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The World
U.S. consumer prices increased solidly in December as rental accommodation and used cars maintained their strong gains, culminating in the largest annual rise in inflation in nearly four decades — 7% — which bolstered expectations that the Federal Reserve will start raising interest rates as early as March. Rising inflation is also eroding wage gains. Inflation-adjusted average weekly earnings fell 2.3% YoY in December. (Reuters, Washington Post)
The US budget deficit narrowed sharply in December to its lowest in two years as the economic recovery helped boost tax receipts. The deficit shrank to $21.3bn — its lowest level since December 2019 — and down from the nearly $144bn shortfall last December. (Financial Times)
Housing costs swell, hampering home buyers and pushing up rents: Rent costs surged 0.4% in December. (New York Times)
Record Omicron wave punches a hole in U.S. workforces: Airlines, retailers, restaurants, hospitals and school districts are among those saying they are struggling to remain fully staffed because the current wave of infections has worsened an existing labor shortage by making many of their staff ill, or requiring them to stay at home to quarantine. More than 5m Americans — or 2% of the nation’s total workforce — could be isolating at home this week, according to an analysis by Andrew Hunter, senior US economist at Capital Economics. (Financial Times)
Thousands of public schools have temporarily moved away from in-person learning. New York City saw its overall attendance rate fall below 70% when classes resumed after the winter holidays, far beneath its pre-pandemic average of over 91%. Boston Public Schools student attendance has hovered around 70% since winter break ended Jan. 4, down from about 90% before the holidays
Omicron patients at Kaiser Permanente Southern California were 74% less likely to end up in ICUs and 91% less likely to die than delta patients, a study found. No patients with omicron required mechanical ventilation, and hospital stays for patients with omicron also were about three days shorter than those for delta patients. (CNBC)
The U.S. criticized China's decision to cancel a growing number of flights to China and warned it could take action in response. (Reuters)
NATO has offered Moscow further talks on arms control in a bid to prevent further Russian aggression against Ukraine, but the Kremlin has so far not accepted. NATO’s secretary-general Jen Stoltenberg said the alliance was prepared to discuss limits on missile deployment and military exercises as well as measures to improve transparency and communications. (Financial Times)
Japan is spending tens of millions of pounds on an electromagnetic gun that fires supersonic missiles to try to hit even faster missiles deployed by North Korea, China and Russia. Tokyo’s project has been given new impetus by advances in hypersonic weaponry, such as the short-range missile fired by North Korea into the Sea of Japan on Monday. (The Times)
The Scottish Conservatives leader demanded that Boris Johnson resign despite the prime minister’s apology for attending a Downing Street drinks party during lockdown. In a move that has created the largest divide yet between the English and Scottish Tory parties, Ross said the admission from Johnson that he attended meant “his position is no longer tenable.” (The Times)
The cancer death rate fell by 32% between 1991 and 2019, according to an American Cancer Society report. The ACS attributes the drop in part to earlier detection of lung cancer and the fact that patients with the disease are living longer after diagnosis. The report also credits increased access to screening and care, declining rates of smoking and newly available combination therapies. Rates of liver cancer, one of the most deadly, have also stabilized, when only a few years ago it was one the fastest increasing cancer. (Axios, American Cancer Society)
Economy
Big US companies are expected to demonstrate their health by reporting strong profits for 4Q21 even as high inflation, wage pressure, supply chain disruption and the Omicron variant cloud the outlook. As earnings season kicks off, companies in the S&P 500 stock index are forecast to deliver YoY earnings growth of nearly 22% for 4Q21, following an increase of almost 40% in 3Q21. Nine of the 11 sectors represented in the S&P 500 are forecast to report earnings growth for 4Q21, with energy, industrials, and materials likely to lead the way. The only sectors where profits are forecast to shrink are utilities and financials. (Financial Times)
Morgan Stanley will raise its annual bonus for top-performing staff today by more than 20%, with a dealmaking boom to usher in bumper payouts by banks this year. Bankers in equity underwriting and M&A advisory businesses are expected to receive some of the highest increases at the Wall Street firm. (Reuters)
Oil prices that rallied 50% in 2021 will power further ahead this year, analysts predict, saying a lack of production capacity and limited investment in the sector could lift crude to $90 or even above $100 a barrel. Analysts say oil prices will be supported by the reluctance of many governments to restore the strict restrictions that hammered the global economy when the pandemic took hold in 2020. (Reuters)
The IEA head accused Russia of throttling gas supplies to Europe at a time of “heightened geopolitical tensions”, implying that Moscow has manufactured an energy crisis for political ends — holding back at least one-third of the gas it could send to Europe, while depleting Russian-controlled storage facilities on the continent to bolster the impression of tight supplies. (Financial Times)
Volkswagen posted its lowest sales figures in 10 years in 2021 at 8.9 million deliveries, and it said it expected supply chain conditions to remain volatile in 1H22. By contrast, luxury carmaker BMW saw record deliveries of 2.21 million vehicles from the BMW brand, a success attributed in part to its ability to adapt to supply chain shortages. (Reuters)
Electric-vehicle sales in China jumped 160% to a record 2.91 million units last year, underpinning the country’s first rise in overall auto sales in four years. (Nikkei Asia Review)
The race is heating up among payments processors that hope to get ahead in crypto. Checkout[dot]com, the behind-the-scenes company that powers payments at some of the biggest names in crypto, raised $1 billion at a $40 billion valuation as it invests further in crypto and Web3. The deal aims to help the company push ahead of competitors like Stripe that haven’t plunged as deeply into digital currencies. (The Information)
Stock trading app Robinhood will let most of its 3,400 person workforce work remotely on a permanent basis. Meanwhile, Coinbase is giving employees four ‘recharge weeks’ off in 2022 in order to counteract what it called an intense working environment. (CNBC, The Block)
The Turkish lira has become so volatile that Turks have ditched the local currency for assets with an even riskier reputation: cryptocurrencies. While the lira unraveled against the dollar in the last quarter of 2021, cryptocurrency trading volumes using the lira leapt to an average $1.8 billion a day across three exchanges. (Wall Street Journal)
Technology
The PC market grew 14.8% in 2021, shipping the largest number of desktops, laptops, and workstations in a single year since 2012. 2021 shipments were up over 34% from the industry’s low point in 2017 to 349 million units. The recovery in PC sales has been driven by the Covid-19 pandemic. As the pandemic shut down economies around the world, households realized they needed new laptops for family members going to virtual school, companies decided to buy new laptops for their employees working from home, and sales started to shoot up. (CNBC)
The big winners in 2021 were the Big 3 PC makers: Lenovo, HP and Dell, with Apple coming in fourth. Apple had the largest growth number YoY at 28.3%, while Acer was second with 21.8% growth in spite of being fifth overall in terms of shipment numbers. In terms of market share, Lenovo and HP were the clear winners with 24.1% and 21.7%, respectively. Dell was third with 17.4% with Apple fourth with 8.5%. (TechCrunch)
Microsoft has hired a veteran semiconductor designer from Apple, as it seeks to develop its own chips for Azure servers. (Bloomberg)
Consumer spending on mobile apps reached $170 billion in 2021, according to App Annie’s newly released “State of Mobile 2022″ report. That figure is up 19% YoY, which is down just one percentage point from the growth rate the firm reported in its prior annual report. Growth in app downloads, however, dipped a bit more. Though today’s consumers are installing more apps than ever — 230 billion were downloaded in 2021, setting another record — the growth rate itself is slowing. (TechCrunch, App Annie report)
Instagram is benefiting from TikTok’s ban in India, and has now reclaimed the top spot in terms of total global downloads as of 4Q21. Instagram had its best quarter since at least 2014, with app installs up 10% over Q3. It also the first Meta app to take the No. 1 position on the top downloads chart since WhatsApp held that spot back in 4Q19. In fact, 4Q21 was only the second time in the past two years that TikTok wasn’t the No. 1 app by worldwide downloads. (TechCrunch)
Smart Links
Libor, long the most important number in finance, dies at 52. (New York Times)
NFL regular-season ratings increase 10% over last season — best results in 6 years. (ESPN)
Video: How Starbucks’s mobile app became a winner. (Wall Street Journal)
Dartmouth College to ‘remove financial barriers’ for low-income foreign applicants. (Financial Times)
2021 was a record year for cyber attacks, with a 50% increase over 2020 in attacks per week on corporate networks: Check Point. (ZDNet)
Nickel hits 10-year high as electric vehicle production ramps up. (Financial Times)
Texas hospital offering nurses $20K sign-on bonus. (Becker’s Hospital Review)