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The World
Federal Reserve officials at their meeting last month eyed a faster timetable for raising interest rates this year, potentially as soon as in March, amid greater discomfort with high inflation. Minutes of their Dec. 14-15 meeting showed officials believed that rising inflation and a very tight labor market could call for lifting short-term rates “sooner or at a faster pace than participants had earlier anticipated.” Some officials also thought the Fed should start shrinking its $8.76 trillion portfolio of bonds and other assets relatively soon after beginning to raise rates, the minutes said. Investors would see the move as another way for the Fed to tighten financial conditions to cool the economy. (Wall Street Journal)
The heaviest tech selling in a decade fueled a stock-market rate rout: Investors dashed out of US tech stocks in powerful market rotation, as the Nasdaq closed down 3.3% in its worst day since February 2021 as interest rate fears propel sell-off of bonds. (Bloomberg, Financial Times)
Omicron pushes Wall Street toward a work-from-home future: Banks such as JPMorgan and Goldman, which urged staff to return to the office last year, are starting the new year with many employees at home. In Hong Kong, Standard Chartered has started operating in split teams on concerns about a new outbreak. (Wall Street Journal, Reuters)
Walmart is cutting the amount of paid leave its workers can receive after testing positive for the coronavirus from two weeks to one, a move the retailer says is meant to correspond with the latest federal guidance on isolation and quarantine. (Washington Post)
Hong Kong will ban passenger flights from Australia, Britain, Canada, France, India, Pakistan, the Philippines, and the U.S. for 14 days starting Saturday. (South China Morning Post)
UK travel rules introduced to curb the spread of Omicron will be scrapped tomorrow. PM Boris Johnson said a pre-departure test for arrivals into the UK would be ditched as well as the need for a PCR test on or before day two. (The Times)
Every U.S. cruise with passengers has coronavirus cases on board. Meanwhile air travelers faced more frustrating news yesterday, with more than 1,700 flight cancellations, a sign that staffing shortages and weather-related issues continue to stymie airlines’ efforts to get customers to their destinations. (Washington Post)
A Russia-led military alliance said it will dispatch peacekeeping forces to Kazakhstan after the country’s president asked for help in controlling protests that escalated into violence, including the seizure and setting afire of government buildings. Protesters in Kazakhstan’s largest city stormed the presidential residence and the mayor’s office Wednesday and set both on fire, according to news reports, as demonstrations sparked by a rise in fuel prices escalated sharply in the Central Asian nation. (Associated Press)
The EU’s top diplomat warned Russia and the US against creating “spheres of influence” in Europe ahead of talks between the two countries next week regarding proposals from Moscow that would reshape the continent’s defense and security architecture. Meanwhile, the leader of Sweden’s main opposition party urged the Scandinavian country to emulate neighbor Finland and stress it has the right to join the NATO military alliance in the face of pressure from Russia. (Financial Times)
Taiwan is setting up a $200m fund to invest in Lithuania and is aiming to take as many of the Baltic country’s goods banned by China as possible, as Taipei tries to reward Vilnius for its diplomatic support. Vilnius last year agreed to let Taiwan open a representative office — a de facto embassy — in its own name, rather than under the name of its capital Taipei as many other European countries have done. Beijing, which claims Taiwan as part of China and tries to force other governments to treat it as such, has since unleashed a wave of diplomatic and economic punishments against Vilnius. Beijing withdrew its ambassador from Vilnius, banned Lithuanian imports and put pressure on foreign manufacturers to stop using Lithuanian components. The Baltic country was also forced to evacuate its remaining diplomats from China over fears for their safety. (Financial Times)
CA Gov. Gavin Newsom’s plan to target the gun industry through private lawsuits is coming together in legislation that would allow gun violence survivors and other citizens to sue firearm manufacturers and dealers. Assembly Bill 1594 would hand the state, local governments, gun violence survivors and victims’ families the power to pursue legal action against “irresponsible, reckless or negligent gun manufacturers, importers and dealers,” said Assemblyman Phil Ting. The bill would leverage a loophole in federal law that largely shields gun manufacturers and dealers from liability when their products are involved in a crime. (Los Angeles Times)
After the January 6 assault on the U.S. Capitol, dozens of major corporations publicly pledged to pause their financial contributions to 147 Republican lawmakers who had voted to overturn the 2020 presidential election. A year later, most — but not all — of those companies have kept their word, according to an analysis of Federal Election Commission filings. (CBS News)
Economy
Venture funding in 2021 broke records across the board, with investment last year up more than 10x what it was a decade earlier. Global venture investment last year totaled $643 billion, compared to $335 billion for 2020—marking 92% growth year over year. The figures underscore a dramatic change in the startup funding environment in the past year. Consider that at the end of 2020, almost a year into the pandemic, global venture investment had grown around 4% YoY. (Crunchbase)
VCs invested $33B in Crypto and Blockchain startups in 2021. (Blockworks)
Bitcoin is the new gold, says Goldman Sachs: The price of a bitcoin could soar to $100,000 within five years if enough investors embrace the virtual currency as a store of wealth. Goldman Sachs analysts said that at present the cryptocurrency commands a 20% share of the “store of value” market. The stock of bitcoin is worth about $700 billion at today’s prices, compared with the $2.6 trillion of gold available for investment, it estimated. (The Times)
Bitcoin falls to ~$43.7K after an all-time high of ~$68K in November 2021, after the Federal Reserve confirmed plans to increase interest rates in March 2022. (Cointelegraph)
OPEC and Russia reached an agreement to increase petroleum production by some 400,000 barrels per day in February, sticking to a plan to slowly increase production levels to compensate for deep cuts during the zenith of the economic slowdown caused by the pandemic. (Associated Press)
China has released pilot versions of its digital yuan wallet application on mobile phone app stores as the country's central bank steps up its push to develop its own digital currency. (Reuters)
Remote work for high-paying jobs will pick up this year, accounting for as much as a quarter of such roles: “This life-changing shift to remote work is progressing even more rapidly than anyone thought it would,” said Ladders CEO Marc Cenedella. (Bloomberg)
C-suite turnover spiked in 1H21, according to data from recruiter Heidrick & Struggles. With average corporate leaders far older than they were 15 years ago and the job of managing during a pandemic a lot less fun the trend will continue in 2022. Among just over 1,000 large, listed companies, some 76 CEOs in 1H21 left their posts globally, Heidrick tallies, a 23% jump from the previous high of 2018 and almost as many as departed in all of 2020. (Reuters)
Small businesses are growing more optimistic: 83% of midsize businesses and 71% of small businesses “are optimistic about their own performance in 2022,” according to JPMorgan Chase’s 2022 Business Leaders Outlook Survey. That’s up from 77% and 63% at the dawn of 2021, respectively. To compete with larger, well-resourced companies, smaller employers are finding ways to boost wages and benefits. 61% of small businesses are poised to offer health insurance in 2022, up from 52% in 2021. (Axios, JPMorgan Chase)
Technology
Google will spend 2022 trying to match Apple’s ecosystem integrations: Google is announcing no fewer than 13 different new software features at CES 2022, ranging from AirPods-like fast switching to promised software that will mirror your Android text apps on a Chromebook. It’s part of an initiative that Google calls “Better Together” but that the rest of the industry is more likely to refer to as “catching up to Apple’s ecosystem.” The biggest updates come to Google’s “Fast Pair” framework, an Android UI designed to make pairing Bluetooth headphones easier. This year, Google will extend it to support auto-switching between devices, faster pairing to Android TV and Google TV, and more. It will also adopt the Fast Pair framework for installing new smart home devices using the upcoming Matter standard, which should mean that getting a new smart lightbulb or door lock going will be a lot easier. Google will also enable smartwatches running Wear OS 3 to unlock paired Android phones or Chromebooks, much in the same way an Apple Watch can unlock an iPhone. (The Verge)
Intel unveiled new 12th-generation Core processors suitable for laptops, and as part of the announcement, it claimed that the new Core i9 is not only faster than Apple's M1 Max chip in the 16-inch MacBook Pro, but is the fastest mobile processor ever. (MacRumors)
Walmart is expanding its service that will deliver your groceries directly to your refrigerator. Walmart’s InHome delivery service allows customers to place grocery orders online, then receive their deliveries by having a Walmart associate enter their home by way of a smart lock and is now available to 6 million U.S. households. Walmart says it plans to expand InHome delivery more broadly, with the goal of reaching 30 million U.S. homes by the end of the year. This will include forthcoming launches in major markets like Dallas, Nashville, LA, Chicago, Houston, Indianapolis and others. As a part of this expansion, Walmart plans to hire more than 3,000 delivery drivers and build a fleet of 100% all-electric delivery vans. (TechCrunch)
Auto makers supercharged move into electric vehicles: General Motors showed off an electric Chevy Silverado. The Chrysler brand is ditching gas engines and going to an all-electric lineup. And Japan’s Sony Group plans to jump into the electric-vehicle fray, creating its own car unit. News of battery-powered vehicles dominated the CES technology conference in Las Vegas, the latest sign that the momentum around EVs continues to build both within the auto industry and in other sectors, even if the shift is still barely noticeable in showrooms today. Car companies are pouring money into the development of electric vehicles and battery factories, investments spurred on by stricter tailpipe-emissions rules and Tesla meteoric rise. (Wall Street Journal)
China is tightening its grip on Big Tech's use of algorithms: Chinese regulators are taking away a cornerstone for the business models of internet giants including Alibaba, Tencent and ByteDance -- the use of algorithms to determine what users read, watch and purchase online. Consumers will have right to control or turn off how they are tracked, targeted. (Caixin Global)
A fire at a factory owned by the sole provider of a vital technology used to manufacture computer chips could exacerbate an already serious global shortage of semiconductors used in everything from phones to cars. The blaze broke out overnight on Sunday at a plant in Berlin, Germany, owned by ASML Holding. Although far from a household name, the Dutch company is the world’s largest supplier of photolithography systems and the only source of extreme ultraviolet (EUV) lithography machines, which are more advanced. These devices are used to etch circuits onto silicon wafers and create computer chips used by Apple, IBM and Samsung. In 3Q21, ASML Holding sold €5.2 billion worth of this equipment. (New Scientist)
Live Event
Today, 10 am ET: Carnegie Connects: A Conversation with Kurt Campbell, Deputy Assistant to the President and Coordinator for Indo-Pacific Affairs on the National Security Council. How should the U.S. deal with a rising China. Is there an approach that can create a sustainable balance of interest? Or is the future going to be driven by a zero-sum game of competition and even conflict? (Register: Carnegie Endowment)
Smart Links
Pfizer and BioNTech team up to develop mRNA-based shingles vaccine. (Financial Times)
France says car ads must come with a caveat: Walk, bike or take public transit instead. (Washington Post)
Grammy Awards officially postponed; no new date has been confirmed. (Variety)
Petal, which offers credit cards based on a potential borrower's cash flow rather than credit score, raises a $140M Series D at an $800M valuation. (TechCrunch)
Droves of Christmas shoppers splurged on the finest food. (The Times)
M&A Outlook 2022: Infrastructure will get an infusion. (Mergers & Acquisitions)
Global exodus from fossil fuel holdings tops 1,500 institutions. (Nikkei Asia Review)