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The World
OPEC+ said it would lock in current production levels, a pause that suggests the word’s leading oil producers are uncertain about the direction of crude prices with a price cap on Russia’s petroleum exports set to take effect. The decision allows the Organization of the Petroleum Exporting Countries and a group of producers led by Russia to take more time to assess the market impact of an EU and Group of Seven price cap, which is intended to crimp Russia’s revenue for the Ukraine war. It locks in a 2 million-barrels-a-day production cut decided in October. The cap is set to go into effect on Monday, with both oil traders and government energy officials uncertain about how it will affect the market. An EU ban on most imports of Russian oil begins the same day. Then on Thursday, Chinese President Xi Jinping is expected to travel to Saudi Arabia, where energy markets are set to be on the agenda in discussions between the world’s largest oil importer and largest oil exporter, respectively. (Wall Street Journal)
Inflation is cooling. Consumers are still spending. And hiring is slowing — but not collapsing. That’s why Moody’s Analytics chief economist Mark Zandi is increasingly confident that the American economy will — narrowly — escape a recession. “It’s going to be a struggle. It’s going to feel uncomfortable. But I think we are going to thread the needle,” Zandi said. (CNN)
From chicken wings to used cars, inflation begins to ease its grip: The price of gasoline is dropping like a rock. Chicken wings are suddenly a bargain. And retailers drowning in excess inventory are looking to make a deal. After more than a year of high inflation, many consumers are finally starting to catch a break. Even apartment rents and car prices, two items that hammered millions of household budgets this year, are no longer spiraling out of control. Global supply chains are finally operating normally, as more consumers spend more on in-person services like restaurant meals and less on goods like furniture and computers that come from an ocean away. The cost of sending a standard 40-foot container from China to the U.S. West Coast is $1,935 — down more than 90 percent from its September 2021 peak of $20,586, according to the online freight marketplace Freightos. (Washington Post)
Von der Leyen promises EU help for companies lured by US green subsidies: The EU must “simplify and adapt” its rules on state aid to counteract the competitive effects of the US’s new $369bn climate package, European Commission president Ursula von der Leyen said. Europe should “adjust our own rules to make it easier for public investments”, von der Leyen said in her first public response to Washington’s green energy subsidy scheme, which EU leaders say risks “fracturing” transatlantic unity by luring European companies to relocate. Washington’s measures have soured ties between Washington and Brussels and triggered a chorus of demands from EU states for a competitive response, fuelling fears of a trade war. (Financial Times)
Indonesia's Mount Semeru volcano has erupted, sending ash billowing into the sky and sparking evacuations on the country's main island, Java. Authorities raised the volcano's warning status to the highest level, meaning its activity had escalated. Nearly 2,000 people were evacuated from the area around the volcano. People have been urged to keep at least 8 km (5 miles) away, as "hot avalanches" of lava poured from Semeru. (BBC)
Billions in Covid Aid Went to Hospitals That Didn’t Need It: When Covid-19 struck, the U.S. government gave hospitals tens of billions of dollars to help them cope with the strains of the pandemic. Many of the hospitals didn’t need it. The aid enriched some well-off systems, while failing to meet the needs of many that were struggling, according to a Wall Street Journal analysis of federal financial-disclosure reports. The mismatch stemmed in part from the way the federal government determined how much a hospital should get. (Wall Street Journal)
Covid hospitalizations rising post-Thanksgiving after an autumn lull. (Washington Post)
FTX founder Sam Bankman-Fried tweeted on Sunday that he would testify before the House Financial Services Committee after he finished "learning and reviewing" the events that led to the spectacular collapse of his cryptocurrency exchange. The U.S. House Financial Services Committee plans to hold a hearing in December to investigate the collapse of FTX and expects to hear from the companies and individuals involved, including founder and CEO Bankman-Fried. (Reuters)
Economy
The Dow is beating the broader market to a degree not seen in nearly a century. The Dow is down 5.3% this year, which isn’t normally a cause for celebration. But that performance looks downright golden compared with the S&P 500, which is off 15%, and the Nasdaq, which has dropped 27%. (Wall Street Journal)
Overseas investors have resumed buying Chinese stocks again after a two-month sell-off, enticed by the prospects of an end to Beijing’s zero-Covid policy. The fear of missing out is sustaining the inflows, which has helped to boost the valuation by US$1 trillion. They snapped up 60 billion yuan (US$8.5 billion) of onshore stocks in November through the Stock Connect link with Hong Kong, after selling a combined US$9.8 billion in September and October. (South China Morning Post)
Credit Suisse’s Investment Bank Spinoff Attracts Saudi Crown Prince: Mohammed bin Salman could invest $500 million to back CS First Boston and CEO-designate Michael Klein. Mr. Klein’s involvement opened the door to Prince Mohammed’s potential investment, people familiar with the talks said. Mr. Klein is a trusted adviser in the kingdom from deals such as the 2019 initial public offering of state-owned oil giant Saudi Arabian Oil Co. (Wall Street Journal)
PwC targets rival EY in bid to expand partnership: PwC plans to quadruple the pace of its partner hiring in the US and take advantage of uncertainty at EY by poaching some of its rival’s most senior executives. (Financial Times)
New York’s ‘zombie’ office towers teeter as interest rates rise: The world’s largest office market has of late endured the departure of big-spending Chinese investors, the rise of Covid-era remote working and the economic fallout from the Ukraine war. Now there is mounting concern that the dramatic rise in interest rates will be too much for many owners to sustain and that a long-awaited reckoning is drawing near. “There’s a consensus feeling that capitulation is coming,” said Doug Harmon, chair of capital markets at Cushman & Wakefield, who likened rising rates to petrol igniting an office firestorm. “Everywhere I go, anywhere around the world now, anyone who owns office says: ‘I’d like to lighten my load.’” The industry is rife with talk of partnerships breaking up under duress, office buildings being converted for other uses and speculation about which developers may not make it to the other side. Meanwhile, opportunists are preparing for what they believe will be a bevy of distressed sales at knockdown prices, perhaps in 1Q23. (Financial Times)
Manufacturing orders from China are down 40% in unrelenting demand collapse. China to U.S. container volume was down 21% between August and November. Chinese factories are shutting down two weeks earlier than usual ahead of Chinese New Year. (CNBC)
Experiments involving 20 million people generated a surprising finding: moderately weak connects — and not strong connections — are the most useful in finding a new job. To be more specific, the ties that are most helpful for finding new jobs tend to be moderately weak: They strike a balance between exposing you to new social circles and information and having enough familiarity and overlapping interests so that the information is useful. The findings are important not just for job seekers; they also have implications for managers seeking to hire new people. (Harvard Business Review)
Technology
Moscow will intensify its cyber efforts to pressure the sources of Ukraine’s military and political support both domestic and foreign, according to Microsoft Corp. In a post on the company’s “On the Issues” blog, Clint Watts, general manager of Microsoft’s digital threat analysis center, urged customers to prepare for more Russian cyber attacks over the winter. (Bloomberg)
CVS is testing a system that allows pharmacists to process prescriptions in part remotely, a move it said could improve store working conditions and the experience for customers as the company grapples with a shortage of pharmacists. CVS has equipped roughly 8,000 of its more than 9,000 U.S. drugstores with technology that allows pharmacists to review and enter prescription information remotely while still meeting patient-privacy requirements. (Wall Street Journal)
Apple Makes Plans to Move Production Out of China: The iPhone maker is looking to further diversify the supply chain that has powered its growth. (Wall Street Journal)
Mass shipments of Apple's long-rumored AR/VR headset may be delayed until 2H23 due to unspecified "software-related issues," according to the latest information shared today by tech analyst Ming-Chi Kuo. (MacRumors)
Amazon has started rescinding job offers it had extended to new hires in its retail organization, a sign that the ecommerce giant’s cutbacks have moved beyond its devices division where recent layoffs were concentrated. Representatives from the retail organization, which is led by Amazon’s CEO of Worldwide Amazon Stores Doug Herrington, this week began calling people who were due to start in January to tell them their jobs were being rescinded, according to two people who had offers rescinded. (The Information)
Researchers from Disney have revealed FRAN, a new artificial intelligence tool that can convincingly age or de-age an actor in a fraction of the time it took previously. In an academic paper, Disney Research Studios explains that FRAN (which stands for face re-aging network) is a neural network that was trained using a large database containing pairs of randomly generated synthetic faces at varying ages, which bypasses the need to otherwise find thousands of images of real people at different (documented) ages that depict the same facial expression, pose, lighting, and background. (The Verge)
Smart Links
FT European Business Schools Ranking 2022: HEC Paris is No. 1. (Financial Times)
Business-Software Companies Say Customers Are Pulling Back. (Wall Street Journal)
Who will be Disney's next CEO? Here are the top contenders to succeed Bob Iger. (CNBC)
Delta Air Lines Offers Pilots 34% Raises Over Four-Year Deal. (Wall Street Journal)
How flexibility made managers miserable. (BBC)
The Passion of Cathie Wood: Why the ‘Wackiest Portfolio Manager on Earth’ Isn’t Losing Faith. (The Information)