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The World
U.S. retail sales fell by the most in a year in December, pulled down by declines in purchases of motor vehicles and a range of other goods, putting consumer spending and the overall economy on a weaker growth path heading into 2023. The second straight monthly decrease in retail sales, which are mostly goods, is undercutting production at factories. Manufacturing output recorded its biggest drop in nearly two years in December, while monthly producer prices also tumbled. (Reuters)
Stocks Retreat, Dow Falls More Than 600 Points: Stocks fell after a fresh batch of data on producer prices and retail sales offered mixed signs of how the economy is weathering the Federal Reserve’s tightening campaign. (Wall Street Journal)
Dollar touches 7-month low, reversing a trend that dominated much of 2022, as Fed rate rise expectations slide. (Financial Times)
The market did not like what it saw from the final retail holiday sales numbers for 2022, but e-commerce is continuing to boom, including in areas outside the core retail consumer. DHL trucking data shows that while the core consumer market has pulled back, in many categories e-commerce sales remain strong. (CNBC)
Germany will allow German-made tanks to be sent to Ukraine to help defend against Russia if the U.S. agrees to send its own tanks, a Berlin government source told Reuters. Chancellor Olaf Scholz has stressed the condition about U.S. tanks several times in recent days behind closed doors, the German government source said, speaking on condition of anonymity. (Reuters)
The U.S. is gearing up to announce a major new weapons package for Ukraine on Friday, as top military leaders from around the world gather in Germany to discuss how to help Kyiv in its fight against Russia While the next tranche will include additional artillery, ammunition and armor — likely Stryker armored combat vehicles — the U.S. is not expected to sign off on American M1 Abrams tanks. (Politico)
The coldest and highest parts of the Greenland ice sheet, nearly two miles above sea level in many locations, are warming rapidly and showing changes that are unprecedented in at least a millennium, scientists reported. That’s the finding from research that extracted multiple 100-foot or longer cores of ice from atop the world’s second-largest ice sheet. The samples allowed the researchers to construct a new temperature record based on the oxygen bubbles stored inside them, which reflect the temperatures at the time when the ice was originally laid down. (Washington Post)
Governments could get a bigger windfall than previously estimated if they implement a planned overhaul of international tax rules, the Organization for Economic Cooperation and Development said. The Paris-based body guided lengthy talks that eventually led to the October 2021 international tax agreement. The plan set a minimum tax rate of 15% on the profits of large businesses and shifted some tax revenues to where companies sell to consumers, rather than where they are based. (Wall Street Journal)
Economy
U.S. Treasury Secretary Janet Yellen met with her Chinese counterpart and pledged an effort to manage differences and “prevent competition from becoming anything ever near conflict” as the two nations try to thaw relations. A U.S. Treasury readout of the 2 1/2-hour meeting says the two agreed that the U.S. and China would cooperate more on issues around financing for battling climate change and work to support “developing countries in their clean energy transitions.” The readout also indicates Yellen plans to travel to China and welcomes her counterparts to the U.S. in the near future. (Associated Press)
Inside Yellen's rare meeting with China's vice premier: The mood of the meeting, which was attended by officials from both delegations, was largely positive. When it was over, Treasury quickly announced that Yellen would visit China in the "near future." Yellen will also roll out the welcome mat to whoever replaces Liu in March, when President Xi Jinping unveils his new government. (Axios)
China's economy faces triple threat after growth misses target: Low exports, increased savings and COVID wave threat cloud outlook in 2023. (Nikkei Asia Review)
UK inflation edges down to 10.5% in December, food prices surge: British inflation eased last month after hitting a 41-year high in October, but the pressure on households remained intense as food and drink prices rose at the fastest pace since 1977. Pay awards by employers held at 5% for the second month in a row in December. (Reuters)
Citi Summons Unproductive Remote Workers to Office for Coaching: Citi has one of the more flexible policies on Wall Street when it comes to remote work. But if a worker’s productivity dips, they can expect to spend more time in the office. “You can see how productive someone is or isn’t and if they’re not being productive we bring them back to the office, or back to the site, and we give them the coaching they need until they bring the productivity back up again,” Chief Executive Officer Jane Fraser said. (Bloomberg)
CEO Poll Finds Rising Economic Confidence For 2023: The highest proportion of CEOs since April 2021 is now predicting the business climate will improve over the course of the year. (Chief Executive)
Technology
Microsoft plans to lay off 10,000 employees through March 31, reducing its headcount by less than 5%, and take a $1.2B charge tied to severance and more. (Geekwire)
Read: CEO Satya Nadella’s memo to Microsoft employees. (Microsoft)
Amazon begins laying off 18,000+ employees, impacting ~1% of its total workforce and ~6% of its 350,000 corporate staff, mostly in its retail and HR departments. (Bloomberg)
Apple is the only tech giant that still hasn’t announced layoffs — this may explain why: An underappreciated factor is how rapidly tech companies ramped up hiring over the last two years. Apple is a major exception: It did not appreciably increase its rate of hiring over the last two years, and also has not announced any layoffs. (CNBC)
Meta Pressures Average-Rated Employees to Up Their Game: Company leaders have told some managers that employees who receive a “meets all expectations” grade in their performance review have to up their game, said a current manager. In the past, employees receiving such a grade were told that was a positive sign. The new message comes amid one of the most intense performance-review cycles in the company’s history, in which Meta managers are ratcheting up pressure on the workforce. It follows Meta’s layoff of 13% of its workforce, or 11,000 people, in November. (The Information)
Buyers call bluff on unicorn valuations in secondary markets trading: Those astronomical unicorn valuations? Buyers of shares in pre-IPO companies don’t believe them. At least that’s what the data from secondary markets platforms seems to show: The discrepancy between what sellers are asking for and what buyers are willing to pay has grown to around 22%. (Crunchbase)
Sam Bankman-Fried found ways to control the prices of digital coins to benefit his companies, FTX and Alameda, according to cryptocurrency investors. In Sam Bankman-Fried’s quest to keep his cryptocurrency empire looking profitable, the disgraced founder of FTX often promoted newfangled digital currencies that crypto aficionados came to call “Samcoins.” Mr. Bankman-Fried wooed the developers of these new coins with names like Serum and Maps, insisting that they make their trading debuts on the FTX exchange. Then his hedge fund, Alameda Research, would buy some of these newly listed Samcoins to prop up their value, while Mr. Bankman-Fried used FTX’s influence in the crypto industry to drum up interest in those coins and persuade other investors to also buy significant amounts. (New York Times)
Live Event
Today, 8 am ET: Live From Davos 2023: Risks and Rewards of AI will present a candid and robust conversation about the future of artificial intelligence and the benefits and risks it presents. The conversation will be moderated by Nicholas Thompson, CEO of The Atlantic, with a panel of top global thought leaders: Azeem Azhar, Founder, Exponential View; Ian Bremmer, President and Founder, Eurasia Group and GZERO Media; Eileen Donahoe, Executive Director, Global Digital Policy Incubator (GDPI) at Stanford University; and Brad Smith, Vice Chair and President, Microsoft. (GZERO Media)
Smart Links
National shortage of accountants is prompting some small and midsize firms to hire overseas for the first time. (Wall Street Journal)
Global smartphone shipments fell 17% YoY in Q4 2022 and 2022 shipments fell 11% YoY to under 1.2B, the lowest quarterly and annual levels since 2013. (TechCrunch)
Healthcare company bankruptcies up 84% in 2022. (Healthcare Dive)
Hospitals gear up to expand market power, raise prices in 2023. (STAT News)
Computers that power self-driving cars could be a huge driver of global carbon emissions. (MIT News)
Delta lands the top spot in WSJ’s airline ranking. (Wall Street Journal)