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The World
Downbeat tech earnings send shudders through stocks: Facebook’s parent company shed more than $230 billion in market value — closing down 26% — a one-day loss that is the biggest ever for a U.S. company and increases pressure on a stock market long powered by technology shares. “The level of forgiveness has gone down,” said Daniel Genter, chief executive and chief investment officer at RNC Genter Capital Management. “When boards come to their shareholders to confess their sins, they’re just not going to be pardoned with one Hail Mary.” The Dow fell more than 500 points and the Nasdaq declined 3.7%. (Wall Street Journal)
Facebook said that the privacy change Apple made to its iOS operating system last year will decrease the social media company’s sales this year by about $10 billion. Facebook’s admission is the most concrete data point so far on the impact to the advertising industry of Apple’s App Tracking Transparency feature, which reduces targeting capabilities by limiting advertisers from accessing an iPhone user identifier. (CNBC)
Meta’s warning and its cratering stock price were reminders that even among tech giants, Apple holds extraordinary sway because of its control of the iPhone. And the tech industry received a clear notice that a long-planned shift in how people’s information may be used online was having a dramatic impact on Madison Avenue and internet companies that have spent years building businesses around selling ads. (New York Times)
On the other hand: Amazon said it made more than $31 billion in advertising last year, a huge feat for the tech giant, which for years kept the size of its budding ad empire under wraps. Amazon has one of the fastest-growing advertising businesses in the world. It now makes more money than Microsoft, Snapchat and Twitter combined on advertising annually. Snap shares rocketed 62% on first-ever quarterly net profit. (Axios, CNBC)
An optimistic China sought to awe the world during the 2008 Beijing Summer Olympic Games—and it did. With the country’s economy booming, and its global ties largely friendly, the timing was almost perfect. The Games opened to the beat of 2,008 drummers and the Olympic rings cast in fireworks over Beijing. Western countries, including the U.S., celebrated the competition as a chance to applaud China’s advances and nudge it toward the liberal world order, if not as a democratic country at least as a more capitalist one. China won accolades and the most gold medals. As host of the Winter Games, which open Friday, China is now a recognized superpower less interested in global validation and a lot less likely to get it. This time, nobody thinks the Olympics will change China. (Wall Street Journal)
US House Speaker Nancy Pelosi urged American athletes not to speak out on China’s human rights record while competing in the Beijing Winter Olympic and Paralympic Games, citing the risk of retaliation by the Chinese government. “You are there to compete; do not risk incurring the anger of the Chinese government because they are ruthless,” Pelosi said. Pelosi’s call followed a warning in January by a senior official in the Chinese organizing committee that participants whose actions or words violated Olympic rules or Chinese laws or regulations would be subject to “certain punishments.” (South China Morning Post)
Russia and China plan to bypass western sanctions by trading in each other’s currencies, President Putin has written in an article for China’s state news agency on the eve of his visit to Beijing. Putin will attend the opening ceremony of the Beijing Winter Olympics. (The Times)
The U.S. accused Russia of preparing to fabricate an attack by Ukraine or the west to use it as a pretext for an invasion of the country, including circulating a “propaganda video” with graphic images of a mock explosion. (Financial Times)
Boris Johnson is battling to save his premiership as four of his most senior aides left Downing Street and his chancellor publicly rebuked him. In the latest departures from Downing Street, Dan Rosenfield, Johnson’s chief of staff was said to be leaving his job as well as Martin Reynolds, his principal private secretary. Their resignations came just hours after Munira Mirza, Johnson’s head of policy, quit. Johnson’s director of communications, Jack Doyle, also tendered his resignation saying that “recent weeks have taken a terrible toll on my family life.” (The Times)
Hungary has frozen the prices of essential products such as milk, flour and sunflower oil as the cost of living climbs and a finely balanced election looms in two months’ time. The prices of seven items, including sugar, chicken breasts and pork legs, are now capped for three months at the level they reached in mid-October. Shops are also obliged to display signs crediting the government with holding down the cost of basic foodstuffs. (The Times)
More Belt and Road: For nearly a decade, Beijing has been investing heavily in middle- and low-income economies to boost China’s economic and political clout. The Belt and Road Initiative, one of the most ambitious infrastructure projects ever, is helping China expand its geopolitical reach and rival America’s influence in Asia, Latin America, Africa, and the Middle East. (GZERO Media)
NFL and SoFi Stadium officials joined with local health and elected officials to reiterate that masks must be worn by fans at the Super Bowl in Inglewood. (Los Angeles)
Sweden joined other European nations in saying it will remove coronavirus restrictions. "It is time to open Sweden again," said Prime Minister Magdalena Andersson, announcing the restrictions would be removed from Feb. 9. (Associated Press)
New Zealand will end its quarantine requirements for incoming travelers and reopen its borders. (Los Angeles Times)
A Canadian study predicted that by the end of the century, nine of the past 21 Winter Olympics cities might not be cold enough to reliably host downhill races, biathlons or halfpipe competitions. (Los Angeles Times)
Economy
January's market turmoil hit even the safest bond funds. Some of those that held up best strayed from their traditional investing grounds, or concentrated on the shortest maturities. Only a few U.S.-based funds that focus on investment-grade taxable debt have earned a positive return or traded flat through January, when including interest payments and price swings, according to data compiled by Morningstar Direct. More than 300 others posted total losses ranging from minus 0.1% to minus 3.6% over the same period. (Wall Street Journal)
The European Central Bank made no changes to benchmark lending rates despite inflation in the Eurozone topping 5.1 percent, a new record that defied expectations of a decrease. The bank insists the inflation will fade as the year goes on, but some experts worry consumer prices will stay stubbornly high over the long-term. (CNBC)
The Bank of England hiked rates in first back-to-back rise since 2004. Markets had broadly expected the 25 basis point rate increase, which takes the main Bank Rate to 0.5%, as the central bank strives to contain soaring inflation. (CNBC)
UK families will experience the biggest fall in living standards since records began, as energy bills were confirmed to rise by £700 per household. In a bleak assessment of the year ahead, the Bank of England warned that take-home pay would fall by five times the amount it did during financial crisis of 2008. (The Times)
Brazil’s central bank raised its benchmark lending rate to 10.75%. (Wall Street Journal)
Used-car prices may be starting to soften: For cars that are 1 to 3 years old — a category that has driven much of the price jump — the average cost is $41,121, down 2.1% from about $42,000 in early January. The price of 2019 models have slid by 2.5%, while 2020 vehicles are down 4.4%. At the same time, dealer inventories have risen 15% for 2019 cars and 22% for 2020 models. (CNBC)
The number of permanent store closures in the aftermath of the holiday shopping season has plummeted, compared to the same period last year. The plunge comes at a time when many stores historically close up shop, indicating the holiday season buoyed a sector that was facing an existential crisis earlier in the pandemic. Retailers announced 742 store closures Jan. 1–28, down 65% from the same period in 2021, according to a new report by Coresight Research, which tracks retail closings. (Axios)
Employees are leaving because they feel ignored: Dave MacLeod, the CEO and co-founder of ThoughtExchange, shared how leaders can gain better feedback from all their employees. ThoughtExchange is an enterprise tool that enables employers to solicit anonymous feedback from employees through open-ended questions. The goal is to help leaders make quicker unbiased decisions. MacLeod spoke with Protocol about the trends he’s seen in the questions leaders are asking and what action he thinks should come next to get employees to stick around: “People are leaving because they feel blatantly ignored, not unheard. Because everybody's tripling down on listening tools right now, but nobody's tripling down on action tools. What are we actually going to do about the fact that we just heard from everybody?” So what’s your favorite question for leaders to ask? “A new leader in a business just asked everyone, ‘I'm a new leader in the business. What do you want me to know?’ It's kind of mind bending, but it's also like, that's a really powerful question. And that's the same thing you'd ask somebody in the hallway. And we just had a global Fortune 50 CEO ask that across 50,000 people: ‘What do I need to know right now about the business?’” (Protocol)
Technology
Facebook is dying. The signs have been out there for a while, of course: slowing growth around the world, an increased focus on Instagram and WhatsApp and Messenger and then a hard pivot toward the metaverse. But all we saw until now was slow growth, not decline. Facebook lost daily users for the first time in its 18-year history — falling by about half a million users in the last three months of 2021, to 1.93 billion logging in each day. The loss was greatest in Africa and Latin America, suggesting that the company’s product is saturated globally — and that its long quest to add as many users as possible has peaked. (Source Code, Washington Post)
What’s behind the surge in funding to EV battery startups: EV battery startups—both hardware and software companies—raised more than $3.6 billion from venture investors last year, a massive surge compared to prior years. Investors say the increase is due to more deal flow, as well as interest in funding the next generation of technologies to power electric vehicles. We look at the companies and innovations getting funding. (Crunchbase)
Canva bought Flourish, a startup in London that helps people tell stories with data. The purchase comes as Canva looks to double the size of its workforce in Europe. (Bloomberg)
Toshiba to double power chip production with new plant in Japan — $870m fab set to debut by 2025. (Nikkei Asia Review)
Smart Links
U.S. oil prices top $90 a barrel for the first time since 2014. (CNBC)
Housing wealth is setting new records for both owners and sellers. (CNBC)
Amazon hikes Prime membership fees 17%. (Reuters)
L.A.’s minimum wage to rise to $16.04 in July. (Los Angeles Times)
Mercedes-Benz to build EVs in Thailand, in first for a major carmaker. (Nikkei Asia Review)
Michigan is finalizing a plan to build the first-ever wireless charging road for electric cars. (Fox2 Detroit)
Hiring alert: “The new hire who showed up is not the same person we interviewed.” (Ask A Manager)