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The World
The EU is expected to impose pre-departure Covid-19 tests on travelers from China within days to try to prevent a surge in infections in that country spreading to Europe. The “overwhelming majority” of the 27 EU members asked for the move at a meeting in Brussels. EU health commissioner Stella Kyriakides said an emergency meeting on Wednesday would take the final decision and that capitals had “converged” on a requirement for pre-departure testing. (Financial Times)
Bodies Pile Up in China as Covid Surge Overwhelms Crematoriums: While nobody knows the true extent of fatalities, it’s clear funeral homes are already at capacity. (Bloomberg)
The first regular shipment of liquefied natural gas from the U.S. arrived in Germany, part of a wide-reaching effort to help the country replace energy supplies it previously received from Russia. The tanker vessel Maria Energy arrived at the North Sea port of Wilhelmshaven, where its shipment of LNG will be converted back into gas at a special floating terminal that was inaugurated last month by German Chancellor Olaf Scholz. (Associated Press)
Bulgaria's state-owned gas provider signed an agreement with its Turkish equivalent, Botas, granting Bulgargaz access to Turkey's state-owned gas trading company's liquefied gas terminals and supply grid. (Deutsche Welle)
Tokyo Gas unit nears $4.6 billion deal to buy U.S. natgas producer. (Reuters)
New Chinese Foreign Minister Qin Gang offered effusive praise of Americans after stepping down as his nation’s top envoy to Washington, signaling that ties between the world’s biggest economies appear to be warming despite recent tensions over Taiwan. “I have been deeply impressed by so many hard-working, friendly and talented American people that I met,” Qin said, adding that he had “made many friends across the US.” (Bloomberg)
Amid Fresh Wave of U.K. Strikes, Support for Many Walkouts Remains High. The winter holiday season across most of Britain ends on Tuesday, but the return to work for millions of Britons comes on the same day as yet another train strike, promising a commute as unpredictable as the country’s increasingly erratic rail network. Britain begins the new year just as it ended the old one, in the middle of a wave of labor unrest that has involved as many as 1.5 million workers so far, concentrated in the public sector and formerly state-owned businesses. (New York Times)
Tourism and Manufacturing Fight for the Future of Power in Europe. Europe’s plans to install wind and solar power are accelerating in the wake of the invasion of Ukraine, which drove up natural-gas prices sharply. They’re running into opposition from residents and officials who say a wave of new projects will harm the region’s landscapes, cultural sites and valuable tourism industry. (Wall Street Journal)
Canada in 2023 is closing its doors to foreign investors who want to purchase homes. A new Canadian law took effect January 1 that essentially bans foreign buyers from buying residential properties as investments for two years. The law was passed because of a spike in Canadian home prices since the start of the pandemic -- and some politicians' beliefs that foreign buyers were responsible by snapping up supply of homes as investments. (CNN)
Covid’s winter surge is poised to exceed summer peak: The number of people in the US hospitalized with Covid-19 is about to surpass the figure reached during this summer’s spike, as a confluence of factors — from the continued evolution of the coronavirus to holiday gatherings — drives transmission. Hospitalizations among people 60 and older — those most vulnerable to severe outcomes from a Covid case — have been taking off since mid-November. (STAT News)
Southwest Airlines Offers 25,000 Points to Passengers Hit by Travel Meltdown: Travelers will receive frequent-flier miles on top of ticket refunds and reimbursements for expenses. (Wall Street Journal)
Economy
More Bosses Order Workers Back to the Office as Job Market Shifts. Companies including investment giant Vanguard Group, workplace technology company Paycom Software and others have sent directives to employees in recent weeks, urging workers to follow existing hybrid schedules or to come into the office on additional days in 2023. In some cases, bosses have told those who fail to comply that they could face termination within weeks. Employees at some companies have challenged new directives in corporate all-hands sessions.Those pushing to remain at home say they find in-office work unproductive and commuting inefficient. Employers, meanwhile, say bringing workers back together is important because it helps with issues such as problem solving, training new hires and reinforcing corporate culture. “There’s a little bit of a tug of war going on right now,” said David Garfield, global head of industries at consulting firm AlixPartners. (Wall Street Journal)
Office Owners Already Reeling From Remote Work Now Face Recession Risk in 2023: Companies are cutting back on office space, posing a fresh challenge to landlords. (Wall Street Journal)
Record of December Fed meeting due today: The Federal Reserve is set to shed more light on why it’s worried that strong inflation may linger as the US economy moves into the new year. At the conclusion of the Dec. 13-14 meeting of the Federal Open Market Committee, policymakers published new projections showing they expected inflation would end 2023 higher than they previously thought. That led to surprisingly widespread support in the projections for the notion that interest rates would need to rise above 5% in 2023. (Bloomberg)
New tax brackets and standard deductions are now in effect, potentially boosting paychecks and lowering income tax for many Americans, who enter the new year still reeling from sky-high prices. The IRS made a few other changes to account for inflation, including raising contribution limits for tax-deferred retirement plans in 2023 and a 3-cent increase to the mileage rate. (Axios)
The largest Social Security payment increase in more than 40 years has arrived and will roll out to beneficiaries throughout January. The 8.7% increase is the biggest jump in benefits since 1981 and an average of an additional $140 per month starting in January. (Axios)
UK food prices rose by a record 13.3% in December, increasing fears that inflation may not fall as sharply in 2023 as central bankers and economists hope. Meanwhile, UK manufacturing slumped to its lowest level in 31 months. (The Times)
German inflation drops more than expected to 9.6%. (Financial Times)
Retailers brace for tougher times and more frugal customers in 2023. The next few weeks, which close out many retailers’ fiscal year, could help determine whether the holiday quarter is a win or a bust. It’s an important time for helping stores clear out excess inventory, too. January could also set the tone for 2023 — when some economists and retail industry watchers anticipate the U.S. will tip into a recession. So far, early holiday results have been better than some economists and retailers feared. Sales from Nov. 1 to Dec. 24 rose 7.6%, according to data from MasterCard SpendingPulse. (CNBC)
The World Bank is seeking to vastly expand its lending capacity to address climate change and other global crises and will negotiate with shareholders ahead of April meetings on proposals that include a capital increase and new lending tools, according to an "evolution roadmap" seen by Reuters. The roadmap document - sent to shareholder governments - marks the start of a negotiation process to alter the bank's mission and financial resources and shift it away from a country- and project-specific lending model used since its creation at the end of World War Two. (Reuters)
Turkish consumer inflation probably fell at the steepest pace in nearly 28 years, but public spending ahead of elections is set to keep price gains among the world’s highest. Consumer prices rose an annual 66.7% in December, down from 84.4% the previous month, according to the median prediction in a Bloomberg survey of analysts before Tuesday’s inflation release. (Bloomberg)
Turkish stocks soar as local investors seek refuge from blistering inflation (FT)
Technology
For the first time in nearly a decade, the two largest players in online advertising are no longer raking in the majority of U.S. digital-ad dollars, a decline that industry insiders expect to continue in years to come. Google and Meta accounted for a combined 48.4% of U.S. digital-ad spending in 2022. Their combined U.S. market share hadn’t been under 50% since 2014, said Insider Intelligence, which expects that number to drop to 44.9% this year. (Wall Street Journal)
Twitter plans to lift its restrictions on political ads. The move also puts Twitter in alignment with several of the other major social media companies, such as Meta’s Facebook and Google’s YouTube, which both allow paid political content. One notable exception is ByteDance’s TikTok, which still has a ban on political advertising. (Politico)
Chinese regulators approved a plan by billionaire Jack Ma’s Ant Group Co. to raise 10.5 billion yuan ($1.5 billion) for its consumer unit, signaling progress in the government-ordered overhaul of the financial technology firm. The China Banking and Insurance Regulatory Commission division in Chongqing green-lit the company’s plan to lift its capital to 18.5 billion yuan, according to a notice on December 30. Ant, which contributed 5.25 billion yuan as part of the plan, will control half of its shares after the deal, while a unit owned by the city of Hangzhou will hold 10%, becoming the second-biggest shareholder. (Bloomberg)
Amazon reached an agreement with certain lenders to provide the e-commerce giant an $8 billion unsecured loan. The term loan will mature in 364 days, with an option to extend for another 364 days and the proceeds would be used for general corporate purposes. "Given the uncertain macroeconomic environment, over the last few months we have used different financing options to support capital expenditures, debt repayments, acquisitions, and working capital needs," an Amazon spokesperson told Reuters. (Reuters)
Workers at Microsoft's ZeniMax Studios voted to form the tech giant's first labor union in the US. Microsoft agreed to recognize the group after a "supermajority" of workers at the video game production company signaled support for the plan. Apple, Amazon and Google are among the other US companies that have seen labor fights in recent years, as workers demand more from employers amidst the rising cost of living. (BBC)
Tech Layoffs Are Happening Faster Than at Any Time During the Pandemic: Areas that were largely spared in 2020 are now among those with the largest numbers of job cuts. Consumer and retail were the two hardest-hit parts of the tech sector in 2022, combining for about 40,000 layoffs. Nearly 100 healthcare-related tech companies laid off an estimated 11,000 employees in 2022. In 2022, ed-tech employers announced more than 8,000 job cuts. (Wall Street Journal)
Smart Links
Apple's stock market value falls below $2 trillion (Reuters)
University of California invests $4bn in Blackstone’s real estate fund. (Financial Times)
Chip glut to last most of 2023 while automotive crunch persists. (Nikkei Asia Review)
When Supply, Not Demand, Is the Problem. (New York Magazine)
Here’s (Almost) Everything Wall Street Expects in 2023. (Bloomberg)