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The World
The Dow declined 1,063 points in its worst day since 2020: The stock market took its biggest U-turn since the early days of the pandemic Thursday, with the Dow Jones Industrial Average posting its largest decline this year just 24 hours after its largest gain since 2020. The reversal wiped out the euphoria that reigned on Wall Street Wednesday in the wake of Federal Reserve Chairman Jerome Powell’s comment that the Fed wasn’t “actively considering” raising interest rates by 0.75 percentage point at a future meeting. With inflation at its highest level since the early 1980s, markets had been anticipating such an increase and the prospect of a slower rise in rates set off a furious buying spree in the late afternoon. (Wall Street Journal)
The Nasdaq fell 5%. The S&P 500 index also declined significantly, sliding 3.5% with more than 95% of the stocks in the benchmark ending lower. (Financial Times)
The 30-year fixed-rate average climbed to 5.27 percent with an average 0.9 point. It was 5.1 percent a week ago and 2.96 percent a year ago. The 30-year fixed average, which has n’t been this high since August 2009, has gone up more than a percentage point in just two months and more than two percentage points in the past year. (Washington Post)
Bitcoin slides below $37,000 as investors unwind risky bets. Ethereum fell 6.4% to $2,754.37. Of the top 30 cryptocurrencies listed by CoinDesk, 29 were down on the day. (Wall Street Journal)
Slovakia backs a proposed European Union embargo on Russian oil imports but needs a longer transition period until the end of 2025 to implement it. (Bloomberg)
Beijing shut scores of metro stations and bus routes and extended COVID-19 curbs on many public venues, focusing efforts to avoid the fate of Shanghai, where millions have been under strict lockdown for more than a month. The central city of Zhengzhou earlier also announced restrictions, joining dozens of big population centers under some form of lockdown. (Reuters)
Early English local election results showed Boris Johnson's Conservatives suffered early losses in a ballot held against the backdrop of a cost-of-living crisis and fines imposed on the Prime Minister for breaking his own COVID-19 lockdown rules. Early results showed the Conservative Party had lost 53 council seats. The main opposition Labour Party had gained 1 seat and the Liberal Democrats 27 seats. (Reuters)
A bipartisan super-majority of senators voted to endorse a Republican-led measure stating that any nuclear agreement with Tehran should also address Iran’s support for terrorism in the region, and that the U.S. should not lift sanctions on an elite branch of the Iranian military, the Islamic Revolutionary Guard Corps. While the measure itself was non-binding, the vote was hailed as a modest victory for Republicans who have pushed the Biden administration to walk away from the talks in Vienna, where a final deal has eluded negotiators. (Politico)
Goldman Sachs and JPMorgan Chase & Co. are discussing extending abortion benefits to cover travel. The finance giants could follow the lead of Citigroup and pay travel expenses for employees seeking to end pregnancies away from states with restrictive abortion laws. Some senior leaders remain wary of the growing criticism by Republican lawmakers. (Bloomberg)
Corporate America reacts with near silence to draft abortion ruling. Executives are reluctant to engage in one of the most divisive debates in US. (Financial Times)
Economy
Worker output fell 7.5% in the first quarter, the biggest decline since 1947. Meanwhile, the economy is expected to have added another 400,000 jobs in April, reflecting a very tight labor market. But economists say the number of new hires could start to slow from here. A slowdown might be welcome in light of fears that the labor market has become too hot and will only drive inflation higher -- and corporate profits potentially lower -- if wages keep rising. Recent government data show the labor shortage worsening, with the gap between job openings and available workers at a record 5.6 million in March. (CNBC)
‘Unretirement’ is becoming a hot new trend in the sizzling U.S. labor market. The level of workers who retired then came back a year later is running around 3.2%, just about where it was before the pandemic. (CNBC)
Boeing’s decision to leave Chicago is the latest blow to a U.S. city that already has seen its once-mighty economy battered by Covid-19 and crime. The planemaker said it will shift its headquarters to Arlington, Virginia, from Chicago, a move that would put Boeing near federal government decision-makers in Washington. (Bloomberg)
Tokyo consumer prices rise at fastest pace in 7 years. (Reuters)
Vast majority of organizations are facing extreme difficulty finding and retaining qualified workers. The Conference Board survey found that 84% of organizations hiring professional and office workers are struggling to find talent, an increase from 60% in April 2021. And the percent of organizations struggling to retain office workers more than doubled in the last year, from 28 to 64%. (The Conference Board)
49% of organizations are willing to hire fully virtual employees, up from only 8% prepandemic.
38% still prefer to hire remote employees who can occasionally commute into the office.
Just 4% of companies are requiring full-time, on-site work.
90% are now allowing hybrid work; 60% made working completely remotely optional.
Technology
Elon Musk is expected to serve as a temporary CEO of Twitter for a few months after he completes his $44 billion takeover of the social media company. (CNBC)
Tesla bull Ron Baron says Musk got an ‘incredibly cheap’ deal on Twitter. Meanwhile, Saudi Prince Alwaleed bin Talal Al Saud reverses course on Twitter for his ‘new friend’ Musk and agrees to roll his $1.9 billion stake into a privatized Twitter.(CNBC, Bloomberg)
The cost of Amazon’s ‘too much space’ problem: Amazon has carried out a massive physical expansion over the last two and a half years, adding more than 200 million square feet of new facilities and doubling its physical footprint as the company accelerated plans to grow its already sprawling distribution network in response to a surge of demand from homebound consumers. All that spending didn’t translate into more efficiency, though. Shipping and fulfillment costs now account for 35% of Amazon’s overall operating expenses, up from 28% in 2019, to the tune of roughly $40 billion last quarter. (For comparison, revenue for physical and digital product sales during the same period was around $56 billion.) And with online sales growth slowing following a pandemic-induced boom, Amazon’s hefty investment is turning into a drag on its bottom line. (The Information)
MIT engineers created a portable device that zaps seawater to make drinking water: A portable, solar-powered desalination device developed by MIT researchers can create potable drinking water with the push of a button. The device doesn’t rely on any filters like traditional desalination machines. Instead, it zaps the water with electric currents to remove minerals such as salt particles from the water. (Daily Beast)
Smart Links
U.S. recycles 5% of plastic waste. (Wall Street Journal)
Property taxes on U.S. homes rose to $328 billion in 2021. (Washington Post)
At 78, investor David Wright preps for ‘biggest bear market in my life.’ (Bloomberg)
White House instructs federal agencies to ramp up preparations over the next six months for quantum computers capable of breaking public-key cryptography. (The Record)
On Deck laid off 25% of its staff day after Cameo cut a quarter of its staff. (The Information)
Handheld device could painlessly identify skin cancers. (Stevens Institute of Technology)