'Retail Sales'
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The World
Stock markets tumbled, as investors’ fears over the health of the banking industry resurfaced and spread around the world, undoing a rally on Tuesday when the panic appeared to pause. The catalyst for the day’s turmoil appeared to be Credit Suisse, the mistake-prone Swiss bank that has struggled for years to turn around its fortunes, with customers steadily shifting their assets to rival banks. It recorded the most eye-catching decline, with its shares losing roughly 30 percent, setting yet another record low. On Wednesday, the bank’s largest shareholder, Saudi National Bank, ruled out providing more money for Credit Suisse as it struggles with its latest turnaround plan. (New York Times)
Credit Suisse share slide sparks rout in European bank stocks. (Financial Times)
Retail sales declined in February, as consumers pulled back after a strong start to the year, amid high interest rates and inflation. Spending at stores, online and in restaurants fell by a seasonally adjusted 0.4% in February, the Commerce Department said Wednesday. January sales were revised up to a 3.2% gain. Retail sales figures aren’t adjusted for inflation. Consumers spent less at restaurants, auto dealerships and department stores and more on essentials like groceries and at health stores. Excluding often volatile auto sales, overall purchases decreased 0.1% in February. (Wall Street Journal)
As SVB collapsed, prominent investors, internet provocateurs, and others helped fuel concerns over the US banking system, creating a “Twitter-fueled bank run”. (Wall Street Journal)
BofA Gets More Than $15 Billion in Deposits After SVB Fails. (Bloomberg)
The Pentagon blamed a Russian fighter jet for the crash of a U.S. spy drone into the Black Sea on Tuesday while Moscow denied any collision as the encounter showed the increasing risk of direct confrontation between Russia and the United States due to the Ukraine war. Two Russian Su-27 jets carried out what the U.S. military described as a reckless intercept of the MQ-9 "Reaper" drone in international airspace before one of them collided with it at 7:03 a.m. (0603 GMT), causing the drone to crash into the sea. Several times before the collision, the Russian fighter jets dumped fuel on the MQ-9, possibly trying to blind or damage it, and flew in front of the unmanned drone in unsafe manoeuvres, the U.S. military said. Russia has not recovered the drone and the jet was likely damaged, the Pentagon said. (Reuters)
The U.S. has begun an aggressive new push to inflict pain on Russia’s economy and specifically its oligarchs with the intent of thwarting the Kremlin’s invasion of Ukraine. From the Treasury Department to the Justice Department, U.S. officials will focus on efforts to legally liquidate the property of Russian oligarchs, expand financial penalties on those who facilitate the evasion of sanctions, and close loopholes in the law that allow oligarchs to use shell companies to move through the U.S. financial system. (Associated Press)
Support for Ukraine Is Least Popular Item in Biden's Budget: Just under half of voters support a measure in President Joe Biden's 2024 budget proposal to allocate $6 billion in support for Ukraine, while 36% oppose it — making it the least popular item in his budget. (Morning Consult)
The Biden administration plans to ask China to resume its help combatting the fentanyl trade, following a months-long collapse in cooperation between Washington and Beijing on drug enforcement. Secretary of State Antony Blinken intends to raise the issue as a top subject for discussion the next time he meets his Chinese counterpart, according to senior Biden administration officials. Blinken’s planned February visit to Beijing was postponed after the U.S. detected a Chinese spy balloon over American airspace, and a new trip has yet to be announced. (Semafor)
Taiwan unveils new combat and surveillance drones as China threat grows. (CNN)
Honduras will seek to establish formal relations with China, a move that would effectively end its relationship with Taiwan and fulfill a 2021 campaign pledge from President Xiomara Castro. Honduras' plan would leave Taipei with just 13 countries that formally recognize it. (Nikkei Asia)
Saudi Arabia's finance minister, Mohammed al-Jadaan, said that Saudi investments into Iran could happen "very quickly" following an agreement. "There are a lot of opportunities for Saudi investments in Iran. We don't see impediments as long as the terms of any agreement would be respected," al-Jadaan said during the Financial Sector Conference in Riyadh. (Reuters)
Novo Nordisk A/S is set to cut the U.S. list prices for several insulin drugs by up to 75%, the latest big drugmaker to make steep price reductions amid pressure to curb diabetes-treatment costs. Novo, one of the biggest sellers of insulin in the U.S. and around the world, said Tuesday it would cut the list price of its NovoLog insulin by 75% and the prices for Novolin and Levemir by 65% starting in January 2024. (Wall Street Journal)
The government will subject 27 drugs to inflation penalties, meaning people on Medicare will pay less out-of-pocket by $2 to as high as $390 per average dose starting April 1. (Reuters)
Economy
Elevated inflation cooled modestly in February, as the Federal Reserve faces dual threats of rising prices and financial instability. The consumer-price index, a closely watched inflation gauge, rose 6% in February from a year earlier, versus a 6.4% gain the prior month, the Labor Department said Tuesday, the slowest pace since September 2021. The smaller increase comes as the Fed contemplates its next interest-rate move while confronting price pressures and bank failures. (Wall Street Journal)
US mortgage rates declined for the first time in five weeks, helping propel a measure of home-purchase applications to the highest in a month. The contract rate on a 30-year fixed mortgage fell 8 basis points to 6.71%. (Bloomberg)
Brent Crude Falls Below $75 A Barrel for First Time Since 2021. (Bloomberg)
European Central Bank policymakers are still leaning towards a half-percentage-point rate hike, despite turmoil in the banking sector, as they expect inflation will remain too high in coming years, a source told Reuters. Investors had begun to doubt the ECB's commitment to another big rate hike after the collapse of SVB. (Reuters)
Annual inflation in Argentina rose to a crippling 102.5% in February, in what is its highest rate since 1991 and among the most extreme in the world. The government has attempted to address the depreciation of the Argentinian peso by subsidizing protected foreign exchange rates dedicated to specific industries that make it cheaper for certain businesses to purchase dollars on the exchange market. (CNN)
Lawmakers target child labor laws to ease worker shortage. Legislators in multiple states are invoking a widespread labor shortage to push bills that would weaken long-standing child labor laws. Why it matters: Some bills go beyond expanding eligibility or working hours for run-of-the-mill teen jobs. They'd make it easier for kids to fill physically demanding roles at potentially hazardous work sites. Protections could be stripped for youth most at risk of being exploited by employers, like migrant children and kids from families facing financial problems. Driving the news: A new Arkansas law signed by Gov. Sarah Huckabee Sanders (R) last week makes it easier for teens as young as 14 to work without obtaining a permit. (Axios)
The European Commission proposed changes to EU electricity market rules. The goal of the change is to expand the use of long-term contracts to protect consumers from severe price spikes and to make energy bills "less dependent on volatile fossil fuel prices." Last year, energy prices in the bloc soared amid reduced oil and gas supplies from Russia. European Energy Commissioner Kadri Simson said: "Tight global supply and Russia's manipulation of our energy markets has left many consumers facing massive increases in their energy bills." Simon said the bloc would announce further steps on joint gas buying today. She added that the bloc is preparing a proposal to cut gas use by 15% during winter months. (Deutsche Welle)
Technology
ChatGPT maker OpenAI unveils new model GPT-4: OpenAI has released GPT-4, its latest artificial intelligence model that it claims exhibits “human-level performance” on several academic and professional benchmarks such as the US bar exam, advanced placement tests and the SAT school exams. The new model, which can be accessed via the $20 paid version of ChatGPT, is multimodal, which means it can accept input in both text and image form. It can then parse and respond to these queries using text. OpenAI said it has embedded its new software into a variety of apps including language-learning app Duolingo, which is using it to build conversational language bots; education company Khan Academy, which has designed an online tutor; and Morgan Stanley Wealth Management, which is testing an internal chatbot using GPT-4 to retrieve and synthesise information for its employees. (Financial Times)
GPT-4 is bigger and better than ChatGPT—but OpenAI won’t say why. (MIT Technology Review)
PwC partners with AI startup Harvey to launch a chatbot for its 4,000 lawyers, built using OpenAI's GPT-4, as law firms rush to find ways to integrate AI. (Financial Times)
Microsoft says the new Bing is “running on GPT-4, which we've customized for search” and was using an early version of the model over the past five weeks. (Bing Blog)
Google is bringing A.I. chat to Gmail and Docs. Google is deepening its push into generative artificial intelligence, introducing features Tuesday that will let users create text in Gmail and Docs using the company’s AI technology. The company is testing the AI products and making them accessible for a limited number of users of Workspace, which includes Gmail and Google’s productivity tools. (CNBC)
Try it here. (OpenAI)
Meta Platforms Inc. plans to lay off around 10,000 employees and close about 5,000 additional open roles in its second major round of job cuts in the past six months. The Facebook parent company has been marketing 2023 as a “year of efficiency” in an effort to improve its financial performance and achieve longer-term goals. As part of those efforts, Meta is flattening the organization, canceling lower priority projects and slowing hiring, Chief Executive Officer Mark Zuckerberg said in a statement on Tuesday. (Bloomberg)
BuzzFeed Encourages Reporters to Write More Stories in Attempt to Turn Profit: The digital publisher’s stock lost a quarter of its value on Tuesday after the company projected a sharp revenue decline for the first quarter. (Wall Street Journal)
Smart Links
Ryan Reynolds-backed Mint is bought by T-Mobile for $1.35 Billion. (Bloomberg)
A new space instrument called TEMPO will target North America’s air pollution problem. (Inverse)
Lahore is most polluted city; Chad worst among countries. (Reuters)
It's official: Egg prices have finally started coming down. (Semafor)
New Florida bill would ban diversity, inclusion programs on university campuses. (The Hill)
Smaller apartments are flooding the market. (Axios)
Here Are the Stadiums That Are Keeping Track of Your Face. (Slate)