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The World
After $1.5 trillion wipeout, U.S. stocks poised to slide further: Investors dumped shares of Walmart, Target, and other big chains — notching some of the biggest declines since the market crash of 1987 — amid fears that the companies wouldn’t be able to pass along higher prices to consumers. It has also stoked concerns through financial markets about the resilience of companies that collectively employ millions of workers in the U.S. and abroad. The declines were part of a broad wave of selling that erased 3.6%, or more than 1,100 points, from the Dow and 4% from the S&P 500 index. (Bloomberg, Wall Street Journal)
China is seeking to replenish its strategic crude stockpiles with cheap Russian oil, a sign Beijing is strengthening its energy ties with Moscow just as Europe works toward banning imports due to the war in Ukraine. Beijing is in discussions with Moscow to buy additional supplies. Crude would be used to fill China’s strategic petroleum reserves. (Bloomberg)
Google has moved the bulk of its employees out of Russia, ending the company’s commercial presence in the country for the near future. Most of Google’s Russian employees opted to leave the country and continue to work for Google outside Russia, with a large number ending up in Dubai, where Google has a big office. Some employees opted to stay in Russia and leave the company, and soon Google will have no more employees in Russia. (Wall Street Journal)
Britain served notice that it may unilaterally scrap some of the rules that govern trade with Northern Ireland, a highly political move that sets Britain on a collision course with the EU, 18 months after a trade deal that was meant to have doused the last fires of Brexit. Under legislation outlined by the foreign secretary, Liz Truss, the British government could discard regulations that were painstakingly negotiated with Brussels, including border checks on goods shipped from mainland Britain to Northern Ireland. The announcement drew a quick and sharp retort from the EU, which said that if Britain went ahead with its plans, it would respond “with all measures at its disposal,” a vague but ominous statement that could include imposing tariffs on British goods shipped across the English Channel. (New York Times)
5 challenges awaiting Biden on his Asia tour: 1) Seoul and Tokyo’s bilateral bitterness; 2) Countering North Korea’s nuclear threat; 3) South Korea and the Quad; 4) Selling the Indo-Pacific Economic Framework; 5) Deepening India’s Quad involvement. (Politico)
Kim Jong Un hinted at leadership purges due to COVID outbreak failures. North Korea records over 230,000 new ‘fever’ cases and six deaths as Kim calls for building new treatment centers. (NK News)
President Biden invoked the Defense Production Act to address a nationwide shortage of baby formula to ramp up domestic manufacturing rapidly as parents are scrambling and store shelves are running bare, adding that the administration will simultaneously launch an operation to ensure faster flights of imports using Defense Department air cargo contracts. (Washington Post)
Gasoline pump prices have risen above $4 a gallon in all states in the US for the first time ever as the last holdouts -- Kansas, Oklahoma and Georgia -- saw prices rise overnight. In California, the most expensive state, prices are averaging $6.021 a gallon, a fresh record, while five other states are above $5 a gallon. (Bloomberg)
Federal health officials warned that a third of Americans live in areas where the threat of Covid-19 is now so high that they should consider wearing a mask in indoor public settings. They cited new data showing a substantial jump in both the spread of the coronavirus and hospitalizations over the past week. (New York Times)
The New York Times Co. delayed its plan to have employees return to the office a few days a week starting in June due to a Covid spike in New York City, the latest company to make adjustments in the face of a rapid surge in cases. The company hasn’t set a new return date, according to the memo, which described the reversal as a “brief delay” to its plans for a wider return. (Wall Street Journal)
Harvard economics Professor Claudia Goldin reports that women largely stayed in the labor force in the first year and a half of the pandemic despite health concerns, heightened demands on their time, and increased care commitments. Goldin’s analysis, which uses data from the American Time Use Survey, the Current Population Survey, and other sources, reveals that education, not gender, was the main distinction between people who stayed in their jobs and those who did not amid the economic shockwaves of the pandemic. (Harvard Gazette, NBER)
Economy
Bidding wars show signs of cooling as mortgage rates bite: After two years of a pandemic-driven buying frenzy that sent home values soaring, the competition for listings is showing signs of cooling off as mortgage rates hit the highest level since 2009. 61% of home offers faced bidding wars in April, down from 63% a month earlier and 67% in the same period of 2021. (Bloomberg)
Airbnbs outnumber NYC apartments in hot housing market. (Bloomberg)
Massachusetts home prices hit record highs in April. (WBUR)
UK inflation soared to 9% in April – its highest level for more than 40 years – as the rising cost of gas and electricity pushed household energy bills to record levels. The escalating cost of food and transport also contributed to the rising cost of living, deepening the crisis affecting millions of low- and middle-income families. (The Guardian)
Sam Bankman-Fried’s FTX cryptocurrency exchange signaled its determination to expand “across all asset classes” as it launched a US equities trading service that will accept payments in some stablecoins as well as US dollars. The US arm of FTX set the stage for the move by quietly buying a regulated broker-dealer last year. Starting today, “select US customers” chosen from a wait-list set up in February will be able to use FTX US to buy stocks and exchange traded funds, as well as digital assets.
Robinhood is working on a second crypto wallet, which will give users sole custody of their private keys, coming in beta this summer and launching later in 2022. (The Verge)
China’s lockdowns have hammered consumer spending. The strategy has muted stimulus efforts and slowed the transition from an export and construction-led economy. Meanwhile, China’s new home prices in April fell for the first time month-on-month since December. (Financial Times, Reuters)
Technology
Musk-Twitter questions and (some) answers: There are signs Elon Musk may be getting cold feet a few weeks after he agreed to buy Twitter Inc. for $44 billion. Can either side walk away at any time? Not easily. Can Mr. Musk just pay Twitter the $1 billion breakup fee to get out of the deal? Not necessarily. What will Twitter do? Twitter’s board feels strongly that the two sides had an agreement that remains in effect and is the best option for shareholders. “We intend to close the transaction and enforce the merger agreement,” it said. What is going to happen? It is too early to say. The deal could still happen, and could close as soon as this summer if both sides keep moving forward. Another possible outcome is that the two sides negotiate a settlement. (Wall Street Journal)
The US is about to vault into a new era of supercomputing, with a once in a decade leap forward in processing power that will have a big effect on fields ranging from climate change research to nuclear weapons testing. But the national swagger usually prompted by such breakthroughs is likely to be muted. China passed this milestone first and is already well on the way to building an entire generation of advanced supercomputers beyond anything yet in use elsewhere. (Financial Times)
TikTok’s new ad product gives creators a chance to partner with marketers on branded content. (TechCrunch)
Energy storage important to creating affordable, reliable, deeply decarbonized electricity systems: In deeply decarbonized energy systems utilizing high penetrations of variable renewable energy (VRE), energy storage is needed to keep the lights on and the electricity flowing when the sun isn’t shining and the wind isn’t blowing — when generation from these VRE resources is low or demand is high. The MIT Energy Initiative’s Future of Energy Storage study makes clear the need for energy storage and explores pathways using VRE resources and storage to reach decarbonized electricity systems efficiently by 2050. (MIT News)
Smart Links
The U.S. men's and women's soccer teams will be paid equally under a new deal. (NPR)
Walking or biking to work could make you more productive. (Bloomberg Businessweek)
The baby formula shortage has birthed a shady online marketplace. (MIT Technology Review)
French dijon mustard supply hit by climate and rising costs. (The Guardian)
Mercedes axes cheaper models in bid for luxury brand status. (Financial Times)