News from January 26 - February 1st, 2024
Fed Won’t Budge on Rate Cuts
The Federal Reserve announced its monthly interest rate decision on Wednesday. The central bank has kept interest rates steady during its last three meetings. With inflation receding to 3.4% in December, investors are anticipating rate cuts at some point in 2024.
At Wednesday’s meeting, the Fed decided to maintain the Federal Funds Rate between 5.25 and 5.5 percent. Federal Chair Jerome Powell indicated that he sees it as unlikely that they’ll drop rates at their March meeting either. US markets receded rapidly in the aftermath of the news, with the S&P 500 declining over 1.63% on the day.
As the world’s biggest economy, the state of interest rates in the US could impact investors around the world.
China’s Real Estate Giant Faces Liquidation
Evergrande, a massive Chinese real estate company, was ordered to liquidate its holdings this week in order to repay creditors. At one point, Evergrande was a leading figure in the global real estate market with a valuation of $50 billion. But, the company now owes roughly $340 billion to its creditors.
The potential bankruptcy of Evergrande raises concerns about global financial repercussions involving banks, lenders, and investors. However, with 90% of its assets rooted in mainland China, the impact is likely to be contained, minimizing the risk of widespread economic turbulence.
All Eyes on Apple and Microsoft
US tech giants Apple and Microsoft reported earnings this week. Apple has faced headwinds recently, such as four quarters of declining earnings, issues with the Apple Watch Ultra’s heart rate sensor patent, and rumors of falling iPhone sales. But, the tech giant has reportedly already sold 200,000 Vision Pro VR headsets.
Microsoft issued an impressive earnings beat this week. Its strong sales were fueled by its investments in OpenAI (parent of ChatGPT) as well as its own suite of AI tools.
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- New app combines browser, internet search, and AI. Arc Search might be changing the way we browse the internet, with its ability to reference the web in real-time, aggregate its findings, and quick responses to queries. (Source)
- Toyota slams electric vehicles, says they’ll never catch on. Chairman Akio Toyoda sees the latest EV trends as a warning that the market will shift towards EV hybrids, hydrogen, and fuel cell-powered cars. Despite the industry's rapid shift towards electrification, Toyota's cautious stance and slow adoption of EV technology have raised eyebrows among shareholders. The company defends its strategy, advocating for a "multi-pathway" approach as the most effective route to carbon neutrality, balancing innovation with prudence in the evolving automotive landscape.(Source)
- DEA seized $330 million in Bitcoin that was linked to illegal drug sales. The culprit, Banmeet Singh, an Indian national who was deported from the UK to the US, was accused of using dark web sites to sell illegal drugs to customers across the United States. The forfeiture involves more than 8,100 bitcoins, valued at $150 million at the time of seizure but now worth over $330 million. (Source)
- Remote workers are fired more often. A new report shows that employees who work from home are 35% more likely to be impacted by layoffs. Experts attribute this trend to managers’ perceptions, as they often consider in-office employees to be higher performers. Expert: “When a hiring manager gets news they have to cut 10% of the staff, it’s easier to put someone on the list you don’t have a close personal relationship with.” Researcher: “They will on average be more likely to lay off those who are working remote than those who are coming into the office. Simply put: it’s out of sight, out of mind.” (Source)
- Woman outsmarts Apple Pay. A TikToker unveiled a potential hack for snagging free snacks, drinks, and condiments on planes, claiming “They can’t charge you while you in the sky” in a video she posted on the platform with over 1.1 billion users along with a caption that read “Life hack AND KEEP THAT CARD LOCKED.” It seems like other TikTok users were already privy to this type of in-air trickery, like one person who wrote: “Now why u gone tell our secrets.” Another user, claiming to be a flight attendant, commented, "Lol I’m a flight attendant and it shows us when it’s locked you get charged as soon as we hit the ground." (Source)
Disclaimer: This blog offers insights into international business and global events for informational purposes only. It is not intended as investment or business advice. WeavePay is not liable for any decisions made based on the content provided.
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