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The World
The S&P 500 dropped nearly 3% for its biggest one-day decline in more than a year. The Dow tumbled almost 800 points for its fifth negative session in six, while the Nasdaq Composite slid 3.6%, falling into bear market territory, down 20% from its record high from November. (CNBC)
Apple suspended search ads in Russia, putting current and future App Store advertising campaigns on hold in the country “until further notice.” P&G to suspend ads and capital investments; Tommy Hilfiger, Calvin Klein close stores and suspend operations. Estée Lauder will close every store it owns and operates in Russia, while continuing to pay employees in Russia. (Bloomberg, Wall Street Journal, New York Times)
JPMorgan booted Russian debt from its widely tracked bond indices, following MSCI, S&P and others in removing securities. Crypto exchange Coinbase blocks over 25,000 addresses linked to illicit Russian activity. (Financial Times, Decrypt)
Japanese companies operating in Russia have begun evacuating employees and their families as the Japanese government raised its alert level for the country, urging nationals to consider leaving and warning against new travel there for any reason. (Nikkei Asia Review)
Oil industry chiefs called on Wall Street to stop holding back investment in new crude supply as “chaos” and “bedlam” threaten to overwhelm energy markets amid fears the west will ban Russian oil exports following the invasion of Ukraine. A surge in the international oil price to $139 a barrel sparked fears that the rally could damage the global economy. Oil executives pinned some of the blame on their investors. “Investors have been telling [oil companies] not to invest so much. Well, this is a crisis, we should be investing more,” said John Hess, CEO of Hess Corp, a big US shale oil producer. “We’ve had five years of under-investment and we’re paying for it now.” (Financial Times)
President Nicolás Maduro said Venezuela has the capacity to produce more than 3 million barrels of crude oil per day “if necessary for the stability of the world.” His comments came after senior Biden administration officials met with Venezuelan leaders over the weekend. (New York Times)
How would an oil import ban hit the Russian economy? The combined effect of a US-EU import stop would be significant despite China being the largest recipient of Russian oil by a large margin. Even just taking into account the countries included at the top end of this list as displayed here, a ban would remove over 40% of Russia's trade value from oil exports. Counting the imports from all EU countries and the U.S., this figure surpasses 48% - trade worth $35 billion in 2020. (Statista)
China accused Washington of failing to live up to its promise to not pursue confrontation with Beijing or provoke divisions in other parts of the world. Chinese Foreign Minister Wang Yi said no places should be regarded as U.S. backyards and the world was not a geopolitical chessboard. He said the U.S. had not lived up to commitments from US officials that Washington was not seeking a new Cold War nor to change China’s governance model. (South China Morning Post)
The U.S. has a long way to go before the pandemic is over and life returns to semblance of normalcy as deaths from Covid-19 remain far higher than seasonal respiratory viruses such as the flu, a group of two dozen scientists, doctors and public health experts said in a 136-page report. In years past, as many as 1,150 people died weekly from respiratory viruses like flu and RSV without the implementation emergency mitigation measures. However, Covid’s death toll remains about 10 times higher with 12,000 people succumbing to the virus some weeks. (CNBC, Report)
Economy
How the Ukraine war could boost China’s global finance ambitions: China’s currency has barely budged since Russia’s invasion began, even touching a four-year high of about Rmb6.31 against the dollar, extending a months-long run of resilience despite a recent slowdown in the growth of China’s economy.Its relative stability has fueled talk that the currency could become a haven asset, shielded from the geopolitical turbulence that has roiled markets around the world. This would be a boost to more than 20 years of work by Beijing to globalize its currency by increasing its use in foreign trade and as a store of value in international finance. (Financial Times)
Morgan Stanley urged the U.S. Federal Reserve to take a more cautious approach to raising interest rates as Russia's invasion of Ukraine spurs already sky-rocketing global inflation. (Reuters)
Japan logs biggest current account deficit since 2014 as oil import costs surge. (Reuters)
Prices at the gas pump are soaring to near record levels across the U.S., threatening to further pressure consumers and an economy already struggling with sky-high inflation. In the U.S., the ability to refine gasoline declined sharply during the pandemic-driven economic slowdown. The market has lost about one million barrels of daily gasoline-refining capacity since early 2020, when the U.S. was producing about 19 million barrels of gasoline a day. It is a recipe for higher prices as growth returns, even without the Ukraine crisis, analysts said. (Wall Street Journal)
Soaring gas prices not yet souring demand: Demand for gasoline increased in the last two full weeks of February. Demand was 7% higher in the week ending Feb. 25 than the comparable period a year earlier, when the average gallon was below $2.70. (Axios)
Used-car prices are still sky-high — but they may be easing. Wholesale used-car prices fell 2.1% in February from an all-time high in January. However, prices of used vehicles are still far above historical norms amid a shortage of new cars and trucks. (CNBC)
Fraud is flourishing on Zelle. The banks say it’s not their problem. Zelle, the payments platform used by millions of customers, is a popular target of scammers. It’s not clear who is legally liable for such losses. Banks say that returning money to defrauded customers is not their responsibility, since the federal law covering electronic transfers — known in the industry as Regulation E — requires them to cover only “unauthorized” transactions, and the fairly common scam that Mr. Faunce fell prey to tricks people into making the transfers themselves. Victims say because they were duped into sending the money, the transaction is unauthorized. Regulatory guidance has so far been murky. (New York Times)
The Economist’s glass-ceiling index measures the role and influence of women in the workforce across the OECD club of mostly rich countries. Four Nordic countries—Sweden, Iceland, Finland and Norway—top the index as the best places for working women. Japan and South Korea, where women must still choose between a family or a career, fill the bottom two places. The U.S. fell by two places to the 20th spot, with decreases in both the proportion of women in the workforce and female GMAT-exam entrants. It is still an outlier for providing no federally mandated parental leave, (The Economist, Axios)
Technology
Supreme Court Justice Clarence Thomas argued again that his colleagues should take up a case that would give them an opportunity to narrow the scope of tech's favorite legal provision: Section 230. While agreeing the high court shouldn't take up a specific case involving Meta, Thomas wrote write: "We should, however, address the proper scope of immunity under §230 in an appropriate case." (Protocol)
Google is in talks to buy cybersecurity consultancy Mandiant, which two years ago discovered the infamous SolarWinds hack, according to a person with knowledge of the discussion. A deal could bolster Google’s cloud computing business, which generates more than $19 billion annually but has been losing billions of dollars a year, and help it compete with bigger rival Microsoft, which also is reportedly interested in buying Mandiant. Google’s multibillion-dollar acquisition effort, if consummated, would be its second-largest ever. It comes as some employees have privately discussed the need for more security firepower to compete with Microsoft, which offers more security products for its Azure cloud customers, as well as with Amazon Web Services. (The Information)
Mandiant spikes 16% on report Google is in talks to acquire the company. (CNBC)
It wasn’t hard for Apple to cut off Russia — ‘China is the real test’. After Big Tech steps in to cut off Russia in wake of Ukraine invasion, experts say it was an easy call because Russia spends so little on a global scale, but could trap Apple and others when and if a larger customer like China makes a similar move. (MarketWatch)
Apple TV Plus is landing on Comcast’s full range of video platforms in the U.S. starting Monday, and the tech giant is offering three months free of the streaming service to the cable operator’s customers for a limited time. The Apple TV Plus app will begin rolling out on Xfinity X1, Xfinity Flex and XClass TVs on March 7 and will be available across all eligible devices in the coming days. (Variety)
Why AWS makes money and Google Cloud doesn’t: Google’s cloud computing arm is the company’s biggest hope of creating a substantial moneymaker outside of advertising, but it has been struggling to make up meaningful ground against industry pioneer Amazon Web Services. That extends to profitability: Last year, despite generating $19 billion in revenue, the kind of scale that generally brings profits, Google Cloud lost more than $3 billion. And the unit lost more than $17.6 billion over the past four years. Several former employees and people who do business with Google Cloud said the issues range from having fewer high-margin services to sell to customers to having higher overhead costs and a more lackadaisical engineering culture. (The Information)
Live Event
Today, 3 pm ET: The Russian Invasion of Ukraine and the Future of the European Security Environment. Join the Defense Project for a discussion moderated by Graham Allison, Douglas Dillon Professor of Government, with General (ret) Curtis Scaparrotti, Former Commander, US European Command and Supreme Allied Commander Europe, NATO. (Register: Harvard Kennedy School)
Smart Links
Construction spotted at N.Korea nuclear test site for first time since 2018. (Reuters)
U.S. added 20% less new wind power in 2021 than the previous year. (CNBC)
Amazon Prime Video will exclusively stream Country Music Awards, an awards-show first; Amazon Live will carry “shoppable” version of the red carpet. (Vulture)
Facebook gains inside role in U.S. 250th Anniversary Project with $10 million agreement. (Wall Street Journal)
Tiger Global Partners commit $1 billion for early-stage tech funds. (The Information)