To start off, we’re looking into:
What’s going on with the global economy?
A lot of people aren’t feeling great about the economy right now. For example, Jamie Dimon said to brace for an “economic hurricane,” many experts are warning about an impending recession and the World Bank has cut global growth forecasts, warning us about stagflation.
On top of that, according to a new poll conducted by The Economist and YouGov, 55% of adults believe the US is currently experiencing a recession. 21% don’t believe the country is in a downturn, and 24% said they weren’t sure.
But there are still some optimists out there who think that the economy will end the year on a high note. Some of them, like economist Neil Dutta, argue that some significant factors are finally settling down after years of COVID, like low labor participation rates and high demand for durable goods, which have both contributed to inflation. Dutta suggests that as things get back to business as usual, the Fed should have an easier time dealing with inflation.
Others, like JPMorgan’s Marko Kolanovic, have pointed out that China is recovering from COVID, and as a result, its markets are being resuscitated. “Any incremental improvement from the lifting of lockdowns, relaxing regulations, and further stimulus, should be beneficial for Chinese stocks in the coming quarters,” Kolanovic wrote to clients earlier this week.
Hong Kong’s COVID sitch
Hong Kong has seen recent COVID clusters suspected to originate from partygoers in the Central district. Cases are now going over 500 per day, the highest in six weeks. With that, rumors have been circulating about whether this will lead to a retightening of COVID rules. Chief Executive Carrie Lam has come out to say, though, referencing her last day in office, that “arrival requirements and social distancing measures will be maintained until June 30.” So, in other words, while there will be no easing, there won’t be any tightening.
This is even as there has been talk of President Xi visiting Hong Kong next month to join celebrations of 25 years of Chinese rule of the city, but SCMP reported that people familiar with the matter have said that Lam and the incoming John Lee were prepared to isolate in preparation for this possible visit.
China hits back over Australia’s jet encounter claims
Over the weekend, Australia’s Prime Minister Albanese said that a Chinese military jet intercepted an Australian surveillance aircraft while doing a routine check of the South China Sea region. Australia called the move a “dangerous maneuver” and said that it was doing this round of checks of the disputed region while abiding by international laws.
Now, Beijing has hit back, denying this version of events and telling Australia to stop provoking the country or else “bear all the serious consequences.” It said that the “response measures taken by the Chinese military are professional, safe, reasonable and legal.”
To end, we’ll look into:
Butt warmers and cabbage – why big stories matter to you
We own it – we talk about a lot of big topics here at TMS. But from economic instability to global energy shortages to a looming food crisis, it can be easy to get lost in the weeds and forget why it matters. So, we wanted to talk about a couple of concrete examples of why it matters to real people.
When it comes to the fuel shortage, the Russia-Ukraine war means that it’s getting harder to buy fuel at a low price, and so it’s getting harder to buy fuel at all. So in Tokyo, government officials are asking citizens to watch a little less TV, turn off the “keep warm” function on their rice cookers and turn off the seat warmers on their toilets, all in the name of conserving energy.
And as much as it sounds like a joke to ask people to turn their butt warmers off, Japan was nearly dealing with blackouts because of power shortages last month. So energy conservation is no trivial matter there.
And when it comes to food shortages, Australia has been grappling with a lettuce shortage. So, KFCs in the country have had to get creative and are starting to put cabbage on sandwiches instead. This isn’t the first time KFC has had to deal with ingredient shortages, though. Earlier this year, the fast-food chain was dealing with a shortage of its most important ingredient, chicken.
We really hope that butt warmers and cabbage substitutions put things into perspective – the stuff happening in the headlines trickles down and affects us all.
In other news …
Stocks, oil and Bitcoin: World shares are back up with the belief that inflation may be peaking. This came after Target said it would be offering big sales in order to get rid of excess inventory, which is being seen as a helpful move in curbing inflation without the Fed hiking rates and slowing the economy too much.
Previously, a factor that helped keep oil prices in check was that tens of millions in China were locked down. But now, oil is up 1% (Brent futures at US$120.57 and WTI crude at US$119.41), with many expecting the reopening to increase oil demand, but there is still no deal with Iran for it to supply the world with oil.
Bitcoin tumbled to under US$30,000 at one point on Tuesday but bounced back at US$31,278.80.
Australia’s rate hike: Australia is also facing record-high inflation. In an attempt to get that in check, the Australian central bank has announced the biggest single rise in the cash rate in 22 years, increasing the cash rate target 50 basis points to 0.85%."
Citigroup’s hiring spree: Citigroup is looking to hire 3,000 new staff in its institutional business to increase its mark in the Asia region, with the bulk of the recruiting done in the Hong Kong and Singapore markets.
World Bank revises numbers: World Bank has revised its global growth forecast down by nearly a third to 2.9%, saying that because of events like COVID and the Ukraine-Russia war, the global economy is going to see "a protracted period of feeble growth and elevated inflation.
Twitter gets ambitious: With Musk threatening to walk away from the US$44 billion Twitter deal if the company doesn’t let him independently verify their user (and bot) numbers, Twitter has held an internal meeting where it set its most ambitious user growth target – 13 million this quarter. In the meeting heard by Reuters, leaders told staff that this is the highest goal the team has set and beats Wall Street expectations.
McConaughey in the White House: Matthew McConaughey, who is originally from Uvalde, Texas, spoke from the White House Tuesday calling for action after the shooting, saying, “We start by making the loss of these lives matter."
The USB-C charger: The days of traveling with three different chargers are coming to an end in the EU. A provisional EU agreement says that all companies creating products ranging from phones to digital cameras will need to use a standard USC-B charger.
Woods is out next week: After suffering a car crash in February of last year, Tiger Woods has announced that he’s sitting out of the 2022 US Open in Brookline, Massachusetts, next week, saying that his body needs time to get stronger.