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The World
Forecasters are increasingly optimistic about economic growth this year, though less so about the labor market’s prospects. Economists on average expected GDP to expand nearly 4.9% this year, an improvement from their 4.3% forecast in January. However, they were more cautious about the recovery in jobs, as WSJ and Reuters polls indicated it’s likely to take over a year for unemployment to fall to early 2020 levels. Another Reuters poll expects Britain's economy to reach pre-COVID-19 levels within two years. (Wall Street Journal, Reuters, Reuters-2)
China is threatening to outcompete the U.S. on infrastructure and public transport, President Biden said, as he sought support from lawmakers for a spending bill for U.S. upgrades. Biden pointed in particular to China’s extensive high-speed rail network and efforts to develop clean energy alternatives to power cars. The comments came after his first presidential call with Chinese leader Xi Jinping, where Biden pressed his counterpart on Beijing’s human rights record, its actions toward Taiwan and “coercive” economic practices. (South China Morning Post)
Taiwan’s government expressed its thanks to and “admiration” for Biden after he told X of his concerns about Beijing’s pressure against the island. (Reuters)
China and India are pulling back front-line troops from disputed portions of their mountain border where they have been in a standoff for months. (Associated Press)
The BBC’s World News television channel was banned from broadcasting in China a week after the UK’s media watchdog stripped Beijing’s state broadcaster of its license in Britain. The BBC said it was "disappointed" by the decision. (Financial Times, BBC News)
Biden will soon sign an executive order to identify "immediate actions" for mitigating the effects of a global semiconductor shortage hitting American industries hard. A surge in demand for consumer electronics during the pandemic has led to the shortage of chips, which has been exacerbated in the U.S. by sanctions on SMIC, the Chinese chipmaker. (Nikkei Asian Review, Financial Times)
The U.S. Treasury Department has designated "10 current and former military officials responsible for the Feb. 1, 2021 coup or associated with the Burmese military regime," including military chief Min Aung Hlaing, a move that triggers new sanctions in line with Biden's executive order. (Nikkei Asian Review)
Russian law enforcement agencies warned Russians not to take part in unsanctioned rallies as allies of jailed Kremlin critic Alexei Navalny prepared to stage a brief Valentine’s Day protest across Russia this weekend. Navalny ally Leonid Volkov has urged Russians to gather in residential courtyards near their homes for a protest on Sunday, shining their mobile phone torches and lighting candles in heart shapes. Meanwhile, Navalny’s wife flew to Germany as his allies in Moscow come under pressure from the Kremlin’s security services. (Reuters, The Times)
Tokyo 2020 Olympics chief Yoshiro Mori is expected to resign today over his sexist comments, with the mayor of the Olympic village Saburo Kawabuchi saying Mori had asked him to take over. (Reuters)
House managers wrapped up their case against former president Trump, imploring the Senate to convict him while warning that he could stoke violence again. Trump’s legal team is poised to respond today, arguing that he should be acquitted. They are expected to use only one of two allotted days. A verdict could come as early as the weekend. (Washington Post)
Transportation officials cut the first phase of the California bullet train — a 171-mile link in the Central Valley — to a single track as its estimated cost has risen by $2 billion. (Los Angeles Times)
While the daily rolling average of Covid cases has fallen 50% from its peak in early January, half of the 465,000+ U.S. deaths have come since Nov. 1. The next question: is the current falling U.S. case count simply a calm before a variant-driven storm? Meanwhile, AstraZeneca predicts it will be able to modify the its vaccine to protect against new variants in time for autumn. (New York Times, STAT News, The Times)
European office workers don’t expect to return before summer, according to a new survey of 5 countries. Germany will extend restrictions to curb the spread of the coronavirus until March 7, though schools and hair salons may open sooner. (The Guardian, Reuters)
President Biden said the U.S. has struck deals to purchase 200 million more Covid-19 vaccine doses — increasing supply by 50%. Meanwhile, two-thirds of Americans say they are not satisfied with the way the vaccination process is going in the U.S. Still, 71% of Americans are now willing to be vaccinated, up from 65% in late December and the highest recorded since July. (Wall Street Journal, Gallup)
Economy
Private-equity firms have generated 29% of global deal activity this year, measured by value, up from 24% in the year-earlier period. Meanwhile, U.K. financial-technology startups are raising fresh investment cash at a fast clip, a boost for London — now the largest market for fintechs outside the U.S. — as it tries to remain a global financial center post-Brexit. (Wall Street Journal, Wall Street Journal-2)
U.S. home prices are rising at an accelerating pace, as the strongest housing boom in more than a decade is boosting home values from major metro areas to small cities and vacation spots. The median sales price for existing homes in each of more than 180 metro areas in 4Q20 from a year earlier, marking the first time annual price increases have been achieved in back-to-back quarters. The biggest home-price gainers in the fourth quarter were in the Northeast. (Wall Street Journal)
Average rent for a 2-bedroom apartment in Bozeman, MT hit $2,050 a month in early February, a 58% surge from a year earlier. The cost of a home also jumped by almost 50%. (City Lab)
Mastercard is preparing to support cryptocurrencies directly on its network this year, as the company follows the rise of digital assets. The company is seeing more people using cards to buy crypto assets such as Bitcoin, as well as more people using crypto cards to access and convert these assets into traditional currencies for spending. (Wall Street Journal)
Bitcoin resumed its record run after America’s oldest bank, Bank of New York Mellon, became the latest leading Wall Street institution to embrace the world’s largest cryptocurrency. Bitcoin’s value rose 6.2% to $47,820. (The Times)
China is winning the digital currency war with the U.S. (The Information)
More Brexit pain: Trading in a key euro-denominated derivatives market flooded out of London last month to rival financial centers in New York, Amsterdam and Paris, in the latest evidence of the blow dealt by Brexit to the UK financial centre. The trading of euro-denominated swaps in London dropped from nearly 40% of the market last July to 10% in January. (Financial Times)
Bumble shares closed up 63.5% in its IPO and closed trading with a market cap of about $7.7 billion. On Bumble, founded in 2014 by CEO Whitney Wolfe Herd, women have to initiate the first conversation for heterosexual matches. At 31, Wolfe Herd is the youngest female founder to take a U.S. company public. (CNBC)
AI Employment Hiring Audits: If you apply to McDonald’s, Boston Consulting Group, Kraft Heinz, or Colgate-Palmolive, you might be asked to play games that are designed to measure certain traits, including generosity, fairness, and attention. If your personality profile reflects the traits most specific to people who are successful in the role, you advance to the next hiring stage. More and more companies are using such AI-based hiring tools to manage the flood of applications they receive—especially now that there are roughly twice as many jobless workers in the US as before the pandemic. As with other AI applications, though, researchers have found that some hiring tools produce biased results—inadvertently favoring men or people from certain socioeconomic backgrounds, for instance. Many are now advocating for greater transparency and more regulation. (MIT Technology Review)
Technology
North Dakota takes on Big Tech: The bill that's scaring Apple right now is SB 2333. The bill demands every platform allow people to install and pay for apps in other ways. Just two pages long, it says a "digital application distribution platform" that does more than $10 million in revenue each year in North Dakota — that's every major app store — cannot:
"Require a developer to use a digital application distribution platform or digital transaction platform as the exclusive mode of distributing a digital product."
"Require a developer to use an in-application payment system as the exclusive mode of accepting payment from a user to download a software application or purchase a digital or physical product through a software application."
"Retaliate against a developer for choosing to use an alternative application store or in-application payment system."
P.S. There's a similar bill under consideration in Arizona, SB 1642, which argues for the exact same thing as the North Dakota bill in almost the exact same way. (Source Code, SB 2333)
A few years ago, Amazon released a cloud service that used some of the same software smarts behind Alexa to automate customer service call centers for other companies. Amazon’s senior leaders were so bullish on the service, called Amazon Connect, that they made an internal forecast that it could reach $1 billion in annual sales within five years, or by March 2022. While it could be challenging to meet that goal, the company's cloud unit, Amazon Web Services, could pull it off by the end of 2022 if Connect continues its sales growth rate from last year. That's because Connect sales grew about 150% to roughly $175 million in 2020 compared to 2019. (The Information)
Microsoft President Brad Smith said the U.S. and other countries should consider adopting media rules like those Australia is poised to soon enact to force tech companies to pay publishers for content. Both Facebook and Google have said they can't run their businesses as usual with the code in effect and warn that if Australia passes it as expected, they'll pull some of their services from the country. (Axios)
Disney says it now has 94.9 million Disney+ subscribers. Disney+ exceeded the company’s initial subscriber goal of 60 million to 90 million by 2024 back in November. The company now expects Disney+ will have 230 million to 260 million subscribers by 2024. (CNBC)
Bloomberg News to lay off about 90 editorial employees. (Financial Times)
Apple Is the $2.3 Trillion Fortress That Tim Cook Built: Joe Biden had a question for Tim Cook: Why, the then-vice president wanted to know, couldn’t Apple make the iPhone in the U.S.? It was January 2012, during President Barack Obama’s reelection campaign and three months after the death of Cook’s predecessor, Steve Jobs. Biden was in Palo Alto for a dinner meeting with Cook and a group of tech leaders that included Netflix Chief Executive Officer Reed Hastings, Google Executive Chairman Eric Schmidt, and Facebook Chief Operating Officer Sheryl Sandberg. As everyone at the dinner well knew, the idea of mass-producing an iPhone, or any advanced consumer electronics, in a domestic factory was an exceptionally tall order. The big Asian contract manufacturers, especially Apple Inc.’s main partner, Foxconn, had built city-size factories in China with armies of hundreds of thousands of skilled laborers. None of that scale existed in the U.S. Chinese factory employees generally worked much longer hours, for a fraction of what even the lowest-paid American workers make. “I’m not sure, short of dictatorial practices, that you could ever make that work,” says John Riccitiello, another Silicon Valley executive who witnessed the exchange between Cook and Biden. (Bloomberg Businessweek)
Smart Links
Is ESG becoming the new normal around the world? (Private Equity News)
IRS says there are no plans to extend tax-filing deadline beyond April 15. (CNBC)
Why the future of UAE logistics is bright. (Khaleej Times)
Return to the office? Companies increasingly are looking at Labor Day. (Wall Street Journal)
How COVID experiences will reshape the workplace. (Harvard Business School)
Consumer spending in top 100 subscription apps climbed 34% to $13 billion in 2020. (SensorTower)
U.S. toy sales rose 16% last year to more than $25 billion. (Wall Street Journal)
Learn More (Today, 1 pm): GLOBAL FOOD+ 2021 is a joint webinar series run by researchers at Boston University, Harvard, MIT, and Tufts. Each session features 10 rapid-fire 7 minute “speed talks,” given by top scholars and researchers presenting their most recent research findings on food, including its links to agriculture, health, the environment, and society. (Register)