Know someone who would like this newsletter? Forward it to them.
The World
The fighting in Sudan, which has re-erupted after a 72-hour humanitarian ceasefire collapsed at the weekend, has the potential to be “worse than Ukraine” for civilians, according to Amina Mohammed, deputy secretary-general of the UN. Mohammed said Sudan’s army and its rival paramilitary group were waging an indiscriminate battle for Khartoum, the capital city of 6mn people. The air force’s bombardment of paramilitary fighters who had dug into positions in people’s homes threatened to cause mass casualties, she said. Civilians in Khartoum are hiding in houses without air shelters while the air force is bombing parts of the city. There are widespread reports of soldiers belonging to the Rapid Support Forces, a paramilitary unit, commandeering homes, in effect turning the city’s inhabitants into human shields. (Financial Times)
Civilians attacked in Darfur region as Sudan fighting escalates. (The Guardian)
North Korea says U.S.-South Korea agreement escalates tension. North Korea criticized a recent U.S.-South Korea agreement to bolster the deployment of American strategic assets in the region for escalating tension to the "brink of a nuclear war," state media KCNA said. U.S. President Joe Biden and South Korean President Yoon Suk Yeol held a summit last week during which Biden pledged to give Seoul more insight into its nuclear planning over any conflict with North Korea as anxiety grows over Pyongyang's weapons programs and the American nuclear umbrella. (Nikkei Asia)
China’s Mixed Economic Data Fuels Concerns About Recovery. China’s economic recovery remains patchy, with latest indicators pointing to a contraction in manufacturing, while consumers splurge over the holidays and the housing market continues to rebound. Purchasing managers’ indexes released Sunday showed an unexpected decline in factory activity in April, weighed down by weaker global demand for Chinese exports. Chinese consumers, though, continued to spend on travel and shopping. (Bloomberg)
Cutting ties with China would be “unthinkable for almost all of German industry”, the chief executive of automaker Mercedes-Benz has said, as Europe’s largest economy grapples with its deep reliance on Beijing. Ola Källenius said cutting ties with China was impossible and “not desirable”. “The major players in the global economy — Europe, the USA and China — are so closely intertwined that disengaging from China makes no sense,” Källenius told the German newspaper Bild am Sonntag. “It’s about win-win on growth and climate protection, not conflict.” (Financial Times)
Chinese stocks falter as far-flung regions struggle to recover. (Nikkei Asia)
Public support for Japanese Prime Minister Fumio Kishida's cabinet has risen above the 50% mark for the first time in eight months, a Nikkei-TV Tokyo poll finds. The approval rating came to 52%, up 4 percentage points from March. Disapproval was 40%. (Nikkei Asia Review)
Kicked off Medicaid: Millions at risk as states trim rolls. There will be an unprecedented nationwide review of the 84 million Medicaid enrollees over the next year that will require states to remove people whose incomes are now too high for the federal-state program offered to the poorest Americans. Millions are expected to be left without insurance after getting a reprieve for the past three years during the coronavirus pandemic, when the federal government barred states from removing anyone who was deemed ineligible. Advocacy groups have warned for months that confusion and errors will abound throughout the undertaking, wrongly leaving some of the country’s poorest people suddenly without health insurance and unable to pay for necessary medical care. (Associated Press)
Global approval of U.S. leadership slumped in year two of President Biden's tenure, according to a Gallup poll of 137 countries and territories. While Biden's international honeymoon may be over, the U.S. still polls far ahead of China and Russia. The polling was largely conducted in mid-to-late 2022 — after the chaotic U.S. withdrawal from Kabul, and also after Russia's invasion of Ukraine. Approval of Russian leadership fell almost across the board, though it remained strikingly high in a handful of African countries. In Mali, where Russian mercenaries from the Wagner Group have a presence, approval was 90%. Germany is the less polarizing of the two Western powers included in the poll. While overall approval of German leadership declined from 2021, disapproval tends to be lower than for the U.S. Median approval of U.S. leadership fell from 41% to 39% in Europe, and 52% to 36% in the Americas in Biden's second year. (Axios)
Economy
US regulators racing to save First Republic are negotiating with at least three large banks that are bidding for all or part of the embattled California lender. The Federal Deposit Insurance Corporation, which is leading the government effort, received bids from banks including JPMorgan Chase, PNC and Citizens. It is still not clear that a deal will get done, and other bidders could emerge. (Financial Times)
Home Buyers Are Eager but Sellers Are Scarce, Creating ‘Real Gridlock’. The housing market typically comes to life in spring, when buyers emerge in the warmer weather. This year, the market appears stuck in a deep freeze, and the biggest culprit is a lack of sellers, housing experts say. There is interest among buyers — mortgage applications were up 10% in March from the month before — but the number of homes for sale is low. The mismatch is caused in part by homeowners who are inclined to sell but are sitting on the sidelines, scared off by the steep prices and mortgage rates that they would face as buyers. (New York Times)
Signs Are Mounting That a Debt Crunch is Looming: Funding crunch complicates the Fed’s decision-making next week. Lending is shrinking and the money supply is contracting. (Bloomberg)
Streaming giant Netflix says it will invest $2.5bn (£2bn) in South Korea over the next four years. The firm's co-chief executive Ted Sarandos made the announcement after he met South Korea's President Yoon Suk-yeol in Washington. Mr Yoon is currently on a state visit to the US where he is expected to meet President Joe Biden on Wednesday. Netflix has seen success with South Korean productions, including the hugely popular show Squid Game. Mr Sarandos said the money will be spent on making movies and television shows in Asia's fourth largest economy. (BBC)
More workers are turning to their employers’ benefits to pay down their student loans. Companies big and small are adopting and expanding debt-repayment benefits for employees, many of whom will be required to restart loan payments later this year after a lengthy pandemic pause. The trend is a new twist on the old tuition assistance benefit, human-resources leaders said. Instead of offering to help fund a master’s or other advanced degree, many employers find that professionals in their 20s, 30s and 40s need help paying down the debt they accumulated for their undergraduate studies. The benefit, which can be tax-exempt up to $5,250, is directed toward loan payment and is also proving to be an effective way to recruit and retain talent, HR leaders said. Two-thirds of nearly 2,900 employees surveyed by MetLife Inc. said they worry about paying down debt, including student and credit-card debt, and half of Gen Z and younger millennial respondents said help paying down student loans is a “must have” benefit at work. (Wall Street Journal)
Technology
Chatbots Are Digesting the Internet. The Internet Wants to Get Paid. If you’ve ever published a blog, or posted something to Reddit, or shared content anywhere else on the open web, it’s very likely you have played a part in creating the latest generation of artificial intelligence. Google’s Bard chatbot, OpenAI’s ChatGPT, Microsoft’s OpenAI-powered version of Bing, and similar tools from the many startups now incorporating these and other AI language models—none of these clever automated writers could exist without the enormous body of text freely available on the web. (Wall Street Journal)
OpenAI closes $300M share sale at $27B-29B valuation. OpenAI, the startup behind the widely used conversational AI model ChatGPT, has picked up new backers, TechCrunch has learned. VC firms including Tiger Global, Sequoia Capital, Andreessen Horowitz, Thrive and K2 Global picking up new shares, according to documents seen by TechCrunch. A source tells us Founders Fund is also investing. Altogether the VCs have put in just over $300 million at a valuation of $27 billion – $29 billion. This is separate to a big investment from Microsoft announced earlier this year, a person familiar with the development told TechCrunch, which closed in January. (TechCrunch)
Prime Minister Benjamin Netanyahu said any tech entrepreneurs who withdraw from Israel out of opposition to his judicial plans will lose out because the country remains “a safe place” to do business. “I’m not worried, because Israel is a fount of technology, is a fount of innovation,” Netanyahu said in an interview on CNN’s “Fareed Zakaria GPS” broadcast Sunday. “Some of them who said they’d moved the money out lost the money.” While Netanyahu didn’t say whom he had in mind, investors and leaders of Israel’s technology industry have expressed concern that the government’s plans to weaken the judiciary will threaten democracy and the country’s business environment. (Bloomberg)
A small number of tech companies are driving an ever-increasing share of the US stock market’s gains, prompting concerns among investors about the sustainability of the rally. The S&P 500 has risen 8 per cent so far in 2023, but 80 per cent of the increase has been driven by just seven companies, according to Bloomberg data. Apple and Microsoft have led the way, contributing around 40 per cent of the index’s rise as they added more than $1.1tn in combined market capitalization. The trend has been growing for several months. However, the gulf between the small number of winners and the rest of the market widened over the past week as strong tech earnings contrasted with mixed results in other sectors and downbeat economic data. (Financial Times)
Smart Links
Apple to Upgrade Its Watch Operating System With New Focus on Widgets. (Bloomberg)
In Kolkata, India’s new bankruptcy law is put to the test. (Financial Times)
Kevin Durant Signs Lifetime Contract With Nike. (Wall Street Journal)
Brands allow customers to opt out of Mother's Day marketing. (Axios)