From more military drills in the East to Fat Bear Week – Here’s your October 6 news briefing
To start off, we’re looking into:
The US and Philippines launch combat drills
Tensions have been on the rise lately between the US and China, which claims self-governed Taiwan as its territory. Now, the US and the Philippines have launched joint naval exercises off the Philippine coast.
Through October 14, these drills will involve 2,550 American and 530 Filipino troops and will include island-based exercises, live fire and humanitarian aid. Japan and South Korea are also joining the exercises as observers.
At the same time, local fishermen are opposed to the drills, saying it could worsen the South China Sea situation, as China may respond with its own military activities there. Local fisher organization Pamalakaya’s vice-chair Bobby Roldan called for “demilitarization of the country’s fishing grounds” so they “could fish in peace.”
Virgin Atlantic drops Hong Kong
Hong Kong has seen a slew of travel changes lately, having dropped all hotel quarantine restrictions for arrivals less than two weeks ago. For the most part, this has been good news for the travel industry. Hong Kong’s Travel Industry Council expects outbound travel to boost as much as 50% in the coming months.
But now, something else is getting in the way of travel in and out of Hong Kong: Russia. Yesterday, British airline Virgin Atlantic announced it’s stopping operations in Hong Kong because of complications caused by the closure of Russian airspace. At the moment, it looks like that airspace is going to remain closed; no one can predict if or when commercial flights will be allowed to go through. So, Virgin Atlantic’s Hong Kong office is closing after about 30 years in the city, and its regular route from London to Hong Kong will no longer exist. Virgin did say it still intends to resume flights to Shanghai.
OPEC+ is majorly cutting oil output
With the Russian war in Ukraine, energy prices are all out of wack globally. In the US, there are fears that higher prices at the pump will affect the upcoming midterm elections, and Europe is worried about whether or not it will have enough energy to get through the winter.
Well, the group of oil-producing countries called OPEC+ just announced its most recent production targets, and for the low-cost energy lovers in the world (of which there seem to be many), it isn’t great news. The group plans to cut oil production by 2 million barrels a day, which is more than the 1 to 1.5 million barrels per day experts expected them to cut at today’s meeting.
This means that the price of energy, especially oil and gas, is going up, which will make it even harder for countries to get the energy they need to keep homes warm this winter, placing more pressure on global inflation.
To end, we’ll look into:
Spotify is looking to overcome its misinformation woes
Spotify is buying a company called Kinzen, an AI startup that specializes in getting software to recognize potentially harmful things that people say. Think things like calls to violence, racist language or even “dog whistles,” something seemingly tame on the surface that an audience understands to be much darker. Kinzen claims its tech can detect all of that.
So what does Spotify have in this game? Well, it’s looking to use it to do a better job of overseeing content on its platform, which is a tough task considering it saw over a million podcasts added last year from independent creators.
See, Spotify has gotten in hot water in the past because of some of the podcasts it hosts and, even more, the ones it chooses to invest in. The big kahuna in this instance is Joe Rogan’s podcast, “The Joe Rogan Experience.” Back in 2020, Spotify and Rogan signed a deal worth what some people believe is more than US$200 million to make the show exclusive on the platform. The idea for Spotify was to bring in a bunch of listeners from Rogan’s original stomping grounds on YouTube.
But Rogan is notorious for being loose-lipped and controversial. He’s used racial slurs repeatedly in the past, and during COVID, he brought on anti-vaxxers that spread misinformation about the vaccines. Well, more than 270 doctors disagreed and signed a letter urging Spotify to take the episode down. On top of that, several artists pulled their music from the platform.
So all that is to say Spotify is working on spotting and getting rid of misinformation. Hence, the Kinzen acquisition, which will mean that Spotify can use the tech to keep people from getting hurt because they took advice from the wrong podcasts. Whether the line falls nearer to content moderation or censorship – we’ll let you decide.
In other news …
📉Stocks: MSCI’s global gauge of stocks dipped 0.46% to 2,500.08.
- S&P 500 slipped 0.20% to 3,783.28.
- Nasdaq Composite is down 0.25% to 11,148.64.
- Dow Jones dipped 0.14% to 30,273.87.
- Hang Seng Index boosted 4.90% to 18,087.97.
🧠Some quick factors to bear in mind:
- Hopes that a slowing economy could dampen the Fed’s approach of large interest hikes are starting to dim. Private employment rose a lot in September, topping estimates, and the ISM report released yesterday shows the service sector shrank less than expected. Now, traders await Friday’s release of the nonfarm payrolls report.
- Meanwhile, in Hong Kong, traders pulled back on bets of US rate hikes for 2023 after the weaker manufacturing report released earlier this week. The Hang Seng Index bounced back about 6%, its biggest gain since mid-March. Tech stocks led the boost, with Alibaba, NetEase and Tencent making big gains.
- According to Morgan Stanley, stocks in emerging markets and Asia (excluding Japan) are almost done with their bear-market cycles.
- China’s market is still closed for Golden Week.
👄Some comments and chatter:
- “The market’s making the assessment that it’s really going to take a lot for the Fed to make a dovish pivot. Yes, the JOLTS number was extremely welcome, no question about that. But that is really the tip of the iceberg in terms of what the Fed needs to actually take a softer tone. There’s some reality creeping into the market and that enthusiasm of a good number is starting to fade,” said Yung-Yu Ma, chief investment strategist for BMO Wealth Management.
- “A lot of wood has been chopped [and] it’s time to plant saplings for next cycle. [Investors should] rotate towards proven early-cycle beneficiaries,” Morgan Stanley strategists including Jonathan Garner wrote about Asian markets.
🛢Oil: Oil prices continue to rise, especially now that OPEC+ is cutting oil output by 2 million barrels per day, which is about 2% of global supply. These are the steepest cuts since the 2020 start of the COVID pandemic. Brent crude went up 1.7% to US$93.37 a barrel. US crude boosted 1.4% to US$87.76 per barrel.
👛Bitcoin: Bitcoin fell 0.75% to US$20,192.40 at time of writing.
🗺Russia has more flags: Even though Russia is losing ground in the areas it had been occupying, Putin is still pushing to annex these four provinces. And now, he’s claiming ownership of the Zaporizhzhia nuclear power plant. The company actually running the plant from Kyiv called Putin’s decree “worthless" and “absurd."
💣South Korea & the US fire missiles: The US and South Korea partnered up to run some missile drills after North Korea flew a missile over Japan. The US also warned North Korea that if it keeps up its “provocations," it will end up even more isolated.
✈Taiwan’s new warnings to China: Taiwan is ready to treat any sighting of Chinese aircraft in its airspace as a “first strike." This decision comes after closer flights by Chinese warplanes and drones.
❓Iran investigates death of protester: As protests continue in Iran over the death of Mahsa Amini, violence against protesters has only led to more outrage. Now, Iranian prosecutors have opened an investigation into the death of teenage girl Nika Shakrami during an early protest in Tehran. She’s effectively become a symbol for the ongoing anti-government movement.
💲Russian oil price cap likely to go forward: The G7 is looking to limit Putin’s cash flow by cutting how much they’re willing to pay for Russian oil. Now, they have a December 5 deadline to figure out exactly how to do that. Oil is Russia’s greatest source of income, so this could be the first effective blow to Putin’s wallet.
🏨Chinese buyers are really into Singapore condos: Since 2016, mainland Chinese buyers have been Singapore’s biggest foreign buyer group in its property sector. Now, they’ve purchased the highest number of Singapore’s private apartments this year compared to other foreigners.
🤑Google to pay US$85 million: A couple of years ago, the Arizona Attorney General sued Google for (allegedly) getting people’s location data even after they tried to turn off the location data settings. Now, Google just settled the suit for US$85 million and agreed to correct the description of what its Location History setting does – but that’s about it.
🌎Greenpeace vs. Liz Truss: Demonstrators from the environmental protection group Greenpeace interrupted Liz Truss’s first speech as UK PM. Two activists held up a flag that read “Who voted for this?" and were then escorted from the conference center by security guards as the crowd booed.
🍏Will Apple have to give up its charger? On Tuesday, the EU passed a law requiring uniform charging cords for all smartphones and mobile devices, which could be bad news for Apple and its proprietary accessories. The law calls for most of these devices to have a USB-C charging port by the end of 2024, extending that time for laptops to the spring of 2026.
🚀SpaceX heads to space station (with a Russian): In a show of cooperation between the US and Russia (despite Ukraine war tensions), Russian Anna Kikina joined the crew on the SpaceX capsule headed for the International Space Station Wednesday. This is the first time a Russian cosmonaut has ridden a US spacecraft to orbit in 20 years. The crew is also led by the first Indigenous woman sent to orbit by NASA.
🦜Stranded parrots rescued: 275 parrots were rescued after being stranded by Hurricane Ian. Couple Will Peratino and Lauren Stepp launched a rescue mission (Operation Noah’s Ark) to get the birds (and two lemurs) off of Pine Island, Florida, where they live in a sanctuary they own.
🐻Fat Bear Week: It’s Fat Bear Week for Katmai National Park in Alaska. Start getting your votes in now to choose which one will be crowned the supreme fat bear in this March-Madness style bracket. You can use whatever criteria you want to decide which bear is best. The winner will be crowned next Tuesday. We’ve got our money on 856.
Written and put together by Jake Shropshire, Vanessa Wolosz, Christine Dulion and Krystal Lai