—— CPI pressure makes Fed raise higher interest rate； Ford recalls 10,000 Mustang Mach-Es；Ukraine’s economy could shrink by 45%； Food truck startup Wonder is valued at $3.5 billion; Senate is considering imposing additional taxes on oil companies; Stock bear market may continue for a year; Coinbase announced thousands of layoffs for the winter
1. CPI pressure makes Fed raise higher interest rate
Federal Reserve Bank of New York Governor William Dudley, who served from 2009 to 2018, said today that he thinks the central bank is likely to raise its benchmark interest rate by 0.75% this Wednesday after last week’s very unfavorable CPI data.
William was the chief economist at Goldman Sachs, and his views are highly valued by the industry. He once criticized the Fed for raising interest rates too slowly, and the anti-inflation effect is not obvious.
William said that a sharp rate hike is something the Fed is unwilling to do but has to do, and many people may lose their jobs as a result. While the economy will not collapse immediately, many problems await us in the future.
Ellen Meade, a former senior Fed economist, also sees a 0.75% rate hike this week as very likely.
Fed is likely to adjust rate hikes at the last minute after Friday’s CPI data
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2. Ford recalls 10,000 Mustang Mach-Es
Ford Motor Co. recently notified major dealers to suspend deliveries of Mustang Mach-E trams, affecting 48,924 vehicles. It is reported that dealers can sell the car, but not to the customer until the problem with the vehicle is resolved.
Ford said the Mach-E’s high-voltage battery had a potential risk of overheating, which could cause the car to lose power on the move. Fixing this flaw only requires a software update, so repairs won’t take too long.
In 2021, Ford sold 27,140 Mach-E models, with sales so far this year at 15,718, up 50% from a year earlier.
Ford Mustang electric SUV has a cool look and is popular in the market
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3. Ukraine’s economy may shrink by 45%
According to statistics from the Kyiv School of Economics, Ukrainian farms, livestock, and large equipment lost a total of $4.3 billion due to the Russian-Ukrainian war. The average loss is from crops and a quarter from farm equipment.
According to the report, a reduction in Ukraine’s crop exports could shrink the country’s economy by 45%, and the risk of famine in other countries around the world has become greater.
Global food prices have risen overall as millions of tons of grains and rapeseed oil are “stuck” in Ukraine. There are also a large number of mines deployed in the sea around Ukraine, which will take at least several months to clear.
The war killed 5.7 million poultry and lost a total of $613 million in grain.
Many agricultural infrastructures in Ukraine have been damaged recently, and a large number of crops have suffered losses
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4. Wonder is valued at $3.5 billion
Wonder Group, a food delivery startup led by Jet.com founder Marc Lore, raised $350 million in new funding last month. To date, the company has raised $900 million in debt and equity financing at a valuation of $3.5 billion.
Mark said the company’s valuation six months ago could have been set higher and the amount raised would have been larger. Mark, 51, has been in business several times and has sold several startups. In 2021, he sold home goods company Quidsi Inc. to Amazon for $500 million. Walmart also bought Jet.com, founded by Mark, for $3.3 billion.
Wonder mainly builds a food truck network. Mobile kitchens can better deliver food and serve more users. Currently, the company’s operations in the New Jersey area can cover 132,000 households.
Mobile kitchens can process food more efficiently and deliver it to orderers in a timely manner
Source: WSJ – Marc Lore’s Food-Delivery Startup Wonder Is Valued at $3.5 Billion After Capital Raise
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5. Senate considers surcharge on oil companies
Senator Ron Wyden of Oregon has proposed that oil companies pay a 21% surtax on top of the 21% corporate tax rate on more than 10% of their net profits, for a total of 42%, according to people familiar with the matter. %.
Ron has yet to publicly announce his proposal, but he needs the support of all 50 senators to pass the bill. The Biden team, which is looking for all means to lower oil prices, has also taken note of Roden’s proposal.
In a speech at the Port of Los Angeles on Friday, Biden said Exxon made more profit than God last year.
The White House is also considering different ways to boost crude production and lower prices, but opponents of Ron’s proposal argue that the surcharge could discourage oil companies from producing oil. In addition, if these taxes are issued to consumers in the form of rebates, this will increase the demand for gasoline and will not play a role in balancing gasoline supply and demand.
A surcharge on oil companies could have the opposite effect
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6. US bear market may last for a year
On Monday, U.S. stocks fell into bear market territory again, the fourth bear market in the past 20 years. During the bear markets of 2000 and 2008, it took a long time for U.S. stocks to truly bottom out and return to their previous levels.
According to an analysis by Peter Garnry, head of equity strategy at Saxo Bank A/S, this sell-off in U.S. stocks is very similar to the dotcom bubble of 2000 and the bear market of 1973, which was accompanied by crude oil and commodities The surge in prices, while the valuations of tech companies are on the high side. Peter believes it could take a year for the bear market to really bottom out this time around, with a decline of around 35%.
During the dot-com bubble, the S&P 500 fell as much as 51%, bottoming out for 638 days and returning to pre-crash levels more than 1,000 trading days later. This data also means that the bear market we are currently experiencing is likely still in its early stages.
2000 and 2008 market declines lasted 638 and 352 days, respectively
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7. Coinbase announced winter layoffs
Today, Coinbase Global Inc., the world’s largest cryptocurrency exchange, announced that it will lay off 18% of its workforce as the cryptocurrency market enters a cold winter. Unfortunate employees who are laid off will receive 3.5 months of severance pay.
Competitors Gemini Trust and BlockFi have also announced layoffs.
In recent years, Coinbase has expanded significantly and recruited 1,200 people as cryptocurrencies have attracted a large number of retail investors and institutions. By the end of the quarter, the company plans to cut jobs to around 5,000. So far this year, Coinbase’s stock price has evaporated by 80%.
Cryptocurrencies have been hot in the past two years accompanied with aggressive expansion
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The content of this article comes from various financial news media such as The Wall Street Journal, Financial Times, Bloomberg