,” Harmeet Singh Walia, of Counterpoint Research, said in a report on Apple.

Hong Kong led losses in Asian trade, losing close to two percent, and Shanghai was off more than one percent. Taipei was also down, while Singapore, Seoul and Wellington were flat.

Still, Tokyo, Sydney, Manila and Jakarta rose.

Futures in the Nasdaq and S&P 500 were both deep in the red.

On currency markets, the euro and pound lost further ground after weakening Thursday despite the European Central Bank and the Bank of England hiking interest rates more than the Fed.

Crude prices ticked slightly higher a day after suffering more selling pressure on concerns about the economic outlook and demand, with US stockpiles rising last week more than expected.

“Oil’s in a bit of a limbo as the market awaits tangible signs of China’s oil demand recovery,” Vandana Hari, of Vanda Insights, said.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: UP 0.4 percent at 27,518.75 (break)

Hong Kong – Hang Seng Index: DOWN 1.9 percent at 21,547.50

Shanghai – Composite: DOWN 1.2 percent at 3,245.90

Dollar/yen: UP at 128.67 yen from 128.62 yen on Thursday

Euro/dollar: DOWN at $1.0898 from $1.0918

Pound/dollar: DOWN at $1.2218 from $1.2225

Euro/pound: DOWN at 89.18 pence from 89.21 pence

West Texas Intermediate: UP 0.1 percent at $75.97 per barrel

Brent North Sea crude: UP 0.2 percent at $82.29 per barrel

New York – Dow: DOWN 0.1 percent at 34,053.94 (close)

London – FTSE 100: UP 0.8 percent at 7,820.16 (close)

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TikTok suspends rewards programme after EU probe

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TikTok Lite arrived in France and Spain in March allowing users aged 18 and over to earn points that can be exchanged for goods
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TikTok on Wednesday announced the suspension of a feature in its spinoff TikTok Lite app in France and Spain that rewards users for watching and liking videos, after the European Union launched a probe.

The popular video-sharing social media platform, owned by Chinese company ByteDance, said the suspension would remain  “while we address the concerns that they have raised”.

The European Commission’s top tech enforcer, Thierry Breton, said the EU investigation would continue, stating: “Our children are not guinea pigs for social media.”

TikTok Lite arrived in France and Spain — the only EU countries where it is available — in March. Users aged 18 and over can earn points to exchange for goods like vouchers or gift cards through the app’s rewards programme.

TikTok Lite is a smaller version of the popular TikTok app, taking up less memory in a smartphone and made to perform over slower internet connections.

The European Commission on Monday announced an investigation into TikTok Lite, and threatened to have the rewards programme suspended, raising concerns about the risk to users’ mental health.

The commission demanded TikTok provide more information by a Wednesday deadline, along with any defence against the threatened suspension.

Breton said in a statement that “our cases against TikTok on the risk of addictiveness of the platform continue”.

“We suspect that this (rewards) feature could generate addiction and that TikTok did not do a diligent risk assessment and take effective mitigation measures prior to its launch,” he said.

The probe is the EU’s second against TikTok under a sweeping new law, the Digital Services Act (DSA), that requires digital firms operating in the 27 nations to effectively police online content.

In February, the commission opened a formal probe into TikTok over alleged violations of its obligations to protect minors online.

– TikTok squeezed –

TikTok is also under pressure across the Atlantic.

A bill to ban TikTok cleared the US Congress after the Senate on Tuesday approved legislation requiring TikTok to be divested from ByteDance.

TikTok’s CEO, Shou Zi Chew, said the company would fight the law — which he said amounted to a ban — in US courts.

The European Commission has refused to comment on the United States’ move. Instead it has focused on the EU’s legal arsenal to bring big tech into line with its rules.

The move against the TikTok Lite rewards scheme was the latest instance of the EU flexing that legal muscle against online platforms.

It is also investigating tech billionaire Elon Musk’s X, the former Twitter, over alleged illegal content.

TikTok Lite users can win rewards if they log in daily for 10 days, if they spend time watching videos (with an upper limit of 60 to 85 minutes per day), and if they undertake certain actions, such as liking videos and following content creators.

TikTok is among 22 “very large” digital platforms, including Amazon, Facebook, Instagram and YouTube, that must comply with stricter rules under the DSA since August last year.

The law gives the EU the power to hit companies with heavy fines as high as six percent of a digital firm’s global annual revenues. Repeat offenders can see their platforms blocked in the EU.

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In Brazil, hopes to use AI to save wildlife from roadkill fate

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Some 475 million vertebrate animals die on Brazilian roads every year
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In Brazil, where about 16 wild animals become roadkill every second, a computer scientist has come up with a futuristic solution to this everyday problem: using AI to alert drivers to their presence.

Direct strikes on the vast South American country’s extensive road network are the top threat to numerous species, forced to live in ever-closer proximity with humans.

According to the Brazilian Center for Road Ecology (CBEE), some 475 million vertebrate animals die on the road every year — mostly smaller species such as capybaras, armadillos and possums.

“It is the biggest direct impact on wildlife today in Brazil,” CBEE coordinator Alex Bager told AFP.

Shocked by the carnage in the world’s most biodiverse country, computer science student Gabriel Souto Ferrante sprung into action.

The 25-year-old started by identifying the five medium- and large-sized species most likely to fall victim to traffic accidents: the puma, the giant anteater, the tapir, the maned wolf and the jaguarundi, a type of wild cat.

Souto, who is pursuing a master’s degree at the University of Sao Paulo (USP), then created a database with thousands of images of these animals, and trained an AI model to recognize them in real time.

Numerous tests followed, and were successful, according to the results of his efforts recently published in the journal Scientific Reports.

Souto collaborated with the USP Institute of Mathematical and Computer Sciences.

For the project to become a reality, Souto said scientists would need “support from the companies that manage the roads,” including access to traffic cameras and “edge computing” devices — hardware that can relay a real-time warning to drivers like some navigation apps do.

There would also need to be input from the road concession companies, “to remove the animal or capture it,” he told AFP.

It is hoped the technology, by reducing wildlife strikes, will also save human lives.

– ‘More roads, more vehicles’- 

Bager said a variety of other strategies to stop the bloodshed on Brazilian roads have failed.

Signage warning drivers to be on the lookout for crossing animals have little influence, he told AFP, leading to a mere three-percent reduction in speed on average.

There are also so-called fauna bridges and tunnels meant to get animals safely from one side of the road to the other, and fences to keep them in — all insufficient to deal with the scope of the problem, according to Bager.

In 2014, he created an app called Urubu with other ecologists, to which thousands of users contributed information, allowing for the identification of roadkill hotspots.

The project helped to create public awareness and even inspired a bill on safe animal crossing and circulation, which is awaiting a vote in Congress. 

A lack of money saw the app being shut down last year, but Bager is intent on having it reactivated.

“We have more and more roads, more vehicles and a number of roadkill animals that likely continues to grow,” he said.

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Honda to build major EV plant in Canada: govt source

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Honda hopes to sell only zero-emission vehicles by 2040, with a goal of going carbon-neutral in its own operations by 2050
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Japanese auto giant Honda will open an electric vehicle plant in eastern Canada, a Canadian government source familiar with the multibillion-dollar project told AFP on Monday.

The federal government as well as the province of Ontario, where the plant will be built, will both provide some financial incentives for the deal, according to the source, who spoke on condition of anonymity.

The official announcement is due Thursday, though Ontario premier Doug Ford hinted at the deal on Monday.

“This week, we’ve landed a new deal. It will be the largest deal in Canadian history. It’ll be double the size of Volkswagen,” he said, referring to a battery plant announced last year, for which the German automaker pledged Can$7 billion (US$5 billion) in investment.

Canada in recent years has been positioning itself as an attractive destination for electric vehicle investment, touting tax incentives, renewable energy access and its rare mineral deposits.

The Honda plant, to be built an hour outside Toronto, in Alliston, will also produce electric-vehicle batteries, joining existing Volkswagen and Stellantis battery plants.

In January, when news of the deal first bubbled up in the Japanese press, the Nikkei newspaper estimated it would be worth Can$14 billion — numbers backed up by Canadian officials recently.

In the federal budget announced last week, Prime Minister Justin Trudeau’s government introduced a new business tax credit, granting companies a 10 percent rebate on construction costs for new buildings used in key segments of the electric vehicle supply chain.

Canada’s strategy follows that of the neighboring United States, whose Inflation Reduction Act has provided a host of incentives for green industry.

Honda hopes to sell only zero-emission vehicles by 2040, with a goal of going carbon-neutral in its own operations by 2050.

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