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The World
Russian President Vladimir Putin ordered the deployment of troops to two breakaway regions in eastern Ukraine after recognizing them as independent, accelerating a crisis the West fears could unleash a major war. A Reuters witness saw tanks and other military hardware moving through the separatist-controlled city of Donetsk after Putin issued a decree recognizing the breakaway regions and told Russia's defense ministry to send in forces to "keep the peace". (Reuters)
Kiev denounced a violation of its sovereignty, while the UN Security Council met into the night. The EU and U.S. are promising sanctions after weeks of attempts to find a diplomatic solution. (Le Monde)
Russian stocks plummeted in turbulent trading, on mounting concern that Moscow could soon launch an invasion of Ukraine. The Moex index closed the main trading session down 10.5% in the biggest one-day fall since Russia seized Crimea in 2014. (Financial Times)
Oil jumped to a seven-year high, safe-havens rallied and U.S. stock futures dived on Tuesday as Europe's eastern flank stood on the brink of war after Russian President Vladimir Putin ordered troops into breakaway regions of eastern Ukraine. Brent crude futures rose 4% to $97.35, their highest since September 2014. S&P 500 futures fell 2% and Nasdaq futures fell 2.7%. European equities dropped 1.3% overnight to a four-month low. (Reuters)
What are the Donetsk and Luhansk people’s republics? Self-proclaimed but almost wholly reliant on the Kremlin for support, Donetsk and Luhansk people’s republics declared independence from Kyiv in April 2014 after Russia-backed militias seized control of local government offices and other infrastructure following Moscow’s invasion of Crimea. Bordering Russia on Ukraine’s eastern flank, the largely Russian-speaking regions are home to more than 3mn people and have received large amounts of financial, humanitarian and military assistance from the Kremlin. Moscow’s support for the regions came after the pro-western Maidan movement toppled Ukraine’s pro-Russian president in February 2014. (Financial Times)
Video: 'The Minsk process is dead.' (Deutsche Welle)
South Korean Attitudes on Nuclear Weapons: Support for nuclear weapons is robust, with 71 percent in favor of South Korea developing its own nuclear weapons, while 56 percent support a deployment of US nuclear weapons in South Korea. However, when asked to choose between these two options, the public overwhelmingly prefer an independent arsenal (67%) over US deployment (9%). Interestingly, 40 percent oppose US deployment, while just 26 percent oppose a domestic nuclear arsenal
Public attitudes on nuclear weapons do not strongly align with rationales for armament offered by some South Korean politicians and analysts. Six in ten (61%) remain confident the United States will defend South Korea in a conflict with North Korea. (The Chicago Council)
The U.S. and Japan vowed cooperation with South Korea in responding to North Korea's recent missile tests, reflecting Washington's concern over strained ties between Tokyo and Seoul. Meanwhile a key UN vacancy could undermine investigations into DPRK sanctions-busting, as the lack of American on the UN Panel of Experts could give China and Russia freer hand to shape an upcoming report. (Nikkei Asia Review, NK News)
Spurred by the highest oil prices in years, shale companies are moving drilling rigs back into oil fields that were all but abandoned a few years ago. Oil production in these marginal regions isn’t expected to move the needle in the global market, which is facing tight supplies, but it could help some oil producers who have lost money in past years. Output in the contiguous U.S. by year-end is expected to increase almost solely from the Permian Basin of West Texas and New Mexico, offset by declines elsewhere. (Wall Street Journal)
Boris Johnson overruled his health secretary as he told the nation to treat the virus like flu. The prime minister said it was “time that we got our confidence back” as he confirmed that all Covid-19 laws would end in England on Thursday. People will no longer be legally required to isolate after a positive test but will still be advised to stay at home. (The Times)
Got a Covid booster? You probably won’t need another for a long time. A flurry of new studies suggest that several parts of the immune system can mount a sustained, potent response to any coronavirus variant. “We’re starting to see now diminishing returns on the number of additional doses,” said John Wherry, director of the Institute for immunology at the University of Pennsylvania. Although people over 65 or at high risk of illness may benefit from a fourth vaccine dose, it may be unnecessary for most people, he added. (New York Times)
The IRS said it would allow taxpayers to opt out of using facial recognition technology to gain access to their online accounts and would shift to an entirely different identity verification system next year as the agency tries to alleviate backlash over its use of biometric data. The agency said it would allow taxpayers to authenticate their accounts with a live, virtual interview. (New York Times)
Economy
White-collar professionals are reaping big pay gains as worker bargaining power spreads across the U.S. economy and shows early signs of durability. Pay for finance, information and professional employees rose 4.4% in January from a year earlier, outpacing 4% wage growth for all workers, according to the Atlanta Fed’s wage tracker. Workers in higher-wage sectors experienced the fastest month-over-month earnings growth in January, Labor Department data showed. Wages in the professional and business services sector—which includes jobs in management, law and engineering—rose 0.8% in January from a month earlier. That was well above a 0.1% wage increase in leisure and hospitality. (Wall Street Journal)
Canary Wharf launches flexible office service as work patterns shift: London landlord is changing its portfolio as employers find they need fewer desks with staff working from home. (Financial Times)
Investors pulled nearly $160 billion from money-market funds and $17.5 billion from bond mutual funds and ETFs in the first seven weeks of the year. The exodus is already on pace to be the biggest in at least seven years. About $50 billion was funneled into stock funds over that period, including nearly $21 billion so far this month. The massive reshuffling of assets comes in the midst of a changing economic and monetary landscape. (Wall Street Journal)
Europe’s companies languish in slow lane as US dominates corporate landscape: Europe’s fragmented single market is like an obstacle course, relegating the region’s companies to also-rans in the global race for growth. The failure to harmonize the rules inside the trading bloc has allowed US companies to take the lead in the growth stakes, say some of the continent’s leading industrialists. A patchwork of regulations is stifling innovation and expansion, they believe. “There are so many obstacles and barriers that are making it hard to grow,” said Carl-Henric Svanberg, chair of the influential Brussels-based European Round Table for Industry, which brings together leaders of 60 of the continent’s biggest industrial and technology companies. He said the US economy grew far more strongly than Europe in the decade between 2008 and 2018. US cumulative real growth was close to 19%, against 11.4% for the EU, including the UK. “The price we pay for not realizing that growth is huge,” added Svanberg, who is also chair of Sweden’s AB Volvo and has led European giants such as Ericsson and BP. (Financial Times)
Technology
Amazon’s sprawling grocery business has become an ‘expensive hobby’ with a cloudy future: despite Amazon’s unquestioned dominance in e-commerce, one giant market has proven particularly vexing: groceries. Amazon has introduced a dizzying array of services — Prime Now, Fresh, Go and others — in its effort to become a giant in the $750 billion U.S. grocery market. In 2017, it spent $13.7 billion to acquire Whole Foods, a price tag more than 10 times higher than Amazon had paid in any prior deal. Still, it’s just a niche player in the industry. As of mid-December, Amazon and Whole Foods accounted for a combined 2.4% of the grocery market over the past 12 months, while Walmart controlled 18%. Amazon’s delivery services have struggled to stand out in a crowded field, while the Go automated convenience stores have been deprioritized, according to people familiar with the company’s strategy. (CNBC)
Chinese authorities said the country’s online food-delivery platforms should reduce the fees they charge businesses, sending shares of industry giant Meituan plummeting to their lowest level in more than a year. Meituan, one of China’s most valuable internet-platform companies, operates a mobile app that hundreds of millions of people use to order food. Its shares tumbled 15% in Friday afternoon trading in Hong Kong to their lowest close since July 2020. The drop shaved $26 billion off Meituan’s market capitalization. Meituan has lost more than half its value over the past year following Beijing’s wide-ranging crackdown on internet-technology companies. (Wall Street Journal)
Virgin Hyperloop has made almost half its staff redundant as the company developing the high-speed transport system pivots from passenger travel to freight. The US company said 111 people were laid off on Friday as it refocuses on delivering a cargo version of the experimental transport system, which propels pods through low-pressure tubes at speeds of up to 670mph. (Financial Times)
HR experts, industry execs, and government officials in Taiwan say the current chip talent shortage on the island is the most serious they have ever seen. (Nikkei Asia Review)
Tencent shares fell 5.2% as Chinese tech stocks had their worst two-day drop since July 2021, amid fears of impending Chinese regulatory crackdowns. (Bloomberg)
Live Event
Today, 7 pm ET: The Crisis in Ukraine: A Conversation with former U.S. Ambassador to Ukraine Bill Taylor. (Register: Cornell University)
Smart Links
Yale Law School to cover full tuition and fees for lowest-income students. (Wall Street Journal)
Most Americans put their pandemic checks in the bank: Study. (MIT Sloan)
Stay Interviews: Quitting can be contagious at a company. Here’s how to stop it. (Wall Street Journal)
Crypto enthusiasts are trying to raise $4 billion to buy the Denver Broncos. (CNBC)
Pushing boundaries: the rise of German business schools. (Financial Times)
Medina Spirit's 2021 Kentucky Derby win has been nullified and horse trainer Bob Baffert is suspended. (CNN)