Good morning. It is Monday, January 30th.
It probably wasn't the greatest week for the people-first language speakers, as the Associated Press had to apologize after the AP Stylebook deleted a tweet and claimed that “‘the’ terms for any people can sound dehumanizing and imply a monolith rather than diverse individuals.”
The biggest news agency in the US was ridiculed on the platform for warning journalists against referring to French people as…‘the French’, as the tweet prompted the French embassy to briefly change its name to the “Embassy of Frenchness in the United States”, with others poking fun at how “dehumanizing being considered one of the French” is. The AP suggested beating around the bush instead and coming up with disingenuous phrases such as “people with incomes below the poverty line,” in contrast to referring to poor people as “the poor”.
On the other side of the pond, some folks from the British Museum suggested referring to mummies as “mummified persons” to emphasize that they were once living people, instead of, you know, returning the mummies to Egypt and other countries where they rightfully belong.
- Here's some fine Arabic Jazz for a change. I wonder if these songs are on the display in the British Museum, as well.
—Atilla, with Özlem and Can
Year-to-date price changes. Prices at markets close.
• One of the busiest weeks ever, with rate decisions from the FOMC, ECB and BOE, we will have results from tech giants like Alphabet, Amazon, Apple and Meta as well, as earnings season rages on.
Eurozone economic sentiment.
Eurozone, Germany GDP; Germany inflation, unemployment; US consumer confidence; China PMI.
Fed rate decision; Eurozone inflation, unemployment; Global manufacturing PMIs.
ECB rate decision; BoE rate decision.
Eurozone PPI; Global services PMIs; US non-farm payrolls.
• The Spanish economy expanded by a faster-than-expected 5.5% in 2022 as the country avoided a recession in the final quarter despite fears of a global slowdown, official data showed on Friday. Spain's GDP grew 0.2% in Q4 from the previous quarter and 2.7% from the same period a year prior, the National Statistics Institute said on Friday, both beating market forecasts.
- Furthermore: The final GDP data beat both the original official forecast for the year, which was 4.5%, and the 5% anticipated by the government in late 2022. Madrid expects GDP growth will slow to 2.1% in 2023, though many analysts expect a sharper slowdown.
• Italian Premier Giorgia Meloni held talks in Libya on Saturday with officials from the country’s west-based government focusing on energy and migration. During the visit, Italy’s state-run energy company Eni signed a gas deal worth $8 billion with Libya’s National Oil Corporation to develop two Libyan offshore gas fields — the largest single investment in Libya’s energy sector in more than two decades.
• US consumer spending fell a seasonally adjusted 0.2% month-on-month in December, the Commerce Department said Friday, registering the second straight monthly drop despite a key inflation measure easing. Meanwhile, personal income increased by 0.2% in December from the prior month, compared with a 0.3% increase in November and 0.8% in October.
- Inflation: The personal-consumption expenditures price index, the Fed’s preferred indicator of inflation, rose 5% in December from a year earlier, after increasing 5.5% in November. The core PCE-price index, which removes volatile food and energy prices, rose 4.4% year-on-year in December, its slowest pace since October 2021 and down from 4.7% in November.
• Core consumer prices in Tokyo, a key gauge of Japan’s nationwide trends, rose 4.3% in January from a year earlier, marking the fastest annual gain in more than four decades and keeping the Bank of Japan under pressure to phase out economic stimulus.
• German arms maker Rheinmetall is set to greatly boost the output of tank and artillery munitions to meet strong demand in Ukraine and the West, CEO Armin Papperger told Reuters. He added that Rheinmetall is also in talks with US defense contractor Lockheed Martin to manufacture the HIMARS (High Mobility Artillery Rocket System) multiple rocket launchers in Germany.
- Furthermore: Rheinmetall had a record year in 2022 and is approaching an order backlog of €30 billion, CEO Armin Papperger said, adding that Q4 would even beat good Q3 results. The company sells a whole range of defense products but is probably most famous for supplying the 120mm gun of the Leopard 2 tank.
• Ford executives have indicated they are willing to hold talks with unions over planned structural changes at the US automaker's plants in Germany, the head of the worker's council at Ford's Cologne plant said on Saturday. A union representative said no date for talks had been agreed upon and that Ford had yet to give details on what their restructuring plan entails.
- A step back: Ford said on Jan. 20 that its planned shift to electric vehicle production will require unspecified structural changes, giving rise to fears of job cuts at its German production sites. German union officials said on Wednesday that Ford would decide by mid-February how many jobs to cut in Europe.
• Italy initiated talks with Germany’s flagship airline Lufthansa to sell a minority stake in ITA Airways —the successor of Alitalia— in a move that may kick off aviation industry consolidation in Europe. Italy’s finance ministry on Friday signed a letter of intent with the German carrier, the government said in a statement, but provided no additional information.
- A step back: Earlier this month, Lufthansa submitted a bid to buy the remaining shares "at a later date." Further talks will primarily focus on the form of a possible equity investment, and the commercial and operational integration of ITA into Lufthansa, the airline said at that time.
• H&M blamed high clothes prices, a strong US dollar, its exit from Russia, and a cost-cutting program for a large decline in its earnings as it struggles with profitability. Operating profit plunged 87% to 820 million Swedish Krona ($73mn) in the quarter to the end of November from the same period a year earlier, well below expectations of 3.7 billion Swedish Krona (€330mn).
- Zoom in: Shares in H&M fell as much as 7% on Friday, having lost nearly half of their value since their peak in April 2021. The Swedish retailer lags behind Inditex, the Spanish owner of Zara, in both sales and profitability.
• Sabato De Sarno was named creative director of Gucci, Kering’s biggest brand, as it seeks new direction after a period of underperformance. De Sarno will start his new role as soon as he completes his obligations at Valentino, Kering said on Saturday, following the exit of star designer Alessandro Michele in late 2022.
- Why it matters: Gucci brings in more than half of annual revenue and three-quarters of operating profit for the Paris-based luxury group, which is owned by the billionaire Pinault family.
• Chevron reported record earnings for 2022 but its Q4 profits slipped from previous quarters, suggesting the cash surge at oil majors is cooling after fossil fuel prices retreated from near all-time highs in the wake of Russia’s invasion of Ukraine. The US oil supermajor’s Q4 profit of $6.4 billion was down sharply from $11.2 billion in Q3 and well below forecasts of $8.2 billion, but up about 25% from the same period a year earlier.
- A step back: Chevron on Wednesday announced a $75 billion share buyback scheme, its largest ever and equivalent to roughly a fifth of the company’s current market value. It also increased its quarterly dividend by 6% to $1.51 a share.
- Looking ahead… Chevron’s results kick off Big Oil’s earnings season, in which the western oil supermajors —including ExxonMobil, Shell, BP, and TotalEnergies— are expected to report a record combined profit haul of about $200 billion in 2022.
• Salesforce appointed three new directors to its board on Friday as the software giant seeks to fend off criticism from activist investors amid a broader tech downturn. The US group has appointed Arnold Donald, former CEO of cruise operator Carnival; Sachin Mehra, CFO of Mastercard; and Mason Morfit, CEO of ValueAct Capital, an activist fund that is also an investor, reported Financial Times.
• Russian forces fired some 299 rockets and artillery shells at the Ukrainian town of Vuhledar to the southwest of Donetsk on Friday, the Eastern Grouping of the Ukrainian Armed Forces said. "The goal of all these aggressive actions in this direction, and in the direction of Bakhmut, is to capture our Ukrainian Donbas," spokesperson Serhii Cherevatyi added.
- On the other hand: Ukraine and its Western allies are in "fast-track" talks on sending long-range missiles and military aircraft to the country, an adviser to Ukrainian President Volodymyr Zelenskiy said on Sunday. Mykhailo Podolyak added that Ukraine’s supporters in the West understand the need to supply planes capable of providing cover for the tanks the US and Germany pledged earlier this month.
• The foreign ministers of Sweden and Finland said in separate interviews that the process for their countries to join NATO is continuing despite Turkey’s president saying Sweden shouldn’t expect his country to approve its membership. Swedish Foreign Minister Tobias Billström said Turkish anger over recent demonstrations and the burning of the Quran complicated the process, but Sweden is hopeful of joining NATO this summer.
- Russian ties? Finland’s foreign minister Pekka Haavisto hinted that Russia may have been involved in last week’s Quran-burning protest by Rasmus Paludan that threatens to derail Sweden’s accession to NATO. Swedish PM Ulf Kristersson said, "There are forces both within Sweden and outside who wish to hinder Sweden’s membership in NATO."
• French PM Elisabeth Borne said raising the minimum retirement age to 64 from the current 62 was "non-negotiable." After union protests against the change brought out over a million people into the streets on Jan. 19, the government said some rules, such as the number of contributing years needed to qualify for a full pension, can be negotiated, but the age limit was not up for discussion.
via France 24
• UK PM Rishi Sunak fired the chairman of the governing Conservative Party for a "serious breach" of ethics rules in failing to come clean about a tax dispute. Nadhim Zahawi has been investigated following claims he had paid a penalty as part of a reported £4.8 million (€5.47mn) settlement with tax officials and did not declare the dispute with tax authorities.
• Petr Pavel, who formerly served as NATO’s highest-ranking military officer, won the Czech presidential elections securing 57.9% of votes with 98% of polling districts counted. Andrej Babis, a chemicals, farming, and media magnate known for his clashes with the EU, had 42.1% of the run-off votes. Pavel pledged to keep the country aligned with the West and bridge society’s political differences.
• Japan and the Netherlands reached an agreement with the US in restricting exports of chip manufacturing tools to China, making it harder for the Chinese military to develop advanced weapons. The US imposed unilateral export controls that limited the sales of chipmaking equipment to China three months ago and has been negotiating with Japan and the Netherlands for two years.
- Zoom in: Europe’s biggest chip-equipment maker ASML said the agreement shouldn’t have a "material effect" on the expectations it has published for 2023. Spokesperson Monique Mols said, "Before [the agreement] will come into effect it has to be detailed out and implemented into legislation which will take time."
• The US and the EU announced an agreement to speed up and enhance the use of artificial intelligence to improve agriculture, healthcare, emergency response, climate forecasting, and the electric grid. The initiative will give governments greater access to more detailed and data-rich AI models to improve the speed and efficiency of government operations and services.
• Sciences Po, one of France's top universities, has banned the use of ChatGPT, an artificial intelligence-based chatbot that can generate coherent prose, to prevent fraud and plagiarism. ChatGPT has already been banned in some public schools in New York City and Seattle, according to US media reports.
• Intel lost $8 billion in market value after it predicted a surprise loss for Q1 and announced a revenue forecast of $3 billion, below market estimates. The chipmaker has struggled with slowing growth in the data center business while trying to reestablish its dominance in the sector by expanding contract manufacturing and building new factories in the US and Europe.
• US prosecutors asked a federal court to ban Sam Bankman-Fried from using the messaging app Signal to prevent the fallen entrepreneur from contacting his former colleagues. His recent communication with the general counsel of FTX's US arm over Signal and email was "suggestive of an effort to influence Witness-1's potential testimony," court documents state.
❄️ Story: Spellbinding polar night gets darker in warming Arctic
🧠 The evidence is clear: Learning styles don’t exist
📱 Unpacked 2023: What to expect from Samsung's February event