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The World
Uncomfortably high inflation will grip the U.S. economy well into 2022, as constrained supply chains keep upward pressure on prices and, increasingly, curb output, according to economists surveyed this month by The Wall Street Journal. The economists’ inflation projections are up dramatically from July, while short-term growth outlooks are lower. Economists on average see inflation at 5.25% in December, just slightly less than the rate that has prevailed since June. Assuming a similar level in October and November, that would mark the longest inflation has been above 5% since early 1991. Consumer-price inflation will drop to 3.4% by June of next year, then 2.6% by the end of 2022, according to respondents’ average estimates. That is still above the average 1.8% that prevailed in the decade before the pandemic. (Wall Street Journal)
China’s economic recovery stalls: China’s economy grew by 4.9% in 3Q21 compared with a year earlier — just below expectations in the median survey of Bloomberg analysts, which had predicted 5% growth, and down from the 2Q21 growth rate of 7.9%. It is the weakest pace since China’s economy grew by 4.9% in 3Q20. (South China Morning Post)
Some unions are pressing for gains in a tight U.S. labor market, pushing employers for higher wages and calling strikes as companies face already snarled supply chains. A walkout by production workers for farm and construction machinery company Deere that began Thursday followed recent stoppages at snack producer Mondelez International, commercial truck maker Volvo and breakfast-cereal giant Kellogg Co. Union officials said workers are motivated by lingering frustration over their hours, pay and concerns for their health as some have held front-line jobs through the Covid-19 pandemic. Employees this year have pushed for higher wages, expanded benefits, safer workplaces and added staffing. (Wall Street Journal)
The Chinese military newspaper PLA Daily called for a ‘people’s war’ to counter US spies after CIA sets up new China unit. The call follows reports that the US intelligence service is looking to recruit Chinese speaking operatives, while a post on social media says ‘no cunning fox can defeat a good hunter’ and says the military is relying on the people to look out for spies. (South China Morning Post)
Companies that stumped up millions of pounds to sponsor the Cop26 climate summit have condemned it as “mismanaged” and “very last minute” in a volley of complaints as next month’s event in Glasgow draws near. The sponsors, which include some of Britain’s biggest companies, have raised formal complaints blaming “very inexperienced” civil servants for delayed decisions, poor communication and a breakdown in relations between the organisers and firms in the run-up to the landmark talks. (The Guardian)
The strength of the wind blowing across northern Europe has fallen by as much as 15% on average in places this year, according to data compiled by Vortex, an independent weather modelling group. The cause of the decrease is uncertain, say scientists, but one possible explanation is a phenomenon called global stilling. This is a decrease in average surface wind speed owing to climate change. (Financial Times)
Oil prices climb to highest in years as Covid recovery, power generators stoke demand. (Reuters)
Behind the energy crisis: Fossil fuel investment drops, and renewables aren’t ready. An energy price shock is serving as a reminder of the world’s continued dependency on fossil fuels—even amid efforts to shift to renewable sources of energy. Demand for oil, coal and natural gas has skyrocketed world-wide in recent weeks as unusual weather conditions and resurgent economies emerging from the pandemic combine to create energy shortages from China to Brazil to the U.K. The situation has laid bare the fragility of global supplies as countries drive to pivot from fossil fuels to cleaner sources of energy, a shift many investors and governments are trying to accelerate amid concerns about climate change. (Wall Street Journal)
Economy
Rising mortgage rates are shifting lenders’ focus from refi’s to home buyers. The 30-year mortgage is above 3% again, reducing the number of people looking to save money by refinancing. (Wall Street Journal)
A National Bureau of Economic Research working paper has argued that companies buying credit ratings from S&P Global’s ratings business had a statistically significant impact on the likelihood of being added to the S&P 500. S&P has firmly denied the findings of the paper, titled “Is Stock Index Membership for Sale?”, calling it “flawed”. It said its two units “are separate businesses with policies and procedures to ensure they are operated independently of one another.” (Financial Times, NBER)
The ECB is exploring raising its limit on purchases of EU-issued bonds, in a move that would enhance its flexibility in asset-buying schemes and boost the status of the bloc’s groundbreaking joint debt program launched this year. They expect to discuss the idea at two special council meetings starting in November to decide how much support to provide for financial markets from next year. (Financial Times)
Chinese banks' massive lending to the real estate sector looks increasingly likely to backfire on many as default fears mount -- and may ultimately make it harder for authorities to bail them out. As a specter of a property-driven cash crunch looms over Chinese banks, the cooling land market risks leaving authorities with less income to fund rescues. (Nikkei Asian Review)
Square CEO Jack Dorsey said the fintech firm is looking to build a bitcoin mining system based on custom silicon and open source for individuals as well as businesses. This would add to Square's existing bitcoin-focused projects including a business to build an open developer platform, as well as a hardware wallet for the cryptocurrency. (Reuters)
San Francisco is reopening as VCs tiptoe back to in-person meetings. (Bloomberg)
Technology
Facebook says AI will clean up the platform, but its engineers have doubts. AI has only minimal success in removing hate speech, violent images and other problem content, according to internal company reports. (Wall Street Journal)
Apple’s advertising business has more than tripled its market share in the six months after it introduced privacy changes to iPhones that obstructed rivals, including Facebook, from targeting ads at consumers. The in-house business, called Search Ads, offers sponsored slots in the App Store that appear above search results. Users who search for “Snapchat,” for example, might see TikTok as the first result on their screen. Apple’s in-house business is now responsible for 58% of all iPhone app downloads that result from clicking on an advert. A year ago, its share was 17%. “It’s like Apple Search Ads has gone from playing in the minor leagues to winning the World Series in the span of half a year,” said Alex Bauer of Branch, which measures mobile marketing effectiveness. (Financial Times)
Apple’s October ‘Unleashed’ event at 1 pm ET today — what to expect: A redesigned MacBook Pros; a Pro Mac mini; new AirPods; and a MacOS Monterey release date. (The Verge)
From Wild West to Mainstream, eSports are moving into the mainstream. The immense popularity of survival-based games like Fortnite, growing prize pools for eSports tournaments, the rise of live-streaming, and improving infrastructure for pro leagues have all paved the way for eSports to reach nearly 300mn viewers by 2022, on par with NFL viewership today. For game publishers, we believe eSports will not only help to increase audience reach and engagement, but also drive direct revenue through established leagues. We see further tailwinds to the broader eSports ecosystem—including online video platforms, hardware manufacturers (core and peripheral), and chip makers—opportunities we outline in this report. (Goldman Sachs)
Epic said that it’s “open to games that support cryptocurrency or blockchain-based assets” on its game store, unlike its competitor Valve which has banned games that feature blockchain technology or NFTs from Steam. Epic said there’d be some limitations, but that it’s willing to work with “early developers” in the “new field.” Epic says that the games would have to comply with financial laws, make it clear how the blockchain is used, and have appropriate age ratings. It also says that developers won’t be able to use Epic’s payment service to accept crypto; they would have to use their own payment systems instead. (The Verge)
Zillow pauses home purchases as snags hit tech-powered flipping. (Bloomberg)
Smart Links
Retailers to sell smaller, squishier toys this holiday season. (Axios)
$2.7 trillion in crisis savings stay hoarded by wary consumers. (Bloomberg)
Netflix estimates Squid Game will create almost $900M in value for the company; 87M viewers finished series in first 23 days. (Bloomberg)
UK says China is welcome to invest in non-strategic parts of economy. (Financial Times)
Why it’s easier to find expensive appliances than cheaper ones. (Wall Street Journal)