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The World
The U.S. and Russia traded threats of “serious consequences” should either side escalate tensions on the Ukrainian border. U.S. Secretary of State Antony Blinken said that if Russia “decides to pursue confrontation, there will be serious consequences,” reiterating that Washington had “deep concerns about Russia’s plan for renewed aggression against Ukraine.” Blinken’s Russian counterpart Sergei Lavrov warned that Moscow would respond with “retaliatory measures to redress the military-strategic balance” if western military support for Ukraine continued to rise. (Financial Times)
Russia said that NATO expansion into eastern Europe risked plunging the world into a “nightmare” of military confrontation and accused Ukraine of sending more than 100,000 troops to its Donbas conflict zone. (The Times)
China will cut to no more than 10 days the time required for approval of travel by U.S. business executives, its ambassador to the U.S. said, promising to turn "an attentive ear" to concerns raised by businesses. However, ‘sweet words’ from China to US business fail to soothe Washington ire. (Reuters, South China Morning Post)
Facing Olympic boycott calls, China presses U.S. companies to speak up in its defense. (Washington Post)
Saudi Arabia agreed to keep increasing monthly crude oil production following a charm offensive by Biden administration officials that included an effort to reframe the relationship between the US and the kingdom. The outreach signals a shift in Washington’s approach to relations with the kingdom, with a focus on economics and energy. (Financial Times)
French Prime Minister Jean Castex told his British counterpart, Boris Johnson, that he rejected the idea of a joint British-French patrol in the English Channel to fight clandestine migration to Britain, a letter obtained by Reuters showed. "France is ready to pursue our operational cooperation with the United Kingdom", the letter said, but added: "We cannot accept ... British police or military patrol on our coast. It's a matter of our sovereignty." (Reuters)
United Airlines CEO Scott Kirby become the first boss of a big US carrier to warn the Omicron coronavirus variant is a threat to transatlantic travel. “My guess is we’ll have less flying to Europe than we would have in January” because of the new variant, Kirby said. (Financial Times)
N.Y. Hospitals fill as states see the most Covid cases since January. Hospital admissions are higher in 39 states. (Bloomberg)
Coronavirus cases in South Africa nearly triple in three days. (Washington Post)
South Korea makes vaccine pass mandatory for many more venues — and Vietnam COVID cases hit record — as Omicron fears rise. (Reuters, Nikkei Asian Review)
How do employees really feel about omicron? About 71% of American adults are concerned about the omicron variant. Vaccinated adults (80%) are significantly more concerned about the COVID-19 variant than unvaccinated adults (52%). The percentage of Republicans who say the virus “poses a severe local health risk” has fallen to 13%. 56% of U.S. adults believe employers and businesses should require vaccination for employees or patrons. (Protocol, Morning Consult)
What U.S. mayors are really worried about: A survey of 126 mayors reveals that city leaders are more concerned about the long-term mental health consequences of the pandemic than other headline-grabbing issues like the shift to remote work. 52% of the mayors surveyed cited mental health and trauma as one of two long-term consequences of the pandemic they were most concerned about, and 37% cited the toll on students who lost more than a year of in-person schooling. Additionally, when asked about how the pandemic has changed their cities, 40% noted changes in mental health and world views. In contrast, only 2% of mayors cited concerns over the shift to remote work, and 7% chose the perceived outmigration of residents as their top concerns. And despite a spike in homicides, just 26% of mayors said they were most concerned about increased crimes and violence. (CityLab)
Economy
Ride-hailing giant Didi Global will delist from the NYSE and pursue a listing in Hong Kong, succumbing to pressure from Chinese regulators concerned about data security. Meanwhile, the U.S. is inching further on efforts to boot Chinese companies off American stock exchanges for not complying with Washington’s disclosure requirements. The SEC announced its final plan for putting in place a new law that mandates foreign companies open their books to US scrutiny or risk being kicked off the NYSE and Nasdaq within three years. (Reuters, South China Morning Post)
SPAC troubles: BuzzFeed suffered a wave of SPAC investor withdrawals before going public. About 94% of the $287.5 million the SPAC raised has been withdrawn by investors, leaving the digital-media outlet with the remainder. BuzzFeed will raise roughly $16 million from its public listing. Meanwhile, Grab fell sharply in their Nasdaq debut after the south-east Asian super app closed a record $40bn merger deal with a New York-listed blank cheque company. “This is definitely pretty symbolic of how Spacs have been doing,” said Lily McGonagle, data analyst at Renaissance Capital. (Wall Street Journal, Financial Times)
A return to office clash is coming for employers eager to bring back workers. Plans for January office returns are colliding with virus uncertainty. How bosses proceed may further erode the already-frayed trust between workers and management. “There’s a reckoning coming on what the new normal is going to be and we’re reaching a point where we’re going to have to define it — if not in January, then soon,” says Mark Royal, a senior director at consultancy Korn Ferry Advisory. “And it’s likely to require some adjustments on the part of both companies and individuals in terms of expectations.” (Bloomberg Businessweek)
Google delayed its mandated return to the office in Europe, the Middle East and Africa past the original Jan. 10 date. (Insider)
Goldman Sachs and other Wall Street banks are exploring bitcoin-backed loans, as U.S. banks want to use bitcoin as loan collateral without touching the bitcoin. (CoinDesk)
Elon Musk has now unloaded more than $10 billion in Tesla stock, selling more than 934,000 Tesla shares valued at just over $1 billion. (Wall Street Journal)
Macro Outlook 2022 — The Long Road to Higher Rates: Economies and markets are facing a more complicated year ahead where they’ll have to contend with slowing global growth, rising inflation and shifting monetary policies—not to mention potential risks from the new omicron variant. As the world moves past the peak of the reopening boost, global growth is set to slow to about 4.5% in 2022 from about 6% this year, says GS Chief Economist Jan Hatzius. “Fiscal policy is turning from a tailwind to a headwind [and] monetary policy also is likely to turn,” he says, with central banks responding to an inflation surge that he expects to subside later next year but to levels somewhat higher than in the last cycle, depending on how wages in particular evolve. What does that means for markets? “Yields up and equities up,” says Dominic Wilson, senior advisor to Goldman Sachs Research—a reflection of “decent growth and some monetary tightening, but not monetary tightening at a level that we think threatens the recovery.” (Goldman Sachs)
Technology
In another blow to Nvidia's planned $40 billion acquisition of Arm, the U.S. Federal Trade Commission launched a lawsuit to block the deal. The commission voted unanimously in favor of the administrative complaint, which is set to go to trial May 10, 2022. The FTC noted that it cooperated closely with regulators in the European Union, U.K., Japan, and South Korea. The FTC said it takes issue with the deal because a combined Nvidia-Arm would grant a single company control over the technology that dozens of rivals rely on to design competing products. (Protocol)
New privacy protections put in place by tech giants and governments are threatening the flow of user data that companies rely on to target consumers with online ads. Across nearly every sector, marketers are rushing to collect their own information on consumers, seeking to build millions of detailed customer profiles. Brands are deploying an array of tactics to persuade users to surrender data to the brand itself—loyalty programs, sweepstakes, newsletters, quizzes, polls and QR codes, those pixelated black-and-white squares that have become ubiquitous during the pandemic. (Wall Street Journal)
CVS Health and Microsoft are forming a strategic alliance to co-develop products around the areas of personalized care and digital health. CVS said it plans to use Microsoft's computing capabilities to deliver more customized health recommendations when and where consumers need them. The two will also look for new ways to leverage technology and machine learning to automate CVS operations and reduce waste. (Healthcare Dive)
The evolution of the “Digital Silk Road,” a term coined by President Xi in a 2015 state white paper, that has quietly become a contentious topic for China-Africa watchers. The Digital Silk Road (DSR) includes everything from cross-border e-commerce, smart cities, and fintech apps through to big data, internet of things, smartphones, and undersea cables. These projects don’t grab headlines like shiny new Chinese-built airports and railways or spark panicked fears of China’s “debt trap diplomacy.” But the unfettered influence of Chinese firms developing every step of the digital ecosystem in nearly all African countries has become a growing point of concern, particularly for China’s rivals in the U.S. (Rest of World)
Smart Links
Kroger CEO says consumers are still cooking at home, hosting holiday gatherings. (CNBC)
Suburban NYC home sales plunge because there’s nothing to buy. (Bloomberg)
UK household wealth rises to a record high. (The Times)
Study shows you shouldn’t use emojis in work messages: Women likely to interpret certain emojis more negatively than men. (Wall Street Journal, Computers in Human Behavior)
Covid is set to cost the tourism industry $1.6 trillion this year. (Washington Post)
Sobering analysis of cyber weapons arms race wins FT/McKinsey book prize: ‘This Is How They Tell Me the World Ends.’ (Financial Times)