Know someone who would like this newsletter? Forward it to them.
The World
Davos:
FT: IMF signals upgrade to forecasts as optimism spreads at Davos: Business leaders and top government officials have expressed optimism about the global economy as China drops coronavirus controls, the US embarks on a green investment boom and western Europe adjusts to the impact of Russia’s war in Ukraine. Gita Gopinath, deputy managing director of the IMF, signaled that the fund would upgrade its economic forecasts. Instead of predicting a “tougher” 2023, she now expected an “improvement” in the second half of the year and into 2024. (Financial Times)
WSJ: At Davos, Mood Is Somber as Many CEOs Question Economic Outlook: Business leaders at the World Economic Forum also see signs of hope: ‘There are all kinds of shoes that could have dropped’. (Wall Street Journal)
India will become the world’s most populous country in 2023: The UN guesses that India’s population will surpass that of China on April 14th. India’s population on the following day is projected to be 1,425,775,850. The crown itself has little value, but it is a signal of things that matter. That India does not have a permanent seat on the un Security Council while China does will come to seem more anomalous. Although China’s economy is nearly six times larger, India’s growing population will help it catch up. India is expected to provide more than a sixth of the increase of the world’s population of working age (15-64) between now and 2050. (The Economist)
The European Union pushed forward with a major clean tech industrial plan which not only should keep the continent in the vanguard of plotting a greener future but also guarantee its economic survival as it faces challenges from China and the United States. European Commission President Ursula von der Leyen presented the outlines for her “Green Deal Industrial Plan” that will make it much easier to push through subsidies for green industries and pool EU-wide projects that are boosted with major funding as the EU pursues the goal of being climate neutral by 2050. (Associated Press)
France braced for ‘black Thursday’ as millions strike over retirement age plan: Most trains will be cancelled in France on Thursday, with flights also affected and Paris' subway heavily disrupted, as part of a nationwide strike against the government's plan to make people work longer before they can retire. Opinion polls show a vast majority of French oppose the planned reform, which would see the retirement age pushed from 62 to 64, and Thursday will be a test of whether this can transform into a major headache for the government. (Reuters)
FTC’s plan to ban noncompete clauses could prompt employers to use alternative tools. While a full or partial ban could expand the pool of potential hires, it also would weaken a tool that employers have come to rely on to retain talent, and to protect trade secrets and other proprietary information, lawyers say. More companies likely would turn to a patchwork of alternative mechanisms to keep people from leaving and taking valuable information with them, including nondisclosure agreements and employment contracts that reward longevity. (Wall Street Journal)
Flu appears to have peaked already: This year’s flu season got off to an early and roaring start in the autumn, taking off in the Southeast and South Central part of the country in early October. Now it appears the early start could be capped by an early end, with the CDC reporting that flu activity in the country continues to decline. (STAT News)
Moderna says RSV vaccine is 84% effective at preventing disease in older adults. (CNBC)
Economy
Investors Seek to Pull $20 Billion From Core Real Estate Funds: Some of the biggest investors in US commercial real estate are looking to cash in before property values slide further. A group of property funds for institutional investors ended last year with $20 billion in withdrawal requests, the biggest waiting line since the Great Recession. (Bloomberg)
The Bank of Japan maintained ultra-low interest rates, including its 0.5% cap for the 10-year bond yield, defying market expectations it would phase out its massive stimulus program in the wake of rising inflationary pressure. (Reuters)
Hong Kong Home Sales to Surge 50% as Rates Peak, Border Reopens: The lending benchmark is expected to level off at 7% in 2023, while property developers see faster transactions after the border opens. (Bloomberg)
Strong Demand for Air Travel Lifts United Airlines’ Profit: Rival airlines including Delta and American have also said resilient demand has led to stronger-than-expected revenue gains in the final months of the year. (Wall Street Journal)
Investors big and small are increasing their bet on bonds: The steep selloff in fixed-income investments means that bonds now pay their highest yields in more than a decade. Fund giants such as BlackRock and Vanguard say that makes high-quality corporate and mortgage bonds attractive compared with stocks, which stand to extend their losses from last year if the U.S. economy enters recession. Yields are so attractive that BlackRock proposed investors shift from the classic 60-40 portfolio—60% stocks and 40% bonds—to 35% in stocks and 65% in bonds. That should let investors achieve a 6.5% annual yield at current prices, according to BlackRock’s research. (Wall Street Journal)
Gen Z is driving luxury sales as wealthy shoppers get younger: Generation Y, also known as millennials, and Generation Z accounted for all of the luxury market’s growth last year. Analysts and luxury executives say the appeal of luxury brands to ever-younger consumers is tied to a surge in wealth creation over the past few years, along with social media. Luxury sales have so far been largely immune to rising interest rates, a slowing economy and high inflation. (CNBC)
Few CEOs plan to change course on remote work this year, according to a Conference Board survey. Only 4% of chief executives in the U.S. and Europe said they plan to reduce remote work, and 5% said they want to expand it. Close to 40% of software development job listings advertise remote work, per Indeed data. And that number has stayed relatively flat in recent months. The same is happening in job listings for marketing and human resources. The share of job postings offering remote hasn't changed much — hovering around 27%, per Indeed. (Axios Markets)
Recession fears won’t stop ‘the big quit’ in 2023, says LinkedIn. (CNBC)
Technology
Microsoft is preparing to lay off as many as thousands of staff in multiple divisions starting as soon as today. The percentage of staff that would be impacted couldn’t be learned. Sky News earlier reported that 5% of the enterprise software company’s roughly 220,000 or so employees could be cut. (The Information)
Microsoft said it would soon sell access to ChatGPT, an artificial intelligence-powered chatbot developed by OpenAI that can give humanlike answers in response to simple text prompts. OpenAI has been offering free access to ChatGPT through its website, but the site has often been overwhelmed by demand. (The Information)
Apple rolls out Macbooks with new M2 chips in rare January launch: Apple unveiled MacBooks powered by its new and faster M2 Pro and M2 Max chips in a surprise launch weeks ahead of its usual schedule. The new 14-inch MacBook Pro with M2 Pro starts at $1,999, with the 16-inch model starting at $2,499. Both models are available to order online and will start shipping and appearing in Apple stores on January 24. (Reuters)
Apple Delays AR Glasses, Plans Cheaper Mixed-Reality Headset. (Bloomberg)
Montreal-based payments firm Lightspeed Commerce announced it would cut 10% of its staff, targeting bloated management ranks in particular after making a string of acquisitions in recent years. The company, which sells point-of-sale software and payments hardware mainly for the retail and restaurant industries, said the cuts will affect around 300 employees. (The Information)
Retail trading platform Robinhood is launching an independent media brand called Sherwood that will be led by veteran tech editor and media entrepreneur Joshua Topolsky. The entity will build on the success of Robinhood's popular daily markets newsletter, Snacks, and will serve as a branding and customer acquisition tool. Sherwood Media has been set up as an independent LLC that will exist as a subsidiary of Robinhood, in part to ensure that the content produced within Sherwood remains editorially independent. How it works: Robinhood will support the creation of the outlet to start, but Topolsky plans to create commercial opportunities for the editorial products he's building. (Axios)
Getty Images announced a lawsuit against Stability AI, the company behind popular AI art tool Stable Diffusion, alleging the tech company committed copyright infringement. The stock image giant accused Stability AI of copying and processing millions of its images without obtaining the proper licensing, according to a press release issued Tuesday. London-based Stability AI announced it had raised $101 million in funding for open-source AI tech in October and released version 2.1 of its Stable Diffusion tool in December. (CNN)
Smart Links
Western banks struggle to exit Russia after Putin intervention. (Financial Times)
Apple Working on Cheaper Mixed-Reality Headset to Reach More Consumers. (The Information)
China’s bid to leave covid behind could determine global economy’s fate. (Washington Post)
New York City’s Luxury Apartment Market Under Pressure in 2023. (Wall Street Journal)
Harvard Medical School Withdraws From U.S. News Ranking. (Wall Street Journal)