Macro Links Jan 26th – He Tried to Fire Mueller in June
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MACRO LINKS TABLE OF CONTENTS (Click or Scroll Down)
- DOOMSDAY CLOCK, SOROS
- BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS
- FINTECH, BLOCKCHAIN, DIGITAL PAYMENTS
- FOREX, CARRY TRADES, EXCHANGE RATES
- TRADE, PROTECTIONISM, REGULATION, OVERSIGHT
- TAXATION, WEALTH HAVENS, INEQUALITY
- RUSSIA PROBE
- RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS
- MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
- USA ECONOMY DATA, CITIES AND STATES
- GLOBAL ECONOMY, INTERNATIONAL
- POSITIONING, INFLECTION, MARKET CALLS
- COLOR, EARNINGS, SENTIMENT, VALUATIONS
- CREDIT, YIELD, BUYBACKS, CORPORATES
- DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
- ENERGY COMPANIES, NOCs, INDUSTRY
- ENERGY NATURAL GAS, COAL
- POLLUTION, CLIMATE & ENVIRONMENT
- BREXIT, SCOXIT, LONDON, UK ECONOMY
- DACA, TRAVEL BAN, IMMIGRATION, WALL
- GEOPOLITICS, CRIME, TERRORISM
- PRIVACY, HACKING, CYBERWAR, SURVEILLANCE STATE
- PROPAGANDA, CORRUPTION, AUTHORITARIANISM
- TRUMP WORLD
- ELECTORAL POLITICS
- SILICON VALLEY, UNICORNS, STARTUPS, VC
- CONSUMER TECH, SOCIAL MEDIA, E-COMMERCE, MOBILE
- MEDIA, CABLE, SPORTS, ENTERTAINMENT
- AUTOS, ELECTRIC, SELF-DRIVING
- AIRLINES, SHIPPERS, RAIL, TRANSPORTS
- SCIENCE, NATURE, PSYCHOLOGY
DOOMSDAY CLOCK, SOROS
The Doomsday Clock, a potent symbol of scientific concerns about humanity’s possible annihilation, was advanced by 30 seconds on Thursday, to 2 minutes to midnight, the Bulletin of the Atomic Scientists announced in Washington.
The Bulletin of the Atomic Scientists (BAS) said it had acted because the world was becoming “more dangerous”. The clock is a metaphor for how close mankind is to destroying the Earth. It is now the closest to the apocalypse it has been since 1953.
George Soros said President Donald Trump is risking a nuclear war with North Korea and predicts that the groundswell of opposition he’s generated will be his downfall. “I consider the Trump administration a danger to the world,” the billionaire investor said in a speech from Davos, Switzerland. “But I regard it as a purely temporary phenomenon that will disappear in 2020, or even sooner.” He expects a Democratic “landslide” in the 2018 elections.
“They claim they are merely distributing information. But the fact that they are near- monopoly distributors makes them public utilities and should subject them to more stringent regulations, aimed at preserving competition, innovation, and fair and open universal access,” he said. Soros also compared the companies to casinos, saying they “deliberately engineer addiction to the services they provide.”
BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS
Stock trading app Robinhood is becoming a cryptocurrency broker. Customers in California, Massachusetts, Missouri, Montana and New Hampshire will be able to trade bitcoin and ethereum through the app beginning in February, Robinhood announced Thursday. In the meantime, all customers can now track prices and receive alerts for 16 cryptocurrencies on the app.
“We’re planning to operate this business on a break-even basis and we don’t plan to profit from it for the foreseeable future” says Robinhood co-founder Vlad Tenev. “The value of Robinhood Crypto is in growing our customer base and better serving our existing customers.”
Robinhood Financial LLC’s fine print is a real buzzkill. “Trading in cryptocurrencies comes with significant risks, including volatile market price swings or flash crashes, market manipulation and cybersecurity risks.” The warning hasn’t deterred the 150,000 people who signed up within a few hours to get early access to these new trading privileges.
The burgeoning ICO industry is burnishing Switzerland’s business friendly reputation and sometimes buccaneering spirit — a reputation spoilt by the past decade’s scandals over the help its traditional private banks gave to wealthy clients in evading tax. But it has created a dilemma for Swiss politicians and regulators: just how far should they go in encouraging a digital “wild west”?
Bitcoin, infamous for its volatility, is standing strong in the face of the latest round of scrutiny cascading down from global leaders in Davos. Their words did little to shake Bitcoin. The digital currency was little changed and traded near the $11,000 level its been hovering around for days.
Cryptocurrencies took the stage Thursday at the World Economic Forum (WEF) in Davos, Switzerland, with the global elite event featuring a discussion that centered primarily on the question of whether bitcoin is a currency.
The fintech chief at the Monetary Authority of Singapore (MAS), the country’s de facto central bank, has said that bitcoin is unlikely to cause a global financial meltdown similar to the Lehman Brothers bankruptcy in 2008.
Trading Technologies International Inc., whose products let traders buy and sell on major exchanges, plans to add the cryptocurrency marketplace Coinbase Inc. to its roster of venues in March, according to a statement on Thursday.
Air travelers will soon be able to spend some satoshis in stores and cafes at Brisbane Airport. Major retailers will be accepting several cryptocurrencies, including bitcoin. The promise: “unprecedented digital currency experience” in the airport terminals.
U.K. Prime Minister Theresa May has promised to consider clamping down on Bitcoin as she raised concerns that cryptocurrencies are being used by criminals.
As Nordea Bank AB’s Bitcoin ban for staff has unions questioning the legality of the move, Sweden’s minister in charge of financial legislation says it’s understandable that the industry is resorting to such measures.
Bank of America and Citigroup are reviewing policies that allow customers to buy bitcoin with credit cards. The reviews follow news about two weeks ago that Capital One Financial has decided to prohibit cryptocurrency purchases.
Ironically, Hydro Quebec may have to renege on its commercial power strategy – as forecasts show that they would not be able to meet the booming demand of industries looking to take advantage of the energy surplus in the province. The company is reviewing its plans after 70 cryptocurrency mining operators applied to set up shop in the province in the space of the week.
Former BitConnect investors have filed a class action lawsuit Wednesday, Jan. 24, seeking compensation from the company that was found out to be a Ponzi scheme and has shut down on Jan. 17. The class action complaint states that BitConnect issued cryptocurrency tokens that were actually unregistered securities and collected additional funds via a “wide-ranging Ponzi scheme.”
Some of Silicon Valley’s leading investors are lining up to buy into a much-hyped initial coin offering by Telegram, the encrypted messaging service that is seeking $1.2bn to build a virtual economy within its app. Venture capital firms Kleiner Perkins Caufield & Byers, Benchmark and Sequoia Capital have each told the company they want to invest $20m, according to three people with knowledge of the deals.
Messaging app Telegram started out as a WhatsApp alternative, but it’s fast becoming a petri dish for cryptocurrency get-rich-quick schemes, propped up by dubious trading bots and bogus celebrity endorsements from Christopher Walken and Dwayne “The Rock” Johnson. That may be a problem as it heads toward a possible billion-dollar initial coin offering.
In a recent interview with the Russian news outlet Gazeta, the chairman of the State Duma Committee on Financial Markets, Anatoly Aksakov stated that the current draft of Russian cryptocurrency bill requires government officials to declare their cryptocurrency investments.
Cryptocurrency investments in Russian startups have increased 10 times in 2017 when entrepreneurs set in motion more than 100 crypto-funded projects.
Despite the warnings of the Israeli regulator that it won’t tolerate bitcoin to get somehow backdoor listed on the Tel Aviv Stock Exchange, public companies keep pivoting into the field. The latest example is a firm that focused on oil refineries until now. All of a sudden it announced plans to sell bitcoin ATMs to casinos in Turkish occupied Northern Cyprus, and possibly Nigeria.
The problem is that banks say they have no interest in using XRP. Current and former executives at seven global banks—some of whom have partnered with Ripple—say there was scant chance they would ever entrust their corporate clients’ payments to a cryptocurrency. The executives requested anonymity.
Financial executives and researchers believe bitcoin and gold have an interesting relationship. Over the past year, cryptocurrencies spiked while gold markets slumped, and when gold prices jumped, digital assets dropped in value.
FINTECH, BLOCKCHAIN, DIGITAL PAYMENTS
A bill to recognize blockchain signatures as legal electronics records could move swiftly through Tennessee’s legislature, lawmakers suggested during a hearing on Wednesday.
Companies that sought to piggyback on the frenzy surrounding digital currencies are starting to find themselves saddled with the kind of attention they didn’t anticipate. In a portfolio of 34 crypto-tied stocks, short interest as a percent of shares outstanding has skyrocketed, according to data compiled by Bloomberg.
Noto, who worked on technology, media and telecom deals at Goldman Sachs Group Inc. before joining Twitter in 2014, brings to the job a background in tech and finance. Beyond Twitter’s nascent revival, his turnaround abilities are largely untested. But given his history of taking companies public — including Twitter — a SoFi IPO is very much a possibility, according to people familiar with the situation. Furthermore, they say, it’ll be nice to have an adult in the room after all the recent turmoil.
FOREX, CARRY TRADES, EXCHANGE RATES
President Donald Trump declared that the dollar would continue to strengthen and that remarks made by his Treasury secretary suggesting support for a weaker U.S. currency the day before had been taken out of context.
Only a select few people can move foreign-exchange markets with a handful of words. U.S. Treasury Secretary Steven Mnuchin and ECB President Mario Draghi are two of them. Thursday they clashed, and the ECB clearly has a fight on its hands.
European Central Bank chief Mario Draghi took a swipe at Washington on Thursday for talking down the dollar, a move he said threatened a decades-old pact not to target the currency and might force his bank to change its own policy.
Mr Draghi pointed to an international agreement between economies, including the US, last October not to talk down their currencies. Some of the recent volatility in exchange rates had been caused by “the use of language . . . that doesn’t reflect the terms of reference we have agreed”, he said.
Steven Mnuchin, whose statement on the dollar caused a tumble, joins many Treasury secretaries whose words have been given more meaning than intended. Tony Fratto, who was a Treasury Department official under President George W. Bush, said that Mr. Mnuchin had just come across the same tripwire that his predecessors had stumbled over, but that it was part of learning the job.
Currency markets are sending a different signal, producing the most depreciated dollar in 15 years. In contrast to Trump’s pledge to make “America first,” the U.S. was actually last in investment performance and job growth among major economies in 2017 for the first time in a decade.
TRADE, PROTECTIONISM, REGULATION, OVERSIGHT
Prime Minister Justin Trudeau is preparing for the possibility the U.S. may pull out of Nafta. For Canadian companies, the trade skirmish has already begun.
For much of the past year Donald Trump has aimed his trade ire at Mexico, which the US president portrays as a lawless southern neighbour. But as the US seeks to renegotiate the North American Free Trade Agreement, it is increasingly directing its complaints to the north.
Caterpillar Inc. isn’t concerned that the Trump administration’s policies will ignite a trade war. But it is worried they could push up the cost of steel used to build those iconic yellow bulldozers.
“I’ll give you a big story. I would do TPP if we made a much better deal than we had,” he told CNBC in an interview Thursday on the sidelines of the World Economic Forum in Davos.
TAXATION, WEALTH HAVENS, INEQUALITY
From acquisitions and equipment purchases to stock buybacks, firms are rapidly recalibrating their business plans in the wake of the corporate-tax overhaul. Specialty drugmaker Amicus Therapeutics, for one, has decided to build a new production facility in the U.S. instead of Europe.
Treasury Department tax experts are skeptical about states allowing taxpayers to make charitable contributions to circumvent a new cap on deductions for state and local taxes, a department official says.
The hedge fund’s co-founder lashed out on Twitter against Andrew Cuomo over a tax proposal. Cliff Asness, co-founder and chief investment officer of AQR Capital Management, issued a torrent of Tweets decrying the plan as “a 19 percent surcharge on investment businesses” and the governor as a “flat out lying demagogue without even the rhetoric talent of his father.”
President Trump ordered the firing last June of Robert S. Mueller III, the special counsel overseeing the Russia investigation, according to four people told of the matter, but ultimately backed down after the White House counsel threatened to resign rather than carry out the directive.
President Trump said on Wednesday that he was willing and eager to be interviewed by Robert S. Mueller III, the special counsel investigating Russia’s interference in the 2016 presidential campaign, insisting that he has done nothing wrong.
Justice Department Inspector General Michael Horowitz said he ‘succeeded in using forensic tools’ to find the messages that the FBI had failed to retain.
In the Summer of 2015, Dutch intelligence services were the first to alert their American counterparts about the cyberintrusion of the Democratic National Committee by Cozy Bear, a hacking group believed to be tied to the Russian government.
A lawyer for President Donald Trump said the White House had provided more than 20,000 pages of documents to special counsel Robert Mueller as part of the investigation into Russian interference in the 2016 U.S. election.
The Justice Department rebuked an effort by House Republicans to undermine the Russia investigation by pushing to release a memo said to accuse the F.B.I. of abusing its power.
A “spooked” Jared Kushner, President Donald Trump’s son-in-law and adviser, won’t agree to a staff interview with the Senate Judiciary Committee, Chairman Chuck Grassley said.
RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS
The prospect of American workers receiving bigger pay rises taps into a growing anxiety among fixed-income investors: that 2018 may be the year in which inflation finally accelerates, posing a fundamental challenge for holders of long-term bonds that pay ultra low fixed-rate coupons.
Congress is unlikely to raise the U.S. debt ceiling in a stopgap spending bill lawmakers need to pass by Feb. 8, and it may get pushed off until March as part of broader budget legislation, the second-ranking Senate Republican said Thursday.
A growing share of the trade-ins that U.S. auto dealers and lenders accept for car-purchase financing are worthless on paper, a sign that banks and finance companies are making riskier loans to keep up revenue as vehicle sales slow.
Quantitative investors have long used liquidity signals to strengthen their automated models. Simply put, bets on the least traded stocks should, in theory, outperform the market because there’s a reward for taking on the extra liquidity risk. But since December the opposite has been occurring, with the most liquid stocks rewarding investors to the greatest degree in nine years.
MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
Like the dotcom bubble, most of the money pouring into ICOs will be wasted. But with the possibility that a handful of real businesses will survive to become the next Facebooks and Amazons, it is hard to stand on the sidelines. This is a boom that should terrify venture capitalists. It has exposed shortcomings in both their funding models and their worldview. They were the ringmasters of the dotcoms. Now, they are jostling for allocations like everyone else.
A trade war with China would have myriad unintended consequences – higher consumer prices, off-shored jobs, an increased trade deficit with China, and Chinese retaliation prime among them. It would also threaten the economic growth and bull market that Trump inherited, but claims credit for. Will he consider these possibilities? Does he even understand them? Those who hoped that Trump’s trade ideology had evolved from its bellicose origins are likely to be disappointed.
Perhaps those betting that the VIX will remain low are aware of the feedback loop, and know that it could suddenly go into reverse: in other words, they are consciously taking a substantial risk in trying to squeeze the last few dollars out of what has been the best bet of the last five years. Or maybe they don’t perceive themselves to be taking a big risk, and the loop doesn’t explain why the fear gauge remains so low. Maybe investors in the US simply aren’t frightened. That would be worrying for different reasons. It reminds me of the widespread feeling, in the run-up to the global banking crisis, that markets were enjoying a durable ‘great moderation’, free of boom and bust, bubbles and crashes. The time for the rest of us to get scared is precisely when market participants aren’t.
If markets distrust American intent to control inflation — and Steven Mnuchin’s comments about the weak dollar, plus move to slap tariffs on washing machines, would foster that distrust — they will sell dollars, while buying US stocks as an inflation hedge. That is as close as I can come to making sense of the dollar sell-off.
Someone ought to tell these fellows the history of strong- and weak-dollar presidencies. The weak include Jimmy Carter, Richard Nixon and George W. Bush. The strong include Ronald Reagan and Bill Clinton. Perhaps Mr. Mnuchin aims to follow Michael Blumenthal, who held the Treasury job in the Carter Administration. His weak-dollar lobbying, along with an easy money policy at the Federal Reserve, led to a collapse of the dollar of more than 20% between January 1977 and October 1978 that fed higher inflation and elected Reagan.
Secretary Mnuchin spoke without a script, began with near-term commercial considerations, and was apparently contradicted by the commerce secretary. None of this can be reassuring to those looking to judge the competence and credibility of Donald Trump’s administration. This all may matter very little in the short run. But credibility is a crucial asset for any Treasury secretary given that financial panics or crises can come suddenly and the secretary’s words can come to be needed for reassurance.
Irrespective of any verbal niceties, the reason why Mr Mnuchin’s statement provoked so much high-altitude frisson was that it tapped into a broader undercurrent of anxiety that has been quietly swelling for several weeks. The unease has arisen partly because nobody quite knows why the currency is weakening. Some observers have tried to explain this by pointing to a recent increase in the trade deficit. But this excuse seems distinctly lame, given that the deficit is a long-running concern.
U.S. Treasury Secretary Steven Mnuchin might have made waves in Davos with his comment on a weaker dollar being helpful for American trade, but the remarks fall well short of those in the “currency wars” of the past. For the real deal, go back to the 1980s. The guardians of the world’s most advanced economies had an accord in 1985 to drive down the dollar, but they fell out in 1987 after a follow-on agreement to halt its slide.
As the world’s largest economy and architect of many international organizations and treaties, the United States remains an indispensable partner. But as the global economy gains strength, Europe and countries including Japan and China are forging ahead with deals that do not include the United States.
We are at a critical juncture. Awareness of the risks posed by Internet platforms is growing from a small base, but the convenience of the products and psychological addiction to them are such that it may take a generation to effect change from the user side, as it did with anti-smoking campaigns. Recognition of the corrosive effect of platform monopolies on competition and innovation is greater in Europe than in the US, but no one has found an effective regulatory strategy. Awareness that the platforms can be manipulated to undermine democracy is also growing, but Western governments have yet to devise a defense against it.
The truth is that it is impossible to pin down the full cause of the high price of the US stock market. The lack of any clear justification for its high CAPE ratio should remind all investors of the importance of diversification, and that the overall US stock market should not be given too much weight in a portfolio.
Mr. Kim’s mission is to revitalize the World Bank by increasing its firepower and winning over the United States. To do so, he is fundamentally, and controversially, changing how the bank operates. Instead of relying solely on contributions from reluctant donor governments, he is pushing private investors — sovereign wealth funds, private equity firms and insurance companies — to pony up trillions of dollars for projects in Indonesia, Zambia, India and elsewhere. His pitch: They can reap rich returns by putting their money to work alongside the World Bank.
We might direct assistance to the millions of Americans whose suffering is as bad as that of poor people in Africa or Asia. It is hard to imagine poverty that is worse than this, anywhere in the world. Indeed, it is precisely the cost and difficulty of housing that makes for so much misery for so many Americans, and it is precisely these costs that are missed in the World Bank’s global counts.
The ascendance of nonbiological intelligence means computing systems will learn and process many types of inputs far faster than even the most-expert individuals. Once experts partner with the systems, these man-machine teams will become extremely competent at rules-based goal seeking.
By the end of the year, the U.S. may well be the world’s biggest oil producer. With that, America takes a big step toward energy independence. The U.S. crowing from the top of a hill long occupied by Saudi Arabia or Russia would scramble geopolitics. A new world energy order could emerge. That shuffling will be good for America but not so much for the planet.
If the stock market keeps rising at its current pace, it won’t take long for Apple, Alphabet, or Microsoft to obtain a trillion market value, something that’s never before happened in the U.S. Depending on how you calculate it, it could also be the world’s first public trillion-dollar firm. Conversely, after the sharp gains in tech stocks, some investors are calling for a pullback or sharp decline, which could put up a roadblock to the trillion-dollar valuation.
Since the work is concealed, there’s no way to know for sure how many hedge funds are leveraging Washington to benefit their portfolios. But interviewing insiders and scouring public records, Bloomberg Businessweek identified six major influence campaigns waged on behalf of investors in a particular stock or bond since 2006. DCI, it turns out, coordinated all six.
Orban’s journey from young champion of democracy to creator of what he has called an “illiberal democracy” is one of the most remarkable recent transformations in European politics. It is a story, too, of how the historic transition to democracy in the continent’s east — which had seemed irreversible a decade ago after 10 former communist countries had joined the EU — is starting to unravel, posing a threat to the EU’s values, perhaps even its future.
Experienced startup investors to put $478.5 million into Outcome last spring at a valuation the company said was $5.5 billion. The investors placed the Outcome bet despite multiple warning signs, a Wall Street Journal examination shows, illustrating how even the savviest investors can gloss over potential issues in pursuit of a big score.
USA ECONOMY DATA, CITIES AND STATES
Prices for luxury homes, fueled by the surging stock market and a shrinking inventory of properties on the market, are rising faster than more-modest residences across much of the U.S. “The stock market hit all-time highs with gains in nearly every sector last quarter, instilling confidence among the wealthiest homebuyers,” Redfin Chief Economist Nela Richardson said in a statement.
US new home sales tumbled 9.3 per cent last month from November to an annualised pace of 625,000 units, the Census Bureau said. That was the steepest decline since August 2016 and steeper than economists’ expectations for a 7.9 per cent decline.
Wal-Mart Stores Inc. is cutting as many as 1,000 jobs at headquarters, the latest effort to streamline a retail empire under threat from Amazon.com Inc.
GLOBAL ECONOMY, INTERNATIONAL
There’s a simple way to make sense of the tumbling dollar, the Treasury selloff and the emerging-market boom, all springing in lockstep. Investors are intensifying their bets on synchronized global growth, a dynamic that’s crimping demand for safe assets and fueling convergence trades.
The outlook from Caterpillar, considered an economic bellwether, comes as industries from manufacturing to services report increased sales and orders that have fueled record equity prices and buoyed investor expectations for this year. This week, the International Monetary Fund raised its estimate for 2018 global growth to the fastest in seven years.
Caterpillar, the world’s largest maker of heavy machinery, said it broke a four-year streak of declining sales and signaled optimism about most of its construction and mining markets. 3M also reported upbeat results.
The head of China’s biggest online travel service is predicting the number of passport-holding citizens will double to 240 million by 2020, a trend that could fuel an explosion of mainland tourists exploring the world.
POSITIONING, INFLECTION, MARKET CALLS
The benchmark gauge is poised to end trading Thursday with a 16th straight day in overbought territory, as judged by the Relative Strength Index. That would be the longest such run in more than two decades.
As the Japanese stock-market euphoria continues into the new year and traders increase spending on derivatives, the nation’s exchange is about to give them another tool to bet on the shares: flexible options.
The heads of the world’s biggest asset manager and largest hedge fund are anti-cash. Larry Fink, chief executive officer of BlackRock Inc., is urging investors around the world to stop keeping money in cash as stock markets reach new highs.
Gold has climbed more than 8 percent since the middle of December as the dollar slumped and investors sought protection from a potential tumble in share markets and a resurgence of inflation. Holdings of bullion in exchange-traded funds have grown to the largest since 2013, while money managers have more than doubled their net bullish bets on Comex since the middle of last month.
COLOR, EARNINGS, SENTIMENT, VALUATIONS
Northrop, which makes the B-21 Raider long-range bomber, and other defence contractors that derive the bulk of their revenues domestically are considered among the biggest winners of the overhaul that has cut the corporate tax rate to 21 per cent, from 35 per cent. Moreover, amid rising military budgets in Russia and China, as well as geopolitical concerns, Northrop and its peers are benefiting from higher demand for weapons.
CREDIT, YIELD, BUYBACKS, CORPORATES
When President Donald Trump visited Puerto Rico last year, he triggered a selloff in the island’s bonds by saying its debt needed to be wiped out to help recover from Hurricane Maria. For the next five years, the bankrupt territory’s fiscal plans are — essentially — calling for just that.
DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
The 2017 year marks the first full year of generating income for the San Francisco-based company, which became profitable in the second half of 2016, as it managed to defy some of the disruptions in global travel last year. Airbnb’s earnings before tax, interest, depreciation and amortisation were $100m for the full year, according to a source close to the company, compared with an earnings loss the previous year.
Airbnb remains coy about its IPO plans, but it’s hard not to see these as anything other than steps toward a public listing. Some 2017 Airbnb financials, according to a source familiar with the company: $100 million in positive EBITDA and top-line revenue growth of 150% year-over-year.
Money managers in the Middle East are confident the sale of government-owned Saudi Arabian Oil Co. this year will shake up the global stock market with a record initial public offering that gives the world’s biggest company a valuation of about $1.5 trillion.
ENERGY COMPANIES, NOCs, INDUSTRY
Drug gangs pressure refinery workers to tap the lifeblood of Mexico’s oil industry. One former worker fled the country. One former gang member helps authorities understand the racket.
The once-giant crude nation whose output plunged in the past decade is enticing the world’s richest explorers with cut-rate prices for drilling rights to its most coveted offshore fields. The Jan. 31 auction for access to 29 deep-water tracts comes as $70-a-barrel crude lifts foreign drillers from the worst market slump in decades.
It’s proving hard to find a seller in the oil market. The options market bias, or skew, paints the least-bearish picture in two years for U.S. crude for delivery in three months — a key measure. That’s despite a surge of 9 percent in the commodity’s price in 2018 to a three-year high of more than $66 a barrel.
ENERGY NATURAL GAS, COAL
The threat of another blast of bitterly cold arctic air bearing down on the U.S. is sending natural-gas futures prices to their highest level in more than a year. Traders and investors who had bet on falling natural-gas prices are being squeezed and have had to scramble to buy back contracts they once sold to close out their positions, pushing prices this week to their highest level since late 2016.
U.S. natural gas soothsayers are at a stalemate. Bulls say more arctic air may vault futures above $4 for the first time since 2014. Bears see the February contract expiration and a warm spell dragging them lower.
POLLUTION, CLIMATE & ENVIRONMENT
Admired for its symmetry and classic cone shape, the volcano was named for a mythological fairy. But its smooth slopes and cute name belie its deadly nature: Inside is an enormous chamber, churning with molten rock and toxic gas. And it is ready to blow.
A new study of more than 100,000 reef-building corals in the Asia-Pacific region found that plastic on reefs promotes “colonization by pathogens implicated in outbreaks of disease in the ocean.” The study, published Thursday in the journal Science, said the likelihood of disease skyrockets from 4 percent to nearly 90 percent when coral comes in contact with plastic.
Following weeks of heavy rain in Paris, the River Seine continues to rise — now putting its famous Louvre Museum in danger. The water level is expected to reach 20 feet by Saturday, which is 13 feet higher than its normal height, according to the latest official weather bulletin.
BREXIT, SCOXIT, LONDON, UK ECONOMY
Philip Hammond, the chancellor, made a dramatic call on Thursday for a soft Brexit that involved “very modest” changes to the UK’s relationship with the EU. Brexit “will not be reversed” he said, but he wanted to keep a close trading relationship with the EU and aligned regulations that have helped Britain’s economy over the past 45 years of bloc membership.
JPMorgan boss Jamie Dimon has warned that his bank could still move “more than 4,000” jobs from the UK if Brexit negotiations go badly. Mr Dimon’s message — delivered in a BBC interview at Davos — follows recent reports that banks will move far fewer jobs than initially feared in the immediate aftermath of Brexit.
Prime minister Theresa May on Wednesday faced ominous signs of a Eurosceptic rebellion against her plans for a standstill Brexit transition deal, as senior Tory Jacob Rees-Mogg claimed that Britain would be left as a “vassal state”.
A commuter train derailed near Milan on Thursday morning, killing at least three people and injuring dozens of others, at least five of them seriously. The central carriages of the train, operated by the government-owned rail company Trenord, jumped the tracks near the town of Pioltello, about eight miles east of Milan.
DACA, TRAVEL BAN, IMMIGRATION, WALL
If Democrats want relief for young unauthorized immigrants, they would have to accept a border wall and restrictions on low-skilled immigrants joining their families in America.
Senate Democrats sought to narrow the parameters of an immigration deal with the White House Thursday, saying an agreement should focus on border security and the fate of Dreamers, undocumented immigrants brought to the U.S. as children.
GEOPOLITICS, CRIME, TERRORISM
Delivering an unusual public rebuke, former Gov. Bill Richardson of New Mexico resigned Wednesday from a Myanmar advisory board on the Rohingya crisis, calling it a pro-government “cheerleading squad” and chastising the country’s civilian leader, Daw Aung San Suu Kyi, whom he has long considered a friend.
The Iranian military has halted the routine harassment by its armed “fast boats” of U.S. naval vessels in the Persian Gulf, the U.S. military said, a turnabout that officials welcomed but were at a loss to explain.
The president’s comments Thursday at the Davos economic forum deepened the diplomatic rift that followed his decision to recognize Jerusalem as Israel’s capital.
In a phone call, President Trump urged President Recep Tayyip Erdogan to limit attacks against Kurdish militias, including some backed by American forces.
United States officials rejected a claim by Pakistan that the strike had targeted an Afghan refugee camp.
PRIVACY, HACKING, CYBERWAR, SURVEILLANCE STATE
Two years after Swift, the interbank messaging system, became embroiled in one of the largest cyber heists in history, it’s still cajoling more than 1,000 of its members to show they’re setting up necessary defenses.
Mr Xu says China’s scale gives its AI companies a big advantage over their rivals elsewhere. “Size means everything,” he says. “We have processed 500m identities for facial recognition. US companies can’t test on so many customers.”
Major global technology providers SAP, Symantec and McAfee have allowed Russian authorities to hunt for vulnerabilities in software deeply embedded across the U.S. government, a Reuters investigation has found.
PROPAGANDA, CORRUPTION, AUTHORITARIANISM
A pair of groups supporting President Trump say they raised $30 million last year, then spent tens of thousands of those dollars at the Trump International Hotel here and on payments to a few Trump loyalists like the former campaign manager Corey Lewandowski and the former Milwaukee County sheriff David A. Clarke Jr., according to new campaign finance reports and news reports.
The curator’s alternative: an 18-karat, fully functioning, solid gold toilet — an interactive work titled “America” that critics have described as pointed satire aimed at the excess of wealth in this country.
“I don’t have the DNA for it,” Oprah Winfrey told InStyle magazine, three weeks before her Golden Globes speech stirred up speculation. “That’s not for me.” But that doesn’t mean she wasn’t toying with the idea.
SILICON VALLEY, UNICORNS, STARTUPS, VC
Silicon Valley venture firm Benchmark Capital’s lawsuit against former Uber Technologies Inc CEO Travis Kalanick was dismissed on Thursday by a Delaware judge following an agreement between the parties.
Last year was a bonanza for U.S. startups. They collected more than $67 billion in venture-capital funding, a new record that beat the previous high in 2015 by more than 5 percent. Silicon Valley continues to dominate the VC landscape. But its grip is slipping.
CONSUMER TECH, SOCIAL MEDIA, E-COMMERCE, MOBILE
Germany is threatening curbs on how Facebook amasses data from millions of users in what would be an unprecedented intervention in the social network’s business model.
Twitter Inc. is working on a new Snapchat-style feature that makes it easier to post videos on the social-media company’s app, according to people familiar with the matter, aiming to attract more users and cement a nascent turnaround.
For many within the company, Noto’s decision came as no surprise. The former Goldman Sachs Group Inc. banker has always aimed to be a CEO, according to people familiar with the matter. At Twitter, that career path was complicated by co-founder Jack Dorsey’s return to the helm in 2015. More than two years later, with no plans for Dorsey to step down — even though he’s also CEO of Square Inc. — Noto’s best option was to take the position at SoFi, said the people, who asked not to be named discussing private matters.
The Chinese firm, which is reportedly on a roadshow ahead of an IPO that could value it as high as $100 billion, is said to have beaten Samsung’s sales efforts in India, the world’s second-largest smartphone market behind China, according to new data from Canalys and Counterpoint.
MEDIA, CABLE, SPORTS, ENTERTAINMENT
Vince McMahon, the flamboyant chairman and founder of World Wrestling Entertainment Inc., confirmed he plans to start a new professional football league, entering the market amid a slump in TV ratings for the NFL.
Beme, Neistat acknowledges, became a source of exasperation, with grand plans to create the next great digital news brand dogged by creative conflicts and sluggish progress. The Beme News YouTube channel, which will continue to exist within CNN, has published only a few dozen videos.
AUTOS, ELECTRIC, SELF-DRIVING
Tesla’s problems with battery production at the company’s Gigafactory in Sparks, Nevada, are worse than the company has acknowledged and could cause further delays and quality issues for the new Model 3, according to a number of current and former Tesla employees.
China may be poised to build its first car in Western Europe, with the help of Sweden’s Volvo Car Group. A ‘‘Made in Europe’’ stamp will augur well for the ambitions of a Chinese brand as it takes on global car majors such as Volkswagen AG, which has dominated the China car market for a decade.
Apple Inc. has expanded its California self-driving test fleet to 27 vehicles as it accelerates efforts to catch up with competitors such as Alphabet Inc’s Waymo.
Ford is acquiring two software firms to help build out its mobility business, a move that highlights the need for auto companies to seed management teams with tech talent.
Demand for low-carbon electricity to power a future wave of electric vehicles could be provided by small, factory-built nuclear reactors. The smaller reactors can produce up to 300 megawatts, or about a fifth of the capacity of one of the two units being built at Electricite de France SA’s Hinkley Point C, the U.K.’s first nuclear plant since 1995.
AIRLINES, SHIPPERS, RAIL, TRANSPORTS
The chief executive of Southwest Airlines, the second-largest carrier in the US by market value, told investors worried about an industry price war to “calm down”, as a sell-off in the sector continued into its second day.
SCIENCE, NATURE, PSYCHOLOGY
The find, reported Thursday in the journal Science, is by far the oldest human fossil ever uncovered outside Africa, where our Homo sapiens originated. It pushes back the timeline of when modern humans began venturing to other continents by about 60,000 years and suggests people made several short-lived excursions into Eurasia millennia before we finally conquered the globe.
The model showed that impalas and zebras have the best chance of making a getaway if they run at moderate speeds, because that leaves more options for maneuvering away at the last second. “If you’re running flat out, there’s not much you can do to stop a lion from anticipating exactly where you’re going to be in two strides’ time,” Dr. Wilson said.
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