FT : Jeremy Hunt warns of ‘long path’ ahead to cut UK tax burden

Jeremy Hunt warns of ‘long path’ ahead to cut UK tax burden
Chancellor eyes reduction in national insurance or income tax in Wednesday’s Budget as he struggles with tight fiscal situation

Chancellor Jeremy Hunt has warned ahead of Wednesday’s Budget that there is “a long path” ahead to cut Britain’s tax burden, as he admitted that recent official fiscal forecasts had made his task harder.

Hunt, who has tried to scrape together enough money to fund significant personal tax cuts on March 6, said on Sunday: “We’ve always said we would only cut taxes in a way that’s responsible and prudent.”

The chancellor has been talking down expectations of big tax cuts in recent weeks, but Tory MPs still hope that he will surprise on the upside, possibly matching the 2p cut in national insurance rates he announced in his Autumn Statement.

Hunt’s allies have indicated the chancellor would like to cut national insurance or income tax rates by 2p in the Budget, but have warned that the tight fiscal situation rendered that extremely difficult.

Each 1p cut in employee national insurance rates costs £5bn, while a 1p cut in the 20p basic income tax rate costs £7bn. An NI cut is seen as a more pro-growth measure as it would only benefit workers.

“We’ve always said we would only cut taxes in a way that’s responsible and prudent,” Hunt told the BBC’s Laura Kuenssberg. “The most un-Conservative thing I could do would be to cut taxes by increasing borrowing.”

Hunt said he would do “the right thing in the long-term interests of the country”, including investing hundreds of millions of pounds to boost productivity in areas such as the NHS and the police.

To raise funds for headline-grabbing tax cuts, Hunt has looked at stealing Labour’s policy of scaling back or axing the “non dom” tax regime, raising between £2bn and £3bn a year. He declined to rule out such a move on Sunday.

Extending the windfall tax on oil and gas companies, another Labour policy, would raise more than £10bn over five years, according to the opposition party.

Hunt has also been looking at scaling back public spending assumptions in the next parliament, even though that would leave him exposed to claims by economists and Labour that he is pencilling in more austerity.

The Financial Times reported last month that Treasury officials were considering reducing projected departmental spending rises after 2025 from 1 per cent to 0.75 per cent a year, releasing £5bn to £6bn for tax cuts.

Other smaller tax-raising measures are expected. The chancellor is likely to raise £300mn from abolishing the furnished holiday lets regime, a move first reported by The Sunday Times.

The move is supported by many Tory MPs, who believe it will slow down the trend of residential landlords switching to holiday lets.

Hunt confirmed that recent forecasts from the Office for Budget Responsibility had “moved against us”, reducing the amount of headroom he has against his self-imposed borrowing rules.

The chancellor told The Sunday Telegraph: “We don’t have as much of a positive outlook as we had at the end of the Autumn Statement.”

At the time of that fiscal event last November, the OBR said Hunt had retained a £13bn cushion against his fiscal rule, which says debt must be falling as a share of GDP year-on-year in five years’ time.

The chancellor’s aides have indicated Hunt could cut that cushion to £6bn next Wednesday, the lowest fiscal buffer since the OBR was created in 2010.

Asked about the prospects for reducing the overall tax burden, currently the highest for 70 years, he said: “I’m going to be honest with people on Wednesday that it’s going to be a long path to bring it down.”

Hunt’s Budget message to voters will be that the Conservative government’s plan is working and that inflation is falling and growth is starting to return after the economy dipped into recession at the end of 2023.

He suggested voters should show patience over tax cuts and give the Tories more time to deliver them. “Margaret Thatcher, who was the prime minister who inspired me to go into politics, brought taxes down over a decade,” he said.

FT : When will the ECB start cutting interest rates?

When will the ECB start cutting interest rates?
Market Questions is the FT’s guide to the week ahead

The more hawkish policymakers at the European Central Bank are expected to toughen their resistance to calls for imminent interest rate cuts at its meeting next week after eurozone inflation proved stickier than expected last month.

The ECB is set to leave rates on hold and continue to say that it needs more evidence that wage growth is slowing before it is ready to discuss a potential easing of monetary policy.

Several analysts pushed back their forecasts of when the ECB is likely to start cutting rates from April to June after data released on Friday showed eurozone inflation slowed less than expected in February. 

Growth in consumer prices slowed from 2.8 per cent in January to 2.6 per cent in February. But there were signs that rapid wage growth is keeping services sector inflation stickier than expected after it slowed only slightly to 3.9 per cent.

Krishna Guha, vice-chair of US investment bank Evercore-ISI, said “stubborn” services inflation in Europe meant the “majority of the ECB governing council will probably interpret this as a sign that domestically generated inflation is not on a sustained downward trend”.

Eurozone wages rose more than 5 per cent last year and further strong rises are expected this year, as workers look for their pay to catch up with the recent surge in the cost of living.

Holger Schmieding, chief economist at German investment bank Berenberg, said this was likely to encourage the ECB to take a “cautious approach — as it would not want to undo its progress in the fight against inflation on the home stretch towards the target”, making it unlikely rates would be cut before June. Martin Arnold

Did US hiring slow in February? 
The US is expected to have added fewer jobs in February after a much higher than expected figure in January, but that is unlikely to be enough to persuade the Federal Reserve to cut interest rates early.

The labour department is forecast to report on Friday that the US added 190,000 jobs last month, down from the 353,000 added in January, according to economists polled by Reuters. The unemployment rate is expected to remain at 3.7 per cent.

The expected slowdown is being seen as an indication of just how high January’s figures were. The number of jobs added was nearly double economists’ expectations, and was viewed by market participants as being exaggerated by seasonal factors, even after the seasonal adjustments the labour department makes to the data. 

Analysts at Citi wrote that they were expecting a lower figure than the consensus for February, although they do not see extensive weakness in the labour market.

“Initial jobless claims have stayed at low levels, pointing to no widespread lay-offs occurring, while higher continuing claims suggest the duration of unemployment remains longer,” they wrote. “We are expecting 145,000 for payrolls in February but would not be surprised with a lower figure as seasonally adjusted strength in January will not repeat.”

However, unless the unemployment rate rises significantly, it is unlikely that the figures will persuade the Fed to cut interest rates earlier or faster than their current forecasts. In their last so-called “dot plot”, officials indicated they expect to cut rates three times this year, probably starting in the second half. Kate Duguid

Will China’s services sector drag down markets?
China will set its annual growth target next week but further measures to stimulate its spluttering economy may hinge on the confidence felt by the country’s smaller companies.

Top Communist party cadres will gather in Beijing on Monday and Tuesday for the annual Two Sessions meeting, which sets the country’s annual growth target.

Analysts at Oxford Economics expect policymakers to aim for lower growth than last year’s target of “about 5 per cent”, arguing that a target range of between 4.5 to 5 per cent “could provide policymakers the space to calibrate [their] stimulus this year, while supporting high quality development”.

Investors have been hoping for supplementary policies from Beijing to boost the economy and markets. That decision may be swayed by the publication on Tuesday of the Caixin’s purchasing managers’ index, which covers the country’s services sector.

The PMI index, a privately operated poll of business confidence, is expected to come in at 52.4 for February, according to a median forecast from economists polled by Bloomberg. That would be well above the 50-point threshold that delineates growth from contraction.

The Caixin gauge is important because it is focused on smaller and medium-sized private companies — in contrast to the official PMI, which favours state-owned firms — and thus gives investors a key reading on the outlook for a sector responsible for roughly half of China’s annual economic activity.

Robust services growth is important due to the steady stream of lacklustre manufacturing PMI readings that have weighed on markets since China fully reopened from the pandemic in January 2023. Growth in businesses centred around domestic tourism, restaurants, and catering services has helped offset that weakness. William Sandlund

FT : Is time up for the luxury watch boom?

Is time up for the luxury watch boom?
After hitting pandemic-era records, second-hand watch prices are sinking fast

Luxury executives gathered in Miami in January for LVMH’s annual watch fair, to inspect timepieces from Hublot’s bright green Big Bang model to TAG Heuer’s new creation encrusted with lab-grown diamonds.

But the glamorous setting masked a more uncertain outlook for a typically resilient sector, which is having to contend with a broader slowdown in luxury spending and the deflation of a pandemic-era boom that sent resale prices soaring.

Watches of Switzerland, the UK’s biggest seller of Rolex, Breitling and Cartier watches, issued a major profit warning in January after admitting it had underestimated the impact of a luxury slump, crashing its shares. Days later Swatch Group, the Swiss company that makes luxury brand Omega as well as its eponymous plastic watches, missed annual underlying profit forecasts and told analysts customers were prioritising lower-cost items in mainland China.

Arjen van de Vall, chief executive of UK-based Watchfinder, which buys and sells pre-owned luxury watches and is owned by Richemont, said a boom in demand for high-end watches during the pandemic was a “once-in-a-generation event” that had come to an end. It was “almost a hype that I would compare with cryptocurrencies, and to some extent whisky and luxury cars”, he said. 

The luxury watch market is made up of retailers such as Watches of Switzerland and Bucherer, which was bought by Rolex last year, as well as design houses such as Richemont and LVMH, which make and sell their own brands. The so-called holy trinity of Swiss watchmakers is made up of family-owned Audemars Piguet, Patek Philippe and Richemont-owned Vacheron Constantin, who sell via third parties as well as their own boutiques.

Armed with pandemic savings in a low interest rate environment, wealthy shoppers stuck at home snapped up new luxury watches quicker than the Swiss manufacturers could make them, driving up demand for second-hand timepieces and pushing prices to new highs, benefiting retailers and watchmakers alike.

In the 10 years from 2013 to 2022, watches outperformed other collectible assets such as jewellery, handbags, wine, art and furniture, growing in value at an average annual rate of 7 per cent — and by 27 per cent from 2020 to 2022, according to indices compiled by BCG.  

Timepieces such as Patek Philippe’s discontinued Nautilus 5711/1A in steel, costing less than $40,000 new before the crisis, were selling for more than $150,000 in the resale market during the pandemic according to John Reardon, former international head of watches at auction house Christie’s and founder of Collectability.

But resale market prices for luxury watches have now fallen for seven straight quarters, having peaked in May 2022, according to Morgan Stanley and WatchCharts data. The second-hand value of Rolex, Patek Philippe and Audemars Piguet watches rose nearly 50 per cent on average between the first quarter of 2020 and the same period in 2022, according to Matthew Clarke, senior merchandising manager of watches at luxury resale retailer The Real Real. But by the fourth quarter of last year those values had slumped more than 20 per cent.

Luca Solca, a retail analyst at BernsteinAlliance, said: “The industry was taken by surprise and there was no inventory to satisfy demand . . . [but] the situation on that front is normalising.”


Sinking resale values are evidence of a slowing demand for watches, both new and second-hand, that is dividing fortunes. According to Nicolas Llinas, partner at BCG: “There is definitely a polarisation of players [in the marketplace]” he said, with aspirational customers pulling back on spending.

According to Citi analysts, the sector is now entering a “battle of the wrist”. The luxury watches category “continues to face volatile demand patterns, structural headwinds, and greater polarisation between brands”, the analysts said after a recent quarterly update from Cartier owner Richemont, where jewellery sales were up 12 per cent, outpacing watches’ increase of 3 per cent. 

Brian Duffy, chief executive of Watches of Switzerland, told analysts last month: “Inevitably, when markets are down, the higher end is stronger and takes a bigger percentage overall; the higher-end consumer is more unaffected by the cost of living . . . Stronger brands [are] taking a bigger share of the mix”.

Even Rolex, which dominates the market, appears to be impacted, however, as shoppers consider purchases more carefully. Although it does not publish any data on its prices, and declined to comment for this article, according to Morgan Stanley average price increases for a handful of Rolex models in the US (a key market) stalled this year for the first time since 2015.

Meanwhile, the price gap between Rolex’s second-hand and new models has narrowed significantly compared with the peak of March 2022, down to a 20 per cent resale premium on average today versus an estimated 90 per cent, according to Morgan Stanley.


The company is also seemingly taking a more conservative approach to the watches it makes. Watches of Switzerland, which derives more than half its revenue from Rolex, said in January it had received a greater number of steel watches rather than the more expensive steel and gold variety, hitting its average selling prices. 

Those dynamics come amid a wider slowdown in luxury demand that has spread from the US towards mainland China and Hong Kong — typically the biggest market for Swiss watch exports. 

Samuel Lee, honorary adviser of the Hong Kong-based industry body Federation of Hong Kong Watch Trades & Industries, said: “Both Hong Kong and mainland China’s economy are not doing very well. With a weak renminbi among other factors, consumers are more mindful of how they spend their money today.”

“Also the margin between retail and secondary market prices is narrowing . . . now with a lower expected value, people are becoming more cautious when making a purchase,” he said. “Many buyers are not really expecting an appreciation in the value but rather choosing the pieces that they really liked for their own use.”

Swatch told analysts last month that although demand was rebounding in Hong Kong, some consumers in mainland China were delaying expensive purchases amid an overall shift to lower and mid-priced watches, according to a BernsteinAlliance note.

Meanwhile, LVMH, which owns watch brands including TAG Heuer, Hublot and Zenith, reported watches and jewellery sales had risen 7 per cent organically year-on-year in 2023, compared with a 12 per cent increase the previous year, echoing a broader slump in demand.

But according to analysts, watches will remain resilient as a store of value. A recent McKinsey and Business of Fashion report forecast that jewellery and watches would gain a share of discretionary luxury spending over the next four years while “ready to wear” would falter, noting “hard goods are more likely to retain their value in an uncertain economic environment”.

Meanwhile, Nick Hayek, chief executive of Swatch, said a slowdown in prices for used watches was a healthy dynamic for the industry, marking the end of a speculative bubble.

“It’s not a decrease in demand for luxury. People will always love a brand that is authentic,” Hayek said. “The problem is when speculation kicks in . . . People just bought what they could get, thinking . . . you will always be able to sell it if needed and [get] a higher price.”

“This speculation has gone away . . . it’s good.”

>>> Barron’s Weekend Summary

Barron’s Weekend Summary: Larry Culp, the retired CEO of Danaher, saved General Electric from a disastrous financial situation in October 2018

Cover:
-Larry Culp, the retired CEO of Danaher, saved General Electric from a disastrous financial situation in October 2018. The company's debt load of $112B was growing unwieldy, leading to downgrades from major credit-rating firms and a slashing of its dividend. In 2021, Culp announced that GE would split into three separate companies, GE HealthCare Technologies and GE HealthCare. Since the spinoff, shares of General Electric have gained about 120% and 50%, outperforming the S&P 500 index. The final move is due on April 2, with the parent company renaming itself GE Aerospace (to focus on airplane engines) and the power business being spun off and named GE Vernova.

Interview:
-This week, Barron’s interview features Mary Barra. Mary Barra, the CEO of General Motors (GM), has been in charge of the company since 2013, following its bankruptcy and return to the public market. With a 40-year tenure, Barra has managed a challenging period, including the sale of European operations in 2017, the Covid pandemic, and the rise of electric vehicles. Last year, GM saw a 10% increase in sales and issued operating-profit guidance for 2024, exceeding expectations. However, investors remain skeptical of Barra's agenda, as the stock has only risen by 3% in the past five years, compared to an 80% gain in the S&P 500 index. GM trades at a mid-single digit multiple of earnings, making it one of the cheapest large stocks in the market. Barra recently discussed the company's plans for electric and autonomous vehicles and opportunities in China.

Tech Trader:
-No update this week

The Trader:
-The Nasdaq Composite and S&P 500 are on track to close at new all-time highs, with the Nasdaq Composite set to close the week at a new all-time high of 1.6%. The gains are driven by an economy that is neither too hot nor too cold, with the personal consumption expenditures price index rising 2.4% year over year in January and durable-goods orders coming in lower than expected. The Federal Reserve is considering when to start cutting interest rates, with the federal-funds futures market suggesting that the Fed's most likely course of action this year will be to cut rates three times. This dynamic is why investors are eager to miss out on the rally and believe it can continue. However, two risks loom large: the Bloomberg U.S. Financial Conditions Index, which tracks how easy or difficult it is to borrow money, is near its easiest level since late 2021, suggesting that conditions are likely to tighten, and when financial conditions tighten, the S&P 500 usually drops.
-Snowflake stock has fallen after CEO Frank Slootman resigned and the company offered disappointing guidance. Slootman, 65, oversaw rapid growth at Snowflake, whose software allows companies to analyze large amounts of data. His departure adds uncertainty to the company's growth. Sridhar Ramaswamy, who has been running the company's artificial-intelligence strategy, will assume the CEO role immediately. However, the company's GAAP guidance for fiscal 2025 sales of $3.25B represents 22% year-over-year growth, lower than 2024's 36%. The problem is Snowflake's business model, which allows customers to pay for software on a per-usage basis, which could lead to slower growth when budgets tighten due to a slowing economy.

Features:
-UPS is set to bring investors better returns as the leading package-delivery service seeks to cut costs, increase automation, boost margins, and lift volumes to offset higher expenses from a contract with the Teamsters union. UPS stock has fallen 7% since the company offered disappointing 2024 guidance. However, the stock, now around $148, looks appealing due to its valuation, which is 18 times projected 2024 earnings of $8.28 a share. UPS offers a 4.4% dividend yield, the highest among the 20 companies in the Dow Jones Transportation DJT average. CEO Carol Tome said on the January earnings call that UPS is "rock solid" and confident about the dividend. UPS is valued at $126B and carries modest net debt of $15B. David King, lead manager of the Columbia Flexible Capital Income fund, believes that UPS can execute against a cost-focused program to drive margin expansion and upside in the stock.
-Demand for AI servers is not decreasing, according to Dell Technologies and Hewlett Packard Enterprise. Dell's backlog for orders for AI servers nearly doubled to $2.9B in the fourth quarter, with demand exceeding supply. The company's flagship PowerEdge XE9680 Rack Server, which incorporates Nvidia graphics processing units, is the fastest-ramping solution in its history. HP Enterprise also reported strong AI server demand, with lead times for GPU orders still elevated at 20 weeks or more. The companies' comments are important as some skeptics have pointed to falling lead times for Nvidia's H100 as a sign of weakening demand. Dell and HP's remarks show orders are transitioning to newer products like the H200 and GH200, indicating that demand will remain robust over the longer term.

Europe:
-Norwegian Cruise Line Holdings is expected to report a surprise profit in the first quarter amid record demand, boosting cruise stocks. Despite posting a wider-than-expected loss in the fourth quarter, investors are focused on its strong 2024 outlook. The sector had a stellar 2023, but all three stocks have faced choppy waters early this year, with Carnival and Norwegian down 20% in 2024 and Royal Caribbean down 8% for the year. Norwegian's booked position is currently at a record high due to healthy consumer demand, with some of the best booking weeks in its history since Black Friday in November last year. The cruise operator reported an adjusted loss of 18 cents per share on revenue of $1.99B in the fourth quarter, compared to analysts' expectations of 12 cents per share on revenue of $1.96B. CEO Harry Sommer aims to capitalize on the positive momentum and strong demand for cruise, which resulted in turning the year at record highs in both booked position and pricing.

Emerging Markets:
-No update

Commodities:
-Commodity markets are not performing well due to weak prices, largely due to the weakness of Chinese financial markets. Traditional speculative flows into the commodity complex have been reduced. Indifference and the use of the commodity complex as a source of funds, particularly in precious metals like gold, have contributed to this. Gold ETF holdings have declined, reaching a new four-year low at 82.54M oz., indicating that the market is not fully reliant on traditional financial markets.

Streetwise:
-No update from Jack Hough this week

>>> Weekend Papers Summary

Weekend Papers Summary

FINANCIAL TIMES
-US President Joe Biden has criticized Israel for not allowing more aid into Gaza, stating that it has "no excuses" for not allowing more aid. The US will soon begin airdropping food into the enclave, as the humanitarian crisis worsens due to Israeli attacks. Biden's announcement comes amid growing frustration with Israeli Prime Minister Benjamin Netanyahu. The US is also exploring the possibility of opening a marine corridor for humanitarian assistance. The move reflects concerns over the civilian cost of Israel's war in Gaza and the threat of lives due to disruption to aid shipments. The decision comes after over 100 Palestinians were killed in a chaotic attempt to supply aid to civilians in northern Gaza.
-Germany and France have expressed alarm at the deaths of dozens of Gazans seeking aid as Israel faces backlash over its troops opening fire near a humanitarian convoy. Germany, a staunch ally of the Jewish state, called for an explanation from Israel and urged a humanitarian ceasefire in the conflict, which has killed over 30,000 Palestinians. The German government is participating in international discussions on the best way to conduct an investigation, stating that the "appalling" images of the incident necessitate a change in the war's conduct.
-Noted academic Francis Fukuyama, of “the end of history” fame, has written an Op-Ed article in FT. Fukuyama writes that American institutions are facing a crisis, with nearly a third believing the 2020 election was stolen by President Joe Biden. Polls suggest voters would re-elect Donald Trump, who propagated this lie. Trump has refused to support Ukraine and invited Russia to attack NATO ally countries without paying an imaginary debt for US protection. With five primary victories, Trump is poised to be the Republican candidate, with consequences affecting the global community.
-Shareholders who defeated Elon Musk's $56B Tesla pay package have requested a Delaware state court to award them shares worth nearly $6B as payment. The lead counsel for the plaintiffs, Bernstein Litowitz Berger & Grossmann, conceded the award was "unprecedented" in absolute value but noted the implied percentage of value won remained conservative and in line with previous Delaware awards. The structure links the award directly to the benefit created and avoids taking Tesla's stock for fees.
-Boeing is in talks to acquire Spirit AeroSystems, a fuselage supplier spun off nearly 20 years ago, as the company faces pressure to improve its safety record. The Virginia-based group confirmed the preliminary discussions, believing that the reintegration of Spirit would strengthen aviation safety, improve quality, and serve the interests of customers, employees, and shareholders. Both companies' shares fell 1.8% to $200, while Spirit's shares closed 15.4% higher at $32.98, valuing it at almost $4B. The news came as both companies are undergoing an audit by the US Federal Aviation Administration.
-Formula One's president, Mohammed Ben Sulayem, has criticized Red Bull Racing chief Christian Horner for allegedly inappropriate conduct towards a female colleague. He said the allegations are damaging the sport on a human level and that the governing body has no plans to conduct its own investigation. Red Bull dismissed a complaint against Horner following a barrister-led investigation, which he denied. A cache of messages was anonymously sent to Sulayem, F1 chief Stefano Domenicali, and Mercedes boss Toto Wolff. Horner denied the allegations and denied the anonymous speculation.

THE NEW YORK TIMES
-Russian forces are making rapid gains outside the eastern Ukrainian city of Avdiivka, partly due to dwindling Ukrainian ammunition and declining Western aid. The Kremlin's troops are also advancing in the area due to poor Ukrainian defenses, with sparse, rudimentary trench lines populating the area west of Avdiivka. These trench lines lack additional fortifications that could slow Russian tanks and defend major roads and terrain. Avdiivka has become the site of a fierce standoff over the last nine months, and Russian troops have captured three villages west of the city in a week, and they are contesting at least one other.
-President Biden announced that the US would begin airdropping aid to Gaza to alleviate suffering, while European leaders condemned Israel for the deaths of hungry Palestinians who were killed while surrounded by the aid convoy. Gazan health authorities claim Israeli troops killed over 100 people and wounded 700 others in a "massacre" as the convoy rolled along a dark road. Israeli military spokesman Rear Adm. Daniel Hagari stated that Israeli soldiers fired when the mob moved in a manner that endangered them, but not on people seeking aid. Most people died in a stampede and some were run over by trucks in Gaza City.
-The European Union plans to increase funding for UNRWA, the main UN agency providing aid to Palestinians in Gaza, this year. The agency is fighting for survival following Israel's allegations that some staff members were involved in the Hamas-led attacks on October 7. The EU's president, Ursula von der Leyen, emphasized that innocent Palestinians should not pay the price for the crimes of terrorist group Hamas. Israeli accusations in January claimed that a dozen UNRWA employees played an active role in the attacks on Israel or its aftermath, leading to nearly 20 countries and institutions suspending their financing for the agency.
-President Biden announced that the US will begin airdropping humanitarian relief supplies into Gaza, following the deaths of Palestinians as Israeli forces opened fire near an aid convoy in Gaza City. Biden emphasized the need for more aid to help innocent people in the war, stating that aid is insufficient. The US will work with Jordan and other allies to deliver aid by air and sea, with supplies potentially being delivered by sea. Biden and Italian Prime Minister Giorgia Meloni discussed efforts to prevent the war in Gaza from becoming a larger conflict, support for Ukraine, and steps to address human trafficking and global migration.
-The funeral of opposition leader Aleksei A. Navalny on Friday marked a significant moment in Vladimir V. Putin's Russia. Navalny, who spent his last three years in prison under increasingly inhumane conditions, was laid to rest, underlining Putin's dominance. However, the day also saw pent-up dissent re-emerge on Moscow's streets. Many opposition-minded Russians still saw Navalny as their Nelson Mandela, poised to ascend as the leader of a democratic Russia. The hope for a better Russia died the day Navalny was killed.
-In the five months since Hamas invaded Israel on October 7, Donald Trump has largely remained silent on the issue. He criticized Prime Minister Benjamin Netanyahu, but later shifted to supporting Israel. Trump claimed that the invasion would not have happened had he been president, but his overall approach has been laissez-faire. In an interview with Univision, Trump advised Netanyahu and the Israelis to improve their public relations, as the Palestinians were "beating them at the public relations front." This approach reflects Trump's anti-interventionist shift in the Republican Party over the past eight years and his feelings towards Netanyahu, who he may never forgive for congratulating Biden for his 2020 victory. His hands-off approach to the Middle East conflict reflects his anti-interventionist shift in the Republican Party.
-South Korea is increasingly reliant on foreign labor to maintain its factories and farms, as the country faces a demographic crisis due to a shrinking and aging population. The country broke its record for the world's lowest total fertility rate last year. To address this, President Yoon Suk Yeol's government has doubled the quota for low-skilled workers from less-developed nations, including Vietnam, Cambodia, Nepal, the Philippines, and Bangladesh. Hundreds of thousands of these workers work in small factories, remote farms, or fishing boats, jobs considered dirty, dangerous, or low-paying by locals. Many foreign workers face predatory bosses, inhumane housing, discrimination, and other abuses. One example is Chandra Das Hari Narayan, a Bangladeshi worker who was ordered to cut down a tall tree without a safety helmet, resulting in a head injury and blood spilling from his nose and mouth.
-Oregon voters approved a decriminalization plan three years ago, hoping to stop drug users' jailing. However, the state's efforts to fund treatment programs struggled, leading to a surge in fentanyl overdoses. Portland, a major city, continued to struggle with drug addiction and despair. Recently, liberal politicians, including Gov. Tina Kotek, have supported an end to the experiment. A bill that will re-impose criminal penalties for possession of some drugs won final passage in the State Legislature, with State Senator Chris Gorsek, who had supported decriminalization, stating that adjustments were needed to address the situation in their communities. The bill passed by a 21-8 margin, highlighting the impact of addictions and overdoses on families.
-Senator Mitch McConnell's decision to step down from leadership at the end of the year has sparked a nine-month battle among Senate Republicans to succeed him in the midst of a presidential race and a campaign for chamber control. The contenders have been wooing their colleagues for the chance to become the first new face of their party in the Senate in almost two decades. The secret-ballot outcomes in Congressional leadership contests are determined by personal relationships, grudges, and who lawmakers see as the best option for their ambitions, as well as serious policy positions or the state of the institution

THE NEW YORK POST
-President Biden denied interfering with the business associates of his brother James and son Hunter Biden, despite Hunter confirming that his father attended DC dinners with foreign patrons. Biden criticized House Speaker Mike Johnson's claim that Biden is lying about these interactions during the Republican-led impeachment inquiry into alleged corruption. He called on Johnson to read the record of every witness and demanded that the corrupt officials stop their actions.
-BlackRock CEO Larry Fink's commitment to environmental, social, and governance (ESG) policies could potentially negatively impact the investment giant's core business. The company admitted in a regulatory filing that its ESG policies could be viewed differently by various stakeholders, potentially affecting its reputation and business. The firm's annual 10-K filing with the Securities and Exchange Commission revealed that its ESG policies are a risk factor for the world's largest asset manager. BlackRock has an ESG portfolio valued at $700B, a small percentage of its $10T total assets under management. It has projected that by 2030, at least three quarters of its investments will be with issuers of securities with scientific targets to cut greenhouse gas emissions on a net basis. Fink, who has emphasized climate change's long-term threat to the economy and investment opportunities, has pioneered go-green initiatives.