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INTERNATIONAL MARKETS
BUSINESS
POLITICS | WORLD
TECHNOLOGY
APOSTO PICKS

🦊 Fox in the henhouse

US consumer prices fall for the first time in more than two years, more than half of German companies report labor shortage, Volkswagen reports lowes sales in over a decade

DW

Good morning. Today is Friday, January 13th.

The United Arab Emirates appointed the head of state oil giant Abu Dhabi National Oil Company to lead the COP28 climate talks in Dubai later this year. Climate activists and NGOs reacted to the appointment saying there is a clear conflict of interest between Sultan al-Jaber’s role in one of the largest oil companies in the world, and his position at COP28. "This appointment goes beyond putting the fox in charge of the henhouse," said Teresa Anderson, global lead on climate justice at ActionAid.

  • Today, a best-of playlist in honor of eight-time Grammy winner guitarist Jeff Beck, who passed away at 78 on Wednesday. Play it through your daily news and take it into the weekend.

—Özlem, with Tanem and Can

INTERNATIONAL MARKETS

US inflation fell for the first time in more than two and a half years in December amid a sharp drop in gasoline prices, the Labor Department reported Thursday. The consumer price index fell 0.1% in December, meeting expectations, for the biggest drop since April 2020. Core CPI, which excludes volatile food and energy prices, rose 0.3%. On an annual basis, headline CPI rose 6.5% while core increased 5.7%.

US CPI

via CNBC

  • Furthermore: The report could allow the Federal Reserve to further scale back the pace of its interest rate increases, amid its fastest rate hiking cycle since the 1980s, though the labor market remains tight.
  • European markets: After the data was revealed, the euro hit a seven-month high and European shares dipped. Meanwhile, Germany's 10-year bond yield, the benchmark for the eurozone, briefly trimmed some of its earlier falls.

Eurozone consumer expectations for inflation eased in November for the first time since May 2022, according to a monthly survey by the European Central Bank, following the most aggressive round of interest-rate hikes in the ECB’s history. Expectations for inflation over the next 12 months declined to 5% from 5.4% in October while expectations for economic growth for the next 12 months improved to -2% from -2.6%.

Eurozone consumer inflation expectation

via Bloomberg

China’s consumer prices rose 1.8% year-on-year in December, data from the National Bureau of Statistics (NBS) showed on Thursday, rising faster than the 1.6% annual gain in the prior month and matching analyst estimates. Meanwhile, the annual rate of fall in producer prices slowed to 0.7% from 1.3% in November versus expectations of a 0.1% decline.

China CPI, PPI

via Reuters

  • Zoom out: The changes were driven by rising food prices even as domestic demand wavered amid the disruption of industry by a high number of Covid-19 cases towards the end of 2022. Economists expect inflation to continue to pick up in the first quarter of 2023.

The world is moving into "a new age of clean technology manufacturing" that could be worth $650 billion per year and generate 8 million more jobs by 2030, according to a new report from the International Energy Agency published Thursday. The report also warned of "potentially risky levels of concentration" in supply chains and added China is dominating both the production and trade of "most clean energy technologies."

BUSINESS

More than half of German companies are struggling to fill vacancies due to a lack of skilled workers, the German Chambers of Commerce and Industry said on Thursday, with the total labor shortage for Europe's largest economy nearing 2 million and loss of output estimated at about €100 billion.

German industry

via Reuters

  • Zoom in: 53% of companies reported hiring difficulties, its highest level ever, the DIHK found in its survey of 22,000 companies. Broken down in sectors, 67% of electrical equipment manufacturers and mechanical engineering companies reported labor shortages while 65% of automakers said they were unable to fill vacancies.

The Volkswagen Group reported its lowest sales in over a decade in 2022, due mainly to supply chain issues from Covid-19 lockdowns in China and the war in Ukraine. The German automaker said on Thursday it delivered 8.3 million vehicles to customers last year, a drop of 7% compared with the 8.6 million sales in 2021 and behind Japan’s Toyota for the third consecutive year.

  • Looking ahead… Group sales were up 12% in the second half of 2022, but the full-year figure was dragged down by a lackluster performance in the first half. Sales rose 14.3% in Q4 of the year, but the outlook for 2023 remains clouded by weak economies and supply chain shortages, the automaker said.

Swedish state-owned mining company LKAB found the largest known deposit of rare earth minerals in Europe in Sweden’s Arctic. The deposit contains more than 1 million tons of rare earth material, with the potential to help the continent break free from China’s dominance in the market for resources. CEO Jan Mostrom said it would take at least 10-15 years to begin mining due to permitting processes.

Arctic town of Kiruna, Sweden

via Bloomberg

Disney appointed Nike veteran Mark Parker as its next chair, as the company prepares to resist activist investor Nelson Peltz’s attempts to take a board seat. Peltz launched a battle to rescue the entertainment giant from what he called a "crisis" of overspending on the streaming business and failed succession planning. But his moves challenge Bob Iger, who recently returned from retirement to lead the company a second time.

Taiwan Semiconductor Manufacturing Company posted strong financial earnings with a 78% increase in net profit year on year. But the world’s largest contract manufacturer of chips gave a cautious outlook for 2023, saying it expected a "slight growth year" due to a cyclical downturn in the chip industry. TSMC’s shares fell 27% in 2022 as the pandemic boom for electronics was coming to an end.

Ubisoft’s shares fell by 21% on Thursday after the French games company reduced revenue guidance, canceled three titles, and pushed back the release of its upcoming Skull and Bones game. The shares of the company, which is best known as the publisher of hit franchises including Assassin’s Creed and Far Cry, hit their lowest level in almost seven years with prices as low as €18.80. 

POLITICS | WORLD

Russia said on Thursday its forces are getting closer to seizing the salt-mining town of Soledar in the Donbas region, which would mark an elusive victory for the Kremlin and its Wagner group, but come at the cost of heavy Russian casualties and extensive destruction of the territory they claim. Russian forces are using mortars and rockets to bombard Soledar in an unrelenting assault, struggling for a breakthrough after military setbacks.

Soledar

via DW

  • The response: Ukraine said on Thursday the "fiercest and heaviest" fighting is taking place in the eastern town of Soledar, where the situation is "difficult." Donetsk Governor Pavlo Kyrylenko said more than 100 Russian troops were killed in Soledar over the past 24 hours.

French oil workers' unions called for strikes on Jan. 19, Jan. 26, and Feb. 6, over President Emmanuel Macron's pension reform that plans to raise the legal retirement age by two years to 64. The planned walkouts would include "shutdowns of refinery installations if necessary," threatening a repetition of refinery and depot shutdowns that caused chaos for motorists last year.

CGT union, Paris

via France24

The EU and the UK are preparing to enter negotiations starting Jan. 16 aimed at solving the post-Brexit Northern Ireland protocol dispute that has to do with their trading relationship, Bloomberg reported.

  • Bottom line: The dispute stems from London’s request to eliminate customs controls on goods being imported to Northern Ireland from the island state, whereas the bloc views this as a possible threat to the trade union.

European Court of Justice ruled against a Polish court, saying that employers cannot terminate contracts based on someone's sexual orientation. The case revolves around a TV freelancer who was fired for publishing content promoting support for same-sex couples, and could not win after suing the broadcaster for damages and compensation.

  • In other news: ECJ ruled that travelers may get refunds over the trips canceled or ruined due to Covid-19 restrictions, after being asked for its opinion by a German court.

Hungary's government is ready to loosen political control over universities overseen by "public trusts" that put ministers in top positions after the EU shut most universities out of the bloc's flagship Erasmus program and academic funding for lacking academic freedom.

The United Arab Emirates announced the appointment of Abu Dhabi oil chief Sultan al-Jaber as the president of the COP28 climate summit, which provoked a furious backlash from climate activists and civil society groups as al-Jaber leads one of the largest oil companies in the world.

TECHNOLOGY

FTX co-founder Sam Bankman-Fried denied allegations that he stole billions in user funds and suggested that Binance CEO Changpeng Zhao conducted a monthslong effort to bring down FTX. SBF wrote his most detailed description of the FTX debacle in a blog post, saying, "I’ve been, regrettably, slow to respond to public misperceptions and material misstatements."

SBF

via CNBC

Apple is working on adding a touchscreen to Mac computers, according to a report by Bloomberg. The feature would defy long-held company orthodoxy and embrace an approach that co-founder Steve Jobs once called "ergonomically terrible." MacBook Pro laptops with touchscreens could be released as early as 2025.

Virgin Orbit said on Thursday it had begun "active discussions" about returning to the UK for another attempt at launching satellites into orbit, despite Monday’s failed mission from Britain’s first spaceport in Cornwall. The US-based company is having discussions with the government and customers about launch opportunities "as soon as later this year."

Virgin Orbit

via FT

Porsche is considering fully integrating Google software into its car cockpit, despite previously being reluctant "because Google asked for too much data to be shared." The deal would allow Porsche customers to access Google applications like Google Maps and Google Assistant without needing to connect the car to an Android phone.

  • On a related note: Ferrari’s Formula One Team has ended its partnership with blockchain technology company Velas, as deals between sports companies and firms in the struggling cryptocurrency sector continue to dissolve. According to the 2021 agreement, Velas would create digital content for fans of Ferrari’s Scuderia racing division.
APOSTO PICKS

⚖️ Elections versus the rule of law: Illiberal leaders don't like independent judges

☀️ Good day sunshine: The energy crisis and Europe’s astonishing luck

🌽 Economic history: The golden fuel

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