8 The EconomistFebruary 6th 2021
The world this week Business
Takingmarketsbysurprise,
JeffBezossaidhewouldstand
downasAmazon’schiefexec-
utivelaterthisyear,tellinghis
“fellowAmazonians”ina letter
thathewantstodevotemore
timetohisclimate-change
project,theWashingtonPost
andotherbusinessandcharity
interests.MrBezos,whohas
ledthecompanyhefounded
since1994,willbecomeexec-
utivechairman.Thenewceo
willbeAndyJassy,whoheads
Amazon’scloud-computing
division,themostprofitable
partofthecompany.King of the retail jungle
Amazon’squarterly sales
passed $125bn for the first time
in the final three months of- For the year as a whole
revenues were up by more than
a third to $386bn, almost
$100bn more than Apple’s
revenues for last year.
Google’sparent company,
Alphabet, also surpassed ex-
pectations in the fourth quar-
ter, as sales from advertising
jumped by more than a fifth,
year on year. Its cloud-services
division, however, made an
operating loss, for the quarter
and for the whole year.Following a bout of volatile
trading, in which the s&p 500
had its worst week since
October, stockmarkets quiet-
ened down. Investors remain
nervous about the co-ordi-
nated action of a group of retail
traders, through message
boards such as Reddit, to drive
up some share prices which
hedge funds were betting
would fall. Those hedge funds
have incurred losses worth
billions of dollars. There were
other casualties from the
stock-war battlefield. Theshare price of GameStop, one
of the stocks defended by the
day traders, has lost more than
80% of its value since the end
of the market skirmish.The effect of lower oil prices
was laid bare in the annual
earnings of oil and gas compa-
nies. ExxonMobil and Shell
each recorded annual net
losses of around $22bn last
year. bp’s loss, its first in a
decade, was $20.3bn. Chev-
ron’s second-weakest year for
revenues since 2000 pushed it
to a loss of $5.5bn.The euro zone’s economy
shrank by 6.8% last year. Ger-
many’s gdpcontracted by 5%,
France’s by 8.3% and Spain’s by
11%, the worst economic per-
formance for all three coun-
tries since the second world
war. The currency bloc’s annu-
al rate of inflationjumped to
0.9% in January, ending five
months of deflation. With
activity curtailed by lockdown,
the rise in consumer prices
reflected factors such as higher
shipping costs and a revision
to the index’s weightings.America’s economywas 3.5%
smaller in 2020 than in 2019,
though it is growing again at a
faster rate than many had
expected. The Congressional
Budget Office, a nonpartisanagency, thinks gdpwill
roughly return to its pre-pan-
demic level by the middle of
this year, even without any
more stimulus. The economy,
however, will lag its potential
until 2025, keeping employ-
ment subdued.Britain formally submitted a
request to join the Compre-
hensive and Progressive
Agreement for Trans-Pacific
Partnership, a free-trade
agreement among 11 countries,
which include Australia, Cana-
da, Japan and Mexico.Uberexpanded its home-
delivery business by agreeing
to buy Drizly, which supplies
alcohol to your door, for $1.1bn.
One estimate reckons that
online sales of alcohol grew by
80% in America last year as a
consequence of lockdown.Alibabaundertook a round of
dollar bond sales with the aim
of raising a reported $5bn, after
the Chinese e-commerce giant
exceeded quarterly sales fore-
casts. The company’s founder,
Jack Ma, has fallen foul of the
authorities, to such an extent
that his name has been omit-
ted from a list of China’s entre-
preneurial greats published by
state media. Ant Group, a
fintech firm founded by Mr Ma
that is affiliated with Alibaba,is close to securing a deal with
officials about restructuring its
business.McKinseydrew up a deal with
47 American states to settle
claims that the consultancy
firm advised Purdue Pharma to
vigorously market its OxyCon-
tin painkiller, contributing to
America’s opioid crisis. It is a
rare instance of McKinsey
being held legally accountable
for its advice to clients.General Motors’share price
retained the gains it made after
the carmaker announced that
it would phase out production
of petrol-fuelled vehicles by
2035 and instead sell only cars
and pickup trucks with zero
exhaust emissions. gmis
investing $27bn in electric-
and autonomous-car tech-
nology, and promises that by
the end of 2025, 40% of its
models in America will be
powered by battery.A happy occasion
One of the winners from
lockdown, Moonpig, had a
successful ipoin London. The
online provider of greeting
cards and gifts saw its share
price soar by 17% on its special
day, prompting salutations of
congratulations and I love yous
from investors.Biggest companies
United States, by market capitalisation
February 3rd 2021, $trnSource: BloombergTe s l aAlphabetAmazonMicrosoftApple0.50 2.52.01.51.