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Good afternoon. Here’s what you should know today, Jan. 17: |
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U.S. stocks dropped as bank profits suffered from a deal slump The TSA found a record number of firearms in carry-on bags in 2022 The latest social-media food trend is kind of fishy |
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| Politicians and top executives gather in Davos, Switzerland, for the annual World Economic Forum. PHOTO: STEFAN WERMUTH/BLOOMBERG NEWS |
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1. Rising inflation and a possible recession cast a pall over the World Economic Forum’s meeting in Davos, Switzerland. |
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Political and business leaders at the annual gathering—the first regular winter meeting after a two-year Covid-19 hiatus—mulled inflation’s potential peak, the chance that another interest rate hike causes a longer economic downturn, hope that a possible U.S. and U.K. recession is short and concern about the war in Ukraine and other geopolitical issues. U.S. climate envoy John Kerry, European Commission President Ursula von der Leyen and Microsoft CEO Satya Nadella were among the speakers so far. The meeting, which began yesterday, runs through Thursday. |
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Follow live updates and analysis (Read) Many Companies Are Shying Away From Carbon Credits (Read) |
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2. The Justice Department unveiled policies offering additional incentives for companies to self-report misconduct. |
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If businesses fully cooperate with investigators and fix the underlying problems, including compliance-program shortcomings, they will avoid prosecution and get big discounts on potential fines. Qualifying companies would still be responsible for repaying any illegally earned profits and refunding money to victims. The DOJ declined to say how many self-reports of corporate wrongdoing it receives annually. |
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DOJ Considered but Rejected a Role in Biden Documents Search (Read) Google Didn’t Show Bias in Filtering Campaign-Ad Pitches, FEC Says (Read) Supreme Court Hears Bid by Turkey’s Halkbank to Avoid Charges (Read) |
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3. International stocks are outperforming U.S. ones. |
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An index that tracks developed and emerging-market stocks, the MSCI All Country World ex USA, rose 7.1% in 2023 as of Friday on a U.S.-dollar basis, beating the S&P 500’s 4.2% gain. Easing concerns about international economies means a brighter outlook for overseas stocks. Today, U.S. stock indexes dropped, following sharply lower earnings from Goldman Sachs and Morgan Stanley and data on China’s economy (more on that below). Meanwhile, some money managers advise clients to buy bonds while the yields are high, shifting away from the classic conservative 60-40 portfolio—60% stocks and 40% bonds—that last year delivered its worst returns in decades. |
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Disney Defends Board and CEO Robert Iger Against Activist Investor Nelson Peltz’s Criticisms (Read) A Crypto Magnate Saw the Risks and Still Was Hammered (Read) Big Banks Might Face Breakup, Top Regulator Says (Read) Rising Interest Rates Hit Landlords Who Can’t Afford Hedging Costs (Read) |
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4. China’s economic growth fell to near-historic lows last year amid zero-tolerance Covid-19 policies. |
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The economy expanded 3% in 2022, the National Bureau of Statistics said, a sharp slowdown from 8.1% in 2021. Aside from 2020, when the economy grew only 2.2%, last year marked the country’s worst year for GDP growth since 1976, when Mao Zedong’s death ended the Cultural Revolution, according to World Bank data. Beijing scrapped most of its zero-Covid restrictions in December, which economists expect will lead to an economic rebound in 2023. Beyond that, China faces a starker problem: Its shrinking population means a smaller workforce and fewer consumers. It dropped in 2022 for the first time since 1961—down 850,000 to 1.412 billion. |
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🎥 Big-Spending Chinese Tourists Are Coming Back, but Slowly (Watch) |
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