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Good afternoon and welcome to Notes on the News. It's Sunday, May 9. Here's what we're watching this week: efforts to bring a fuel pipeline back online after it was hit by a cyberattack, bipartisan talks on President Biden's spending plans, and the latest signs of a pickup in inflation pressures. Let us know what you think by replying to this email. |
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| PHOTO: LUKE SHARRETT/BLOOMBERG NEWS |
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1. Key U.S. energy pipeline works to reopen after cyberattack. Colonial Pipeline, the operator of the main pipeline carrying gasoline and diesel fuel to the East Coast, is investigating the ransomware attack on its system. If the crucial fuel artery remains offline for more than a few days, shortages could affect consumers. |
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2. Bipartisan talks could set course of Biden spending plans. The president faces a crucial test of whether he can find common ground with Republicans as he pushes trillions in spending on infrastructure, child care and education. He is set to host top congressional leaders at the White House on Wednesday, followed by a meeting on Thursday with GOP senators backing a narrower infrastructure proposal. |
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3. Liz Cheney under GOP fire again. The House Republican conference chairwoman is expected to be in focus at a closed-door meeting of GOP lawmakers on Wednesday, with members discussing a possible second vote to oust her from the party's top ranks over her criticism of former President Donald Trump. |
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4. Rising consumer prices put inflation in focus. Prices are climbing as high demand runs up against constraints on the availability of goods and services across the U.S. economy, and some consumers are feeling stretched. Prices for April, due Wednesday, are expected to show their largest annual increase in nearly a decade. |
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5. Lawyer who fought Chevron in 28-year-old case faces criminal trial. In 2011, Steven Donziger won a $9.5 billion oil-pollution judgment against the company in Ecuador, a verdict later ruled fraudulent by a U.S. federal judge. Now, as Chevron pushes to ensure Donziger doesn't profit from the case, his refusal to share records with the company has sparked a contempt-of-court trial that starts Monday. |
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6. German priests defy pope with public blessings of gay couples. Catholic clergy are coordinating a series of ceremonies in about 100 churches and other venues in Germany, with most of them on Monday. The events, many of them live-streamed, are the latest sign of how far liberal German Catholics are pushing the boundaries of the Vatican’s authority. |
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7. Sotheby’s, Christie’s aim for comeback at spring art sales. New York's top auction houses will attempt to sell at least $1 billion in art during a series of in-person and live-streamed events starting Tuesday. The auctions will test the market after a pandemic-disrupted year. 📰Enjoying this newsletter? Get more from WSJ and support our work with a special subscription offer. |
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🤖 Join us online Tuesday through Thursday at The Future of Everything Festival for our most ambitious program yet: an interactive stage featuring everyone from Delta CEO Ed Bastian to artist Ai Weiwei, AI-fueled networking, immersive workshops with renowned chefs and artists, and virtual reality experiences. Register here for your 3-Day Pass (complimentary for WSJ members). |
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$2 billion — The total value of NFT sales on the ethereum network, the main blockchain underlying such transactions, in the first quarter of this year, up from $94 million in the previous three-month period, according to data-tracking site NonFungible.com. 9% — The percentage of kindergarteners who attended school districts that were fully remote as of April 5, with the majority of kids attending hybrid school, according to the Return To Learn Tracker. Many parents didn’t enroll their children in kindergarten this year, with enrollment off by roughly 15% in many states. Educators are particularly worried about the impact of delayed or remote schooling on this age group. $0.74 — The price dogecoin reached early Saturday as the cryptocurrency surged in advance of Elon Musk's “Saturday Night Live” hosting debut. The Tesla CEO, whose tweets about dogecoin have prompted its popularity to skyrocket, joked about the digital currency during a sketch in which his character said, “It’s a hustle.” When the show ended, dogecoin was trading around 52 cents. |
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| What Everyone Wants to Know |
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What happens to stocks and cryptocurrencies when the Fed stops raining money? The Federal Reserve has kept interest rates near zero for the past year and signaled rates won’t change for at least two more years. It is buying hundreds of billions of dollars of bonds. As a result, the 10-year Treasury bond yield is well below inflation—that is, real yields are deeply negative—for only the second time in 40 years. There are good reasons why rates are so low. The Fed acted in response to a pandemic that at its most intense threatened even more damage than the 2007-09 financial crisis. Yet in great part thanks to the Fed and Congress, which has passed some $5 trillion in fiscal stimulus, this recovery looks much healthier than the last. That could undermine the reasons for such low rates, threatening the underpinnings of market valuations. If junk bonds, cryptocoins or tech stocks are bought primarily with borrowed money, a plunge in their values could precipitate a wave of forced selling, bankruptcies and potentially a crisis. But that doesn’t seem to have happened. Fear of inflation is also widespread now with shortages of semiconductors, lumber and workers all putting upward pressure on prices and costs. Most forecasters, and the Fed, think those pressures will ease once the economy has reopened and normal spending patterns resume. |
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Vaccines in the U.S. beckon foreigners seeking shots and shops. Even before New York City announced plans to offer visitors free vaccines, tourism from Texas to Florida has received a boost as tens of thousands from Mexico and other countries fly to the U.S. for a shot in the arm. Texas, like many U.S. states, doesn’t require residency for Covid-19 vaccines. Unlike in Mexico, where there are too few vaccines to go around, some U.S. states are offering incentives. New Jersey last week announced a “shot and a beer,” offering a free drink at a participating brewery to adults who have received their first shots. Mexico’s travel agencies, battered by the pandemic, have been quick to spot an opportunity. They sold U.S. tourist packages in March and April to 170,000 people, most of them seeking the vaccine, said Eduardo Paniagua, the head of an industry association. Lobbyists and unions seek to shape the marijuana industry. Cannabis companies, banks and new marijuana trade organizations are deploying platoons of lobbyists to state capitals and Washington, D.C., to help shape the ground rules for the industry as more states legalize use, and as Congress weighs measures that could further legitimize the market. The industry’s increasing legitimacy at the state level has attracted a diverse set of corporate players, union advocates, personal-use supporters and social-justice activists, reflecting the industry’s widening base even if its participants are sometimes at odds with one another. In some instances, cannabis companies, as well as corporate players from the tobacco and alcohol industries angling for a foothold in a new market, are butting heads with consumer-focused groups like the National Organization for the Reform of Marijuana Laws. One early area of dispute: homegrown cannabis. Companies that had won contracts under state medical-marijuana programs initially objected to states like New Hampshire and New York allowing consumers to grow a few plants for personal use. In more recent years, after pushback from consumer groups, they have largely stopped lobbying against those provisions. |
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| Sara Bareilles, Busy Philipps, Ashley Park, Erika Henningsen and Renee Elise Goldsberry PHOTO: HEIDI GUTMAN/PEACOCK |
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Go watch: “Girls5eva,” a Peacock comedy produced by Tina Fey, about the now-middle-aged members of a ’90s girl group that reunites. |
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