Weekend Papers Summary
FINANCIAL TIMES
-The US is investing $6B to support Ukraine by rushing more Patriot missiles and boosting domestic weapons manufacturing. The $6B package will procure military aid from US defense companies, which will take longer to reach Ukraine but should strengthen its defenses over a longer timeframe. The package includes munitions for air defense systems, radars, and drones. The announcement comes two days after President Biden signed into law a $95B foreign aid package that included $61B for Ukraine. The Pentagon also authorized $1B worth of military equipment and weapons to be drawn from stockpiles and rushed to Ukraine. The $6B parcel highlights the US commitment to meet Ukraine's immediate and long-term capability needs to fight Russian aggression.
-US inflation rose to 2.7% in the year to March, indicating persistent high price pressures and complicating the Federal Reserve's plan to cut interest rates this year. The unexpected rise in personal consumption expenditures, the Fed's preferred gauge for measuring inflation, surpassed expectations of a slight increase from 2.5% in February. This could increase traders' doubts about the Fed's intention to lower interest rates this summer, as US mortgage and borrowing costs are expected to remain high in the run-up to November's presidential election. The figures come after data showed the US economy grew slower than expected in the first quarter.
-AngloAmerican, a major FTSE 100 company, has been rebuffed by a potential buyer due to its "highly unattractive" corporate structure and conservative culture. The company suffered its worst share price fall since 2008 in December after revising its copper production forecast by 20%. This move highlights Anglo's weakness and the potential for predators to take notice of the company's byzantine corporate structure and conservative culture.
-President Biden has gained ground in the US presidential race, with Trump's lead dwindling to just 0.3 percentage points. Trump's court appearances have allowed Biden to portray him as flawed and unfit for office, which was crucial in his 2020 campaign. However, Trump's legal troubles have made it harder for him to raise money and campaign, and his standing with independent and swing voters is being damaged. The court appearances are putting Trump and his liabilities in a more prominent position, according to non-partisan political analyst Amy Walter. The trial is damaging Trump's standing with the sliver of independent and swing voters.
-The People's Bank of China led record gold purchases by central banks in 2022 and 2023, buying over 1,000 tonnes each year. Emerging markets sought to diversify their reserve holdings away from the US dollar, which was weaponized by Washington in sanctions against Russia after its invasion of Ukraine. Chinese retail investors, Chinese hedge funds, and speculators have also piled in. The rally has Chinese characteristics, with gold-backed ETFs experiencing monthly outflows and bar and coin demand being abysmal in Germany. Degussa Goldhandel, Europe's largest gold dealer, says the cost of living crisis and inflation are driving customers to sell.
-US President Joe Biden has expressed his willingness to debate Donald Trump, despite dubbed him a threat to the country's democracy. Biden said he was "happy" to debate Trump, despite doubts about their appetite for another round in 2024. Trump has refused to debate any of his rivals for the Republican presidential nomination in 2023 and early this year, and has often been critical of the networks and moderators of presidential debates. Biden had not said whether he would be willing to participate until Friday, casting doubt on his desire for a direct televised confrontation. Trump has increasingly put pressure on Biden to debate him, and he has even offered to do it immediately.
-Spanish Prime Minister Pedro Sánchez has decided to take five days to decide whether to continue as prime minister. As his future is announced, the question remains whether he has succumbed to emotional strain. Sánchez's reaction came after a judge's preliminary investigation into his wife's allegations of influence peddling. Political scientist Máriam Martínez-Bascuñán described the situation as "stupafied." Two extreme theories have emerged, describing the decision as either childish narcissism or Machiavellianism.
-French luxury groups Hermès, LVMH, and Kering have experienced varying sales growth in the first quarter of 2021, indicating the sector's resilience despite years of rapid expansion and margin gains during the pandemic. Hermès, the maker of the Birkin bag, saw a 17% revenue growth despite a high basis of quarterly comparison from a year ago. LVMH saw a 3% increase as demand for its fashion and handbags softened and champagne sales fell. Kering, the group's biggest brand, Gucci, experienced customer disaffection, leading to a warning of a potential 45 per cent profit drop in the first half of the year. Gucci sales contracted 18 per cent due to China's impact.
-Climate change is causing hotter summers and wetter weather, with temperatures exceeding 50C even in the UAE. Recent floods in the Emirates have been the heaviest since records began 75 years ago, and inundation has become frequent enough for Dubai's transport authority to open a flood management control center. The country hosted the COP28 climate summit last year, raising awareness about climate change dangers. Dubai was the first to apply for a UN scheme to become a "City Resilience Hub" in 2020. Abu Dhabi weathered the storm better than Dubai, which was forced to cancel over 1,000 flights. Dubai officials have considered comprehensive drainage systems but have carried out limited works due to high costs. Town planning experts suggest Dubai adopt "sponge city" principles for better drainage.
THE NEW YORK TIMES
-Chinese spies appear to have been everywhere these days. Six people in three separate cases in Europe have been charged with spying for China, with two in Britain and four in Germany. The men, both from different countries and with hawkish views on China, have become embroiled in accusations of espionage on behalf of China, highlighting a growing pushback against Chinese influence in politics and commerce in Europe.
-Columbia University's senate has approved a resolution calling for an investigation into the school's leadership, accusing it of violating academic freedom, jeopardizing free inquiry, and breaching due process rights. The resolution, which was 62-14, fell short of a proposal to censure Dr. Nemat Shafik, who was accused of capitulating to congressional Republicans over free speech and disciplining students and professors. The resolution was prompted by the arrest of over 100 student protesters and her testimony on antisemitism claims.
-Lawyers for Donald J. Trump have questioned the former publisher of The National Enquirer, David Pecker, about his explanation for suppressing salacious stories about the Republican presidential candidate before the 2016 election. Pecker, who has known Trump for decades, was cross-examined by former defense lawyer Emil Bove about two deals he had reached in 2015 and 2016 with people seeking to sell stories about Trump. Bove argued that such arrangements were standard for the publisher and that Pecker had previously misled jurors about the details of the transactions. Pecker also faced a tense moment when Bove questioned a discrepancy between his testimony and notes from a 2018 interview with the FBI.
-The Supreme Court has heard arguments on former President Donald Trump's claim of immunity from prosecution, which was seen as a cynical attempt to delay his trial. The practical question was whether the court would act quickly enough to allow the trial to proceed before the 2024 election. However, the conservative majority of the court treated Trump's assertion as a weighty and difficult question, avoiding their eyes from his conduct. This led to a lack of focus on the facts of the case.
-The Republican Party has written to the Secret Service urging them to keep protesters away from the venue for the Republican National Convention in Milwaukee in July. The letter, signed by Todd R. Steggerda, counsel to the Republican National Committee, argues that the placement of an area for protests could heighten tensions among attendees and demonstrators of differing ideologies, increasing the risk of verbal or physical clashes.
-Israel has made efforts to expedite the flow of aid into Gaza, but humanitarian groups say more is needed as severe hunger has gripped the enclave, particularly in the devastated north. Israel's efforts have been acknowledged by the Biden administration and international aid officials. More aid trucks appear to be reaching Gaza, particularly the north. The new moves have come as Israel faces growing international pressure to address the worsening humanitarian crisis in Gaza. Aid groups have long complained that only a trickle of aid is entering the enclave, blaming harsh war conditions, strict inspections, and limits on the number of crossing points. Israel has said the restrictions are necessary to ensure that supplies do not fall into the hands of Hamas.
-Israeli Prime Minister Benjamin Netanyahu has met with US Secretary of State John Kerry to discuss the treatment of civilians in the ongoing conflict in Gaza. The talks will focus on the remaining hostages in Gaza and the impending Israeli military operation in Rafah. Blinken last visited Israel in March, warning of the potential risks to the population. The Biden administration has raised concerns about the planned incursion, urging for a credible plan to protect civilians.
-President Putin of Russia is set to institute a rare tax increase on corporations and high earners to finance the war in Ukraine. This move reflects Putin's firm control over Russian policy and the burgeoning costs of his war in Ukraine. Russia is allocating nearly a third of its overall 2024 budget to national defense spending this year, a huge increase, adding to a deficit that the Kremlin has taken steps to keep in check. The proposed tax increase underscores Putin's rising confidence about his political control over the Russian elite and his country's economic resilience at home, showing that he is willing to risk alienating parts of society to fund the war. It would represent the first major tax overhaul in over a decade.
-The United Automobile Workers (UAW) reached a deal with Daimler Truck in North Carolina, allowing workers a 25% raise and preventing a planned strike. The union had expressed its readiness to walk out if it couldn't agree on a new contract for 7,300 Daimler employees. The deal includes profit sharing, automatic cost-of-living increases, and equalizing pay among workers at North Carolina factories. This marks a victory for the UAW as it aims to expand its power in Southern states where unions have been weak.
-The Biden administration has announced new protections for gay and transgender medical patients, prohibiting federally funded health providers and insurers from discriminating based on sexual orientation and gender identity. This rule reverses a policy introduced by the Trump administration and aims to restore civil rights protections for L.G.B.T.Q. people. The rule is a significant step towards a more equitable and inclusive healthcare system, providing Americans with a clear way to act on their rights against discrimination when visiting a doctor, talking with their health plan, or engaging with health programs run by H.H.S. The health and human services secretary, Xavier Becerra, stated.
THE NEW YORK POST
-Archaeologists have been puzzled by the curse of King Tutankhamun's tomb in Egypt, which has been linked to the deaths of multiple excavators who discovered it in 1922. However, a scientist claims to have solved the mystery over 100 years later. The tomb is believed to contain toxic levels of radiation from uranium and poisonous waste, which have lingered inside since it was sealed over 3,000 years ago. The high radiation levels inside the tomb could lead to fatal radiation sickness and cancer, as both contemporary and ancient Egyptian populations are characterized by high incidences of hematopoietic cancers, which are primarily caused by radiation exposure.
-Southwest Airlines CEO Bob Jordan has announced plans to alter its boarding and seating processes to improve its financial position. The airline, known for its single economy class cabin with open seating assignments, will assign passengers a boarding group but allow them to choose any available seat upon arrival. Customers can pay extra to board early to secure their preferred seat. Southwest is facing financial fallout from Boeing delays and has announced it is withdrawing from multiple underperforming airports. The company reported a net loss of $231 million in Q3.
-Paramount Global is considering appointing interim CEO Bob Bakish to replace him with a group of executives as the company moves closer to a deal with Skydance Media. Bakish, who has been critical of the company's talks, would be replaced with an "Office of the CEO" consisting of division heads. No decision has been made about Bakish's future, but the speculation comes at a critical time for the conglomerate, controlled by media heiress Shari Redstone through her family business National Amusements.