Know someone who would like this newsletter? Forward it to them.
The World
Americans continued to pump money into the U.S. economy in April, with increased retail spending offering the latest sign consumers are driving demand at stores and manufacturers despite the pinch from high inflation. Retail sales—a measure of spending at stores, online and in restaurants—rose a seasonally adjusted 0.9% last month compared with March. That marked the fourth straight month of higher retail spending. Meanwhile, Fed Chair Jerome Powell said the Fed was tightly focused on bringing down inflation that is running at a 40-year high: “We need to see inflation coming down in a convincing way. Until we do, we’ll keep going.” (Wall Street Journal)
Cleveland Federal Reserve President Loretta Mester says a 75bp rate hike is on the table in autumn. (Nikkei Asia Review)
The Biden administration is poised to fully block Russia’s ability to pay US bondholders after a deadline expires next week, a move that could bring Moscow closer to the brink of default. The Treasury Department’s Office of Foreign Assets Control is expected to let a temporary exemption lapse once it expires on May 25, according to people familiar with the matter. The waiver, issued shortly after the US levied sanctions on Russia over its invasion of Ukraine in February, has given Moscow room to pay coupons, helping it avert default on its government debt. (Bloomberg)
North Korea appears to be preparing for a possible intercontinental ballistic missile test within the next 48 to 96 hours, just as President Joe Biden is scheduled to travel to Asia, according to a US official familiar with the latest intelligence assessment. "The things we have noticed in the past for a launch are the things we are noticing now," the official said. The launch site under satellite observation is located near Pyongyang. (CNN)
North Korea is on brink of Covid-19 catastrophe, say experts. The number to have fallen ill reportedly sits at almost 1.5 million as country grapples with what it calls ‘fever’. Meanwhile, North Korea sent aircraft to China to pick up medical supplies days after it confirmed its first COVID-19 outbreak — some of its first international flights since the coronavirus pandemic began more than two years ago. (The Guardian, Reuters)
With China firmly on a zero-Covid trajectory, concerns are turning to ‘growth recession’ risks. Even as the government attempts to censor those who disagree with its Covid policies, fears of economic recession spark warnings and curb consumption. (South China Morning Post)
Southeast Asia recovery is at risk over inflation, China lockdowns. Thailand and Philippines downgrade GDP outlooks for the full year. (Nikkei Asia Review)
Apple delayed a plan to require workers to come back to the office three days a week, citing a resurgence in Covid-19 cases, marking the latest setback in its efforts to return to normal. The company informed employees that it’s delaying the requirement, which had been slated to go into effect on May 23. However, the company is still expecting workers to come to the office two days per week. The company said the requirement is being delayed for “the time being” and didn’t provide a new date. (Bloomberg)
Nestlé said it would fly extra baby formula into the U.S. from Switzerland and the Netherlands as the Gerber owner looks to accelerate deliveries to alleviate a severe shortage across the U.S. Nestlé is the third-largest player in the U.S. baby formula market, with a share of 9.7%. (Wall Street Journal)
U.S. traffic deaths reached a 16-year high in 2021. NHTSA, a federal vehicle safety watchdog, estimates 42,915 people died in motor vehicle traffic crashes last year, a 10.5% increase from 2020. (CNBC)
Economy
JPMorgan Chase shareholders voted against the bank’s executive pay plan, delivering a stinging rebuke to chief executive Jamie Dimon and his management team. In a “say on pay” vote at the bank’s annual meeting on Tuesday, only 31 per cent of investors voted in favor of JPMorgan’s 2021 plan, which included a total $201.8mn package for six top executives. Dimon stands to make $50mn from a one-off special award. It is the first time the bank’s board has lost such a vote since it was introduced in 2009. (Financial Times)
Macy’s wins over underserved market: Black sororities. An executive for the retailer had trouble finding dresses in her sorority’s colors, so she helped create a line that’s projected to hit $10 million in sales this year. (Bloomberg)
The crypto crash that vaporized roughly $500 billion in market value over the last two weeks is refocusing Washington policymakers’ attention — fast-tracking the desire to set federal rules for the freewheeling industry. Financial watchdogs are zeroing in on stablecoins, the subset of cryptocurrencies meant to offer traders a safe harbor from the wild swings of the wider crypto market. (Washington Post)
Coinbase is slowing its hiring plans in the latest sign that a sharp pullback in the trading of digital tokens such as bitcoin is exacting a heavy toll on the one of the world’s biggest crypto exchanges. The slowdown marks a drastic change of strategy for Coinbase, which had been planning a further aggressive hiring spree for a second year in a row. (Financial Times)
China vaults back to No. 2 bitcoin miner on suspected covert activity. Report says global share went from zero to 20% despite Beijing's ban. (Nikkei Asia Review)
Miami’s mayor backed MiamiCoin crypto—then its price dropped 95%: On Feb. 2, the city of Miami cashed out its cryptocurrency MiamiCoin for the first time, depositing $5.25 million into city coffers. Miami mayor Francis Suarez hailed it as a “historic moment” and predicted the cryptocurrency could one day even replace municipal taxes as the government’s primary source of funding. Over the last nine months, however, MiamiCoin has lost nearly all of its value, falling about 95% from its September peak to just $0.0032 as of May 13. Its rapid descent has burned investors on the way down, muting the dreams of Miami’s city leaders, and possibly raising red flags for regulators now investigating cryptocurrency transactions. (Quartz)
Technology
Federal regulators are investigating Elon Musk’s late disclosure last month of his sizable stake in Twitter, according to people familiar with the matter, a lag that allowed him to buy more stock without alerting other shareholders to his ownership. The SEC is probing Mr. Musk’s tardy submission of a public form that investors must file when they buy more than 5% of a company’s shares. (Wall Street Journal)
Elon Musk may be directing his buyer’s remorse at Twitter’s bot problem. But underpinning the deal is a $13 billion debt bill that’s looking like a bigger burden by the day. The package, drummed up in a rush and signed by banks before the end of the billionaire’s beloved April 20 weed holiday, will leave the social media platform with an annual interest expense approaching $1 billion, giving the company an alarmingly small margin for error. (Bloomberg)
Twitter loses three more senior employees ahead of Musk’s takeover. (Bloomberg)
Mastercard is launching a controversial biometric payments program in stores, as the card company tries to keep pace with nimble fintechs and bigger competitors such as Amazon. Retailers that sign up to its pilot scheme can allow customers to pay in-store with a gesture such as a smile or a wave. The system, which requires customers to enroll first, could also be connected to loyalty programs and purchase history. (Financial Times)
Apple announces new accessibility features, including a live captioning tool for iOS, iPadOS, and macOS and mirroring Watch apps to an iPhone. (TechCrunch)
Disney will not accept ads about alcohol, politics, or rival studios on the ad-supported tier of Disney+. (Variety)
Smart Links
Warren Buffett spends big as stock market sells off. (Wall Street Journal)
Walmart gets hammered by worst drop since 1987 on forecast cut. (Bloomberg)
Starbucks to cover employees’ travel expenses for abortions, gender-affirming surgeries. (CNBC)
Asia's food crisis: Ukraine war triggers chain reaction of shortages. (Nikkei Asia Review)
Netflix cuts 150 jobs after subscriber slump, revenue slowdown. (Los Angeles Times)
Stanford, Harvard, MIT still lead as educators of funded founders. (Crunchbase)