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The World
Britain said it was looking into sending combat aircraft to Ukraine after Volodymyr Zelenskyy called for western fighter jets in an impassioned plea for “wings for freedom” in the UK parliament. As Ukraine’s president began a European trip that will also take in Paris and Brussels, Downing Street said UK defence secretary Ben Wallace had been asked to examine “what jets we might be able to give” Ukraine, but it warned that this was a “medium- to long-term” solution. (Financial Times)
Blinken Won’t Rule Out Sending Fighter Planes to Ukraine Eventually. (Bloomberg)
American intelligence agencies have assessed that China’s spy balloon program is part of a global surveillance effort that is designed to collect information on the military capabilities of countries around the world, according to three American officials. The balloon flights, some officials believe, are part of an effort by China to hone its ability to gather data about American military bases — in which it is most interested — as well as those of other nations in the event of a conflict or rising tensions. U.S. officials said this week that the balloon program has operated out of multiple locations in China. (New York Times)
Australia to remove China-linked security cameras from defense offices over spying concerns. (South China Morning Post)
Rescuers comb rubble in Turkey and Syria as quake death toll tops 12,000: Millions suffer cold and grief after catastrophic quake, awaiting help. With thousands dead and many more left homeless in Turkey and Syria, people struggling to unearth victims, bury the dead and provide for millions of survivors are pleading for more aid. (New York Times)
European ministers failed again this week to convince the U.S. to soften its landmark climate-tech spending program. Robert Habeck, Germany’s economic affairs minister, and his French counterpart Bruno Le Maire lobbied top officials in Washington D.C. yesterday to soften what they see as a protectionist stance on clean energy. But the talks didn’t yield any concrete changes. EU officials will meet this week to discuss details of the Green Deal Industrial Plan, a set of policies the Commission proposed last week to counteract the Inflation Reduction Act and convince European companies not to jump ship to the U.S. But while the region has long seen itself as a leader on fighting climate change, its economic and political realities may leave it on the back foot for now. (Semafor)
Australia sheds climate pariah status to make up with Europe. Australia was, until recently, an international pariah on climate change and a punchline in Brussels. But a new government in Canberra coupled with Europe’s energy and economic woes mean a better relationship is now emerging — one that could fuel Europe’s transition to a clean economy, while enriching Australia immensely. “Europe is energy hungry and capital rich, Australia's energy rich and capital hungry, and that means that there's a lot that we can do together,” said Australia’s Minister for Climate Change and Energy Chris Bowen. (Politico)
The IOC pushed back against the mayor of Paris, insisting there were no plans for “a Russian or Belarusian delegation” at the 2024 Games while also acknowledging some athletes from those countries could be welcomed. The IOC statement came a day after Paris Mayor Anne Hidalgo said no Russians or Belarusians should be allowed to compete at next year’s Olympics because of their involvement in the war in Ukraine. Olympic leaders have set out a path for athletes from Russia and Belarus who have not actively supported the war to try to qualify and compete as “neutral athletes” without a national identity such as team uniforms, flags and anthems. (Associated Press)
Texas Tech reviews its hiring practices as efforts to promote diversity come under fire: Texas Tech’s review comes as Gov. Greg Abbott has instructed state agencies and public universities that “forbidden DEI initiatives” violate federal and state employment discrimination laws. (Texas Tribune)
A bill banning Chinese citizens from buying property has some wondering if they’re welcome in Texas. (Los Angeles Times)
Birth rates increased among women ages 25 and up — especially among those in their mid-to-late-30s — during the second year of the pandemic, according to final data released recently by the CDC. It bucks the trend of declining births almost every year since 2007. The number of births declined an average of 2% a year between 2007 and 2013. They rose briefly in 2014 before falling again, and declined 4% in 2020, the first year of the pandemic. There were about 3.7 million births in the U.S. in 2021, up 1% over 2020. Birth rates rose 2% to 5% for women aged 25–44. They rose most significantly (5%) among women ages 35-39. (Axios)
New Ring Discovered Around Small, Icy World in Our Solar System: The ring—encircling a Pluto-like object named Quaoar—is unusually far from its parent body. Billions of miles away, in a distant part of our solar system, astronomers have found a new ring orbiting a small, icy world. But this newly discovered ring is unlike the telltale halos of ice and dust that orbit planets such as Saturn and Jupiter in a key aspect—it is unusually far from its host body, according to a study published Wednesday in the journal Nature. “It is a factor of two further out than what was previously recognized as the limit for how far a ring system can exist around a parent body,” said Vikram Dhillon, a professor of astrophysics at the University of Sheffield in the U.K. and co-author of the new study. He added that the finding seriously challenges existing theories about ring formation in our corner of the cosmos. (Wall Street Journal)
Economy
Raising money on Wall Street has become cheaper and easier despite the Federal Reserve lifting interest rates to the highest level in 15 years, suggesting an ongoing and deep disconnect between investors and central bank officials. Measures of financial conditions — the ease with which companies can access funding — have tumbled in recent months, with one closely watched index returning to the level it was at shortly after the Fed started raising rates last March. The divergence has led some investors to caution that the Fed faces a serious communications challenge that could threaten its efforts to keep inflation under control. However, with Fed chair Jay Powell declining two opportunities over the past week to push back on the market exuberance, others are taking his silence as a sign of the central bank’s growing confidence that it is winning its battle to tame inflation. (Financial Times)
Surprise Used-Car Price Jump Adds to Fed’s Inflation Worries. (Bloomberg)
JP Morgan cut hundreds of mortgage employees this week, adding to job losses across the industry as home-lending businesses continue to be hurt by elevated interest rates. The reductions are tied to lower industry volumes and included some managers. JPMorgan’s mortgage-origination volume slumped 60% last year as Federal Reserve rate hikes cooled a pandemic-era boom. (Bloomberg)
JPMorgan Chase CEO Jamie Dimon cautioned against declaring victory against inflation too early, warning the Federal Reserve could raise interest rates above the 5% mark if higher prices ended up "sticky." (Reuters)
New White House wage figures suggest labor-cost pressures are easing in the parts of the economy where the Federal Reserve is most concerned about inflation. Fed Chair Jerome Powell said recently he is analyzing inflation pressures by focusing on prices for services other than housing, which includes things such as haircuts, dining out and visits to the dentist. That excludes prices for goods, food, energy and housing, the categories most distorted by the pandemic. (Wall Street Journal)
Corporate bonds have leapt out of the starting gate to begin 2023, a salve to investors who suffered double-digit losses last year. Company bond prices have climbed and their yields have declined, particularly in relation to those on low-risk government notes. That reflects traders’ improving conviction that businesses will withstand any coming economic downturn with limited stress. The gains have erased a portion of last year’s miserable results for fixed-income markets, which cracked many long-held Wall Street strategies for ensuring stability in investors’ portfolios. (Wall Street Journal)
The world’s biggest shipper, Denmark’s A.P. Moeller-Maersk, said Wednesday that 2022 was its most profitable year in “the history of the company” but warned that a plunge in container volumes and freight rates would lead to a drop in earnings this year. Full-year revenue increased by 32%, to $81.5 billion from $61.8 billion in 2021. In the last three months of the year, revenue of $17.8 billion dropped from $18.5 billion in the same period in 2021. Profits before taxes for 2022 came in at $30.2 billion, up from $18.7 billion in 2021. In the fourth quarter, they landed at $5.3 billion, down from $6.3 billion in the fourth quarter a year earlier. (Associated Press)
U.S. explores working with India to increase economic competition against China: Commerce Secretary Gina Raimondo will travel to India in March to discuss collaborating on making semiconductor chips. The Commerce Secretary said India is making “a lot of the right moves,” despite continuing to purchase Russian oil. India must comply with rule of law labor standards before any deal with the U.S. can be reached, said Raimondo. (CNBC)
Technology
Alphabet shares dive after Google AI chatbot Bard flubs answer in ad: Alphabet lost $100 billion in market value on Wednesday after its new chatbot shared inaccurate information in a promotional video and a company event failed to dazzle, feeding worries that the Google parent is losing ground to rival Microsoft. Alphabet shares, which slid as much as 9% during regular trading, were flat after hours. Microsoft shares rose around 3% before paring gains. In the advertisement, Bard is given the prompt: "What new discoveries from the James Webb Space Telescope (JWST) can I tell my 9-year old about?" Bard responds with a number of answers, including one suggesting the JWST was used to take the very first pictures of a planet outside the Earth's solar system, or exoplanets. The first pictures of exoplanets were, however, taken by the European Southern Observatory's Very Large Telescope (VLT) in 2004, as confirmed by NASA. (Reuters)
In an interview with the Financial Times, Microsoft chief executive Satya Nadella made clear his company was prepared to use the new technology to drive down profits in search and that gross margin was “going to drop forever”. “There is such margin in search, which for us is incremental. For Google it’s not, they have to defend it all,” he added, referring to the competition against Google as “asymmetric”. (Financial Times)
Google is still drip-feeding AI into search, Maps, and Translate. (The Verge)
Disney chief executive Bob Iger announced plans to cut the company’s workforce by 7,000, or about 3%, as part of a broad restructuring that he said would save $5.5bn over the next few years, revive its creative output and make its streaming business profitable. Investors have been waiting to hear Iger’s strategic plan to reinvigorate the company since his surprise reappointment in November. In a statement, he said Disney was “embarking on a significant transformation” that would lead to “sustained growth and profitability” in streaming. Disney shares jumped 9% in after-hours trading following the announcement. (Financial Times)
Microsoft’s $69 billion acquisition of Activision Blizzard will harm competition in the UK gaming market, Britain’s antitrust watchdog provisionally warned, saying it could force the selloff of the blockbuster Call of Duty franchise. The Competition and Markets Authority said it took an initial view that the deal could result in a substantial lessening in competition, higher prices, fewer choices or less innovation for UK gamers. The provisional view throws into question the viability of the deal that’s already under attack from the US regulator over fears Microsoft could make it harder for rival platforms to access Activision’s most popular titles. (Bloomberg)
Activision CEO Bobby Kotick says the UK could lose out on thousands of jobs by blocking Microsoft's acquisition and accuses Sony of “trying to sabotage” the bid. (Financial Times)
WarnerBros. Discovery plans to keep Discovery+ as a stand-alone streaming service, a strategy shift for a company that had planned to consolidate content in a single subscription app. The move comes as Warner Discovery is close to launching a new, yet-to-be named supersize streaming service amid increased competition and in an uncertain economic environment. Instead of combining HBO Max and Discovery+ in their entirety, the new platform will feature HBO Max content and most Discovery+ content, with Discovery+ remaining available as a stand-alone option. The decision to keep Discovery+ is part of an effort to avoid risking losing a significant chunk of the app’s 20 million subscribers who might not want to pay the higher price to access that content. (Wall Street Journal)
Netflix rolls out its long-anticipated password sharing rules in Canada, New Zealand, Portugal, and Spain; other countries will be added in the next few months. (Canadian Press)
Smart Links
Apple Hires Its First People Officer in Executive Reshuffle. (Bloomberg)
Four in Five Gen Z Workers Want to Move Jobs This Year. (Bloomberg)
Peru unrest threatens copper supply. (Financial Times)
NYC Wealth Exodus Drives Billionaire’s Bet on South Florida Boom. (Bloomberg)