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The World
Benjamin Netanyahu rejected calls for a ceasefire in Gaza, saying it would be a “surrender to Hamas.” Netanyahu said the U.S. would not have accepted a ceasefire after Pearl Harbor or 9/11, and added, “The Bible says that there is a time for peace and a time for war. This is a time for war.” (Semafor)
Mossad Director David Barnea met with senior Qatari officials in Doha over the weekend “to discuss their efforts in trying to secure the release of the more than 235 Israeli and foreign nationals who were taken hostage and brought to Gaza.” (Axios)
U.S. House of Representatives Republicans introduced a plan to provide $14.3 billion in aid to Israel by cutting funding for the Internal Revenue Service, setting up a showdown with Democrats who control the Senate. In one of the first major policy actions under new House Speaker Mike Johnson, House Republicans unveiled a standalone supplemental spending bill only for Israel, despite Democratic President Joe Biden's request for a $106 billion package that would include aid for Israel, Ukraine and border security. (Reuters)
U.S. and Chinese defense officials “met briefly at a multilateral security forum in Beijing to discuss communication between the countries' militaries.” Cynthia Carras, principal director for China, Taiwan, and Mongolia at the Defense Department, spoke with Chinese Defense Ministry spokesperson Wu at the Beijing Xiangshan Forum. According to Chinese state media, Wu “urged the U.S. side to create a favorable atmosphere for communication between American and Chinese armed forces.” (Nikkei Asia)
President Biden has announced a $1.3 billion federal investment to build three new interstate power lines that will cross through Arizona, Nevada, New Hampshire, New Mexico, Utah, and Vermont. The investment is part of a push to upgrade the nation’s “outdated electric grid and transition it to clean energy.” (CNBC)
“Officials warned that money won’t be enough.” The Energy Department says in a new report that the nation’s “vast network of transmission lines may need to expand by two-thirds or more by 2035” to meet Biden’s clean energy goals. (New York Times)
One of the Education Department’s loan servicing companies “failed to send timely billing statements to 2.5 million borrowers over the past month, resulting in hundreds of thousands of borrowers missing their payments.” The servicing errors by the Missouri Higher Education Loan Authority (MOHELA) “were so serious, officials said, that the department would withhold $7.2 million of compensation due to the company for October.” (Politico)
Strip Malls Are the New King of Retail Real Estate: People who previously drove straight to the office after school drop-off are now grabbing a coffee or running errands on their way home to hop on video calls. Others are visiting FedEx and UPS more frequently to mail back items bought online. And the rise of food-delivery services has increased the desirability of retail that is close to the road and allows drivers quick and easy access. “The faster you can get in and out, that’s what the American customer wants,” said David Lukes, president and chief executive of SITE Centers. Strip malls—rows of small shops built close to the road that are also known as convenience properties—have flown under the radar in recent years as investors gobbled up shopping centers anchored by grocery stores. Now, increasing foot traffic and declining vacancy rates show these properties don’t need large anchors to draw in customers and tenants. (Wall Street Journal)
Goldman Sachs no longer sees U.S. govt shutdown in 2023: Goldman Sachs removed its forecast for a U.S. government shutdown this year given new geopolitical risks and the election of a speaker at the House of Representatives, but warned of risks in 2024. The brokerage's previous base case was for a shutdown for up to 2-3 weeks in the current quarter ended December, which now seems "much less likely", Goldman Sachs economists led by Jan Hatzius said. (Reuters)
Economy
“Crude prices could rise to more than $150 a barrel if the conflict in the Middle East escalates, the World Bank warned.” The bank’s quarterly Commodities Markets Outlook projects a decline from $90 per barrel in the current quarter to $81 per barrel next year, but warns that in a worst-case scenario, global oil supply could shrink by as much as eight million barrels per day, “sending prices to between $140 and $157 a barrel.” World Bank Chief Economist Indermit Gill said, “The latest conflict in the Middle East comes on the heels of the biggest shock to commodity markets since the 1970s — Russia’s war with Ukraine.” (Financial Times)
Federal Reserve officials “have said for more than a year that beating inflation could require them to hold interest rates higher for longer than investors expected,” and “the swift run-up in long-term Treasury yields” suggests markets agree. Borrowing costs are now “rising in ways that could allow the Fed to suspend its historic run of interest-rate increases.” (Wall Street Journal)
General Motors and the United Auto Workers have reached a tentative agreement, “effectively ending the first simultaneous strike against the Detroit Three automakers with record wage and benefit hikes.” Nearly 50,000 workers joined in an escalating series of strikes against Ford, GM, and Stellantis that began six weeks ago. (Reuters)
Despite the coming end of the strikes, “the car companies aren’t in a celebratory mood,” since their labor-cost disadvantage to rivals such as Toyota and Tesla is set to grow. Right now, the Big Three’s cost per hour on wages and benefits “is in the mid-$60s, compared with an estimated $45-$55 for Tesla and foreign automakers. By the end of the four-year contract, the Detroit companies’ costs would balloon to $87 to $90 per hour.” (Wall Street Journal)
The victorious UAW is now “looking beyond the Motor City to car companies operating nonunion factories across the South.” UAW President Shawn Fain said that the union “planned a push to organize plants at some of the nonunion automakers, such as Toyota, Honda and Tesla.” He said, “When we return to the bargaining table in 2028, it won’t just be with the Big Three. It will be the Big Five or Big Six.” (New York Times)
Employees at CVS and Walgreens “are staging a new series of walkouts across the country to demand the companies fix what employees say are harsh working conditions.” Workers are the two chains “are mostly not unionized, which makes a largescale walkout difficult to execute.” (CNN)
“Organizers have not provided an estimate of the walkout’s scale, either by the number of affected stores or participating employees. A Walgreens spokesman said only two of the retailer’s roughly 9,000 stores had been affected” as of mid-morning. (Washington Post)
Mortgage lenders are trying to entice prospective homebuyers to sign off on mortgage rates near eight percent by promising to let them refinance later at no charge. Closing costs on a mortgage refinance for a single-family home averaged $2,375 in 2021. (Wall Street Journal)
Technology
President Biden has issued an executive order on AI “that outlines the federal government's first comprehensive regulations on generative AI systems. The order includes testing mandates for advanced AI models to ensure they can't be used for creating weapons, suggestions for watermarking AI-generated media, and provisions addressing privacy and job displacement.” (Ars Technica)
Under the order, the Health and Human Services Department “will set up a program to receive reports of unsafe health practices involving AI,” and the Labor Department and White House Council of Economic Advisers “are required to study the potential impact of AI on the labor market and develop ways to support affected workers.” The Commerce Department will also “produce guidelines for watermarks that can be used to label photos and videos produced by generative AI tools in order to help root out deepfakes, though companies will not be required to use them.” (Semafor)
Alphabet CEO Sundar Pichai “conceded that agreements making Google’s search engine the default on smartphones and browsers can be ‘very valuable’” as he “took the witness stand in the most significant monopoly trial in 25 years.” (Financial Times)
A Justice Department attorney questioned Pichai about “an internal Google memo in December 2018 outlining Pichai’s latest meeting with Apple CEO Tim Cook. The memo summarized Cook’s hope for the two companies to be ‘deep deep partners, deeply connected where our services end and yours begin.’” But Pichai “pushed back on the idea that their multibillion-dollar search deal had foreclosed competition between the two tech giants, saying that part of the memo was specifically about Google search in Apple’s Safari browser.” (Washington Post)
Meta is launching a paid subscription plan in Europe that will remove ads from Facebook and Instagram. “The service is available throughout the European Union and will be offered for around €9.99 per month on the web or €12.99/month on iOS and Android.” The subscription plan is meant to address EU concerns about Meta’s ad targeting and data collection practices. (The Verge)
Meta will also stop showing ads to all EU users under age 18 without requiring payment. (Wall Street Journal)
Panasonic says it is “slashing domestic electric battery production by 60% due to slower than expected sales of some models to key client Tesla.” The move comes as Panasonic announced a record net profit of $1.9 billion “for the six months through September, helped by a hefty subsidy for its EV battery business in the U.S.” (Nikkei Asia)
“Shares of Tesla fell about 5% on Monday after key supplier Panasonic Holdings said it cut automotive battery production.” (Reuters)
Two out of five Americans “don't know about federal subsidies up to $7,500 for buying electric vehicles. Just 22% know a ‘great deal’ or ‘good amount’ about the credit,” according to a BlueLabs Analytics survey. While 56% of Democrats “say they will or might choose an EV” for their next purchase or lease, only 19% of Republicans say so. (Axios)
Smart Links
Putin wants to know why Russia can only build 40 satellites a year. (Ars Technica)
U.S. military bulk buying Japan's seafood to counter China import ban. (Axios)
FDA issues warning for 26 eyedrops due to risk of infection, blindness. (Washington Post)
Singapore, Malaysia to develop border economic zone, in sign of ‘collaborative’ boost to ties. (South China Morning Post)
NYT tech workers to walk out in protest of return-to-office policies. (Axios)
PwC picks Mohamed Kande as global chair. (Financial Times)
Fliers Can’t Get Enough of the ‘Upper-Middle Class’ Section of the Plane. (Wall Street Journal)