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The World
Stocks sink to a 13-month low as U.S. curve steepens: The most punishing market selloff in years showed no signs of abating, with U.S. stock indexes sliding to new lows for 2022 and other assets, like oil and bitcoin, tumbling as well. Inflation is running at its fastest pace in decades, threatening to eat into corporate profits and rein in consumer spending. Economic growth is slowing. And the Fed is kicking off what analysts anticipate will be its most aggressive monetary policy tightening campaign since the 1980s—something many investors worry may tip the economy over the edge into recession. Few believe a recession is imminent. The labor market has continued to add jobs at a rapid clip. Wages are climbing, and the unemployment rate remains near a 50-year low. But economists say there is a growing probability of a slowdown in the coming year, with those surveyed by The Wall Street Journal estimating a 28% probability of a recession sometime in the next 12 months—up from 18% in January. (Bloomberg, Wall Street Journal)
Global stocks suffered their worst one-day decline since the early months of the pandemic in 2020, as investors fret about signs of slowdowns in the world’s large economies at a time when central banks are reining in crisis-era stimulus measures. The FTSE All-World barometer of global equities dropped 3%, its sharpest fall since June 2020, and hit its lowest level since December 2020. Worries over rising rates have been compounded by indications that growth in big global economies could be slowing. Chinese export growth fell to its lowest level in two years last month, which followed reports last week pointing to slowdowns in the German and French manufacturing sectors. (Financial Times)
Bitcoin drops below $30,000 for the first time since July 2021 — a 55% decline from a November record high. (Bloomberg)
China's exports growth hits 2 year-low as virus curbs hit factories. (Reuters)
Even at a gas price of around $4.30 per gallon on average, Americans are still paying much less to fill up their cars than people in many industrialized nations, including other car-based economies like Brazil, Australia or South Africa. According to website Global Gas Prices, all three nations were already paying between $4.76 and $5.42 for a gallon. Europe has some of the highest gasoline prices in the world. Most of Western Europe was paying upwards of $6.00 for a gallon of gas as of May 2, with some of the highest prices being charged in Iceland, Finland, Greece, Denmark and Norway. Germany was the most expensive major European economy in terms of gas prices most recently, as a gallon was going for $7.97. Norway is an outlier among oil producing countries as it taxes gasoline at a premium. The most expensive gallon of gas included in the ranking, however, was being sold in Hong Kong at $10.87. (Statista)
European Commission President Ursula von der Leyen failed to reach agreement with Hungary to secure the country’s backing for an oil embargo on Russia, setting back hopes of a quick deal on Brussels’ energy sanctions proposals. (Wall Street Journal)
Germany is preparing a crisis plan for an abrupt end to Russian gas. (Reuters)
Ferdinand Marcos Jr clinched a stunning runaway victory in the Philippines' presidential election in the first win by a majority since a 1986 revolution that toppled his late father's two-decade dictatorship. An unofficial tally showed Marcos, popularly known as "Bongbong", had surpassed the 27.5 million votes needed for a majority, setting the stage for a once unthinkable return to rule of the Marcos family, 36 years after its humiliating retreat into exile during a "people power" uprising. (Reuters)
China's two largest cities tightened COVID-19 curbs, fueling public angst and even questions about the legality of its uncompromising battle with the virus that has battered the world's second largest economy. In Shanghai, enduring its sixth week of lockdown, authorities have launched a new push to end infections outside quarantine zones by late May. While there has been no official announcement, residents in at least four of Shanghai's 16 districts received notices at the weekend saying they wouldn't be allowed to leave their homes or receive deliveries, prompting a scramble to stock up on food. (Reuters)
Only a trickle of travelers into Hong Kong while crowds return to no-quarantine Singapore. Only 512 visitor arrivals at Hong Kong airport from May 1 to May 7 as travelers are still put off by strict rules. (South China Morning Post)
Microsoft said it would extend its abortion and gender affirming care services for employees in the U.S. to include travel expense assistance. Several companies, including Yelp, Citigroup, Levi Strauss, and Amazon have already pledged to cover costs for American employees who need to travel out of state for an abortion. (Reuters)
The newsletter Popular Information reported that public relations firm Zeno, an adviser to major corporations and a subset of Edelman Holdings, advised its clients to stay silent on the Supreme Court's draft decision overturning Roe v. Wade. The firm suggested that the first company to "raise its hand" can become a lead story on the issue, and told clients that "being at the center [of the story] is not advisable" on the issue of abortion. The PR firm says this guidance applied to "the first 24 hours of breaking news." (The Broadsheet, Popular Information)
Economy
Companies throughout the U.S. are flooding the market with office space they want to sublease, aggravating landlords already facing weak demand as more tenants embrace hybrid work. The amount of space listed for sublease surged in the first year of the pandemic to the highest level in decades in some cities. But it fell in the second half of 2021 as offices leased up and some companies took listings off the market. Now it is rising again. Sublease availability across the U.S. increased 3.6% in the first quarter to 159 million square feet, according to CBRE Group Inc. That is still below last year’s peak of 162 million square feet, but well above prepandemic levels. (Wall Street Journal)
UK private equity firms shrugged off Brexit concerns and went on the offensive in Europe last year as acquisitions of corporates on the continent jumped 80%, fresh data has revealed. The number of European corporates snapped up by UK private equity rose from 245 in 2020 to 442 in 2021. In 2Q21, dealmakers notched up a 50% jump in deals compared to the first quarter. (City A.M.)
Global VC funding dipped in April, but it wasn’t a nosedive. Global venture funding totaled $47 billion in April 2022—the lowest amount invested in private companies in the past 12 months. While the dip isn’t massive, it does signal that the slowdown we saw in the first quarter of this year is the start of a longer-term shift in funding, particularly at late stage. (Crunchbase)
In a market clamoring for workers, new grads have plenty of leverage: U.S. employers are planning to hire 31.6% more college grads this year compared to 2021, according to the National Association of Colleges and Employers. (WBUR)
Up to 70,000 French jobs at risk from EU emissions rules, Renault boss warns. (Financial Times)
Technology
The U.S. Department of Energy announced it was taking its first steps to disburse the more than $2.3 billion for carbon capture technology included in Biden’s Bipartisan Infrastructure Law. Energy Secretary Jennifer Granholm believes that broad investments in technology are the best way to address carbon emissions, and carbon capture is one such technology. “Technology is ultimately going to be our friend in solving this big problem,” explained Granholm. (CNBC)
Uber will cut back on spending and focus on becoming a leaner business to address a “seismic shift” in investor sentiment, CEO Dara Khosrowshahi told employees in an email obtained by CNBC. “After earnings, I spent several days meeting investors in New York and Boston,” Khosrowshahi said in the email, which was sent out late Sunday. “It’s clear that the market is experiencing a seismic shift and we need to react accordingly.” (CNBC)
Meta Platforms is considering reducing the money it gives news organizations as it reevaluates the partnerships it struck over the past few years, according to people familiar with the matter. The reassessment comes as Meta looks to cut costs broadly and rethinks the value of including news in its flagship Facebook app. Meta’s Facebook and Instagram apps have lately focused on expanding their short-term video offerings so they can compete more effectively with TikTok. At the same time, the social media company has noticed that fewer people have been clicking on links to news articles since President Donald Trump left office. (The Information)
Tesla halted production at its Shanghai plant due to issues with supplies. The suspension comes just three weeks after the U.S. automaker partially resumed production at the Shanghai plant on April 19 following a 22-day closure caused by the city's COVID-19 lockdown. (Reuters)
Apple’s China engineers are keeping products flowing as Covid shuts out U.S. staff. The tech giant is passing more authority to local workers, while using live streaming and augmented reality to ensure products made in China come out on time. (Wall Street Journal)
The podcast advertising biz is continuing its upward trajectory — with U.S. ad sales expected to grow 47% this year to $2.13 billion, according to a new forecast from trade group IAB and PwC. That’s actually a deceleration from last year. The sector hit $1.45 billion in 2021, representing 72% annual growth, according to the report. In 2021, U.S. podcast advertising revenue grew twice as fast as the total internet advertising market, which was up 35% last year. Still, U.S. podcast advertising revenue is poised to continue double-digit growth, growing more than 100% over the next two years to an estimated $4.2 billion in 2024. (Variety)
Smart Links
Ukraine war turns China into net exporter of aluminum. (Nikkei Asia Review)
Steve Cohen’s secret weapon for the Mets: His hedge fund. (Wall Street Journal)
Goldman pauses work on new Spacs after SEC takes tougher stance. (Financial Times)
How the pandemic made algorithms go haywire. (Slate)
Crypto bros descend on ‘Silicon Bali’. (Financial Times)
The 2022 Pulitzer Prizes were announced; the Washington Post won for Public Service. (Pulitzer.org)