The Econmist - USA (2021-10-30)

14 TheEconomistOctober30th 2021
The world this week Business

DemocratsintheAmerican

Senatetriedtopindownpro­

posedtaxrisesthatwillpay

fora $1.5trnspendingbillon

welfareandtheclimate,legis­

lationthatismuchreducedin

scopefromwhatitsbackers

originallyenvisaged.Buttheir

planswerethrownintoconfu­

sionwhenmoderatespushed

backagainstbothradicalideas

ontaxingthesuper­wealthy

anda levyontheprofitsof

America’sbiggestcompanies

basedontheirfinancial

accountingforshareholders,

andnotwhattheydeclareto

thetaxman.

A blizzardofpolicieswas

announcedintheBritish

government’sbudget(or

leakedtothepressseveraldays

before).Thenationalliving

wageistoriseto£9.50($13)an

hour,a 6.6%increase.And

withfuelpricessurging,a

plannedtaxincreaseonpetrol

wasscrapped.Thatdidn’tgo

downwellwithgreens,just

daysaheadoftheBritish­

hostedcop 26 summit.

Mastersofthemetaverse

Facebookformalised its ex­

pansion into the “metaverse”, a

collection of online worlds

where users’ avatars buy

clothes, attend concerts and

socialise. The company an­

nounced more investment in

its Reality Labs division, which

from now on will report sep­

arately from the rest of the

business. Part of the reason for

Facebook’s refocus is growing

competition from TikTok and

other apps for attention from

younger customers, many of

whom think the platform,

which will turn 18 next year, is

boring. It also faces claims that

it cannot control hate speech.

The other highlight in

Facebook’s quarterly earnings

was the impact on its growth

prospects of Apple’s new

privacy policy, which allows

iPhone users to say whether

they want to be tracked for

advertisingpurposes. Mark

Zuckerberg said the policy was

having a negative effect on

Facebook. Snap, a photo and

messaging platform, also

blamedthechangeforweaker­

than­expectedrevenues;its

sharepriceshedmorethana

quarterofitsvalue.

MeanwhileAlphabet, the

parentcompanyofGoogle,

saidthatthechangeinApple’s

policywashavingonlya mod­

estimpactonitsadvertising

business,mostofwhich

comesviaitssearchengine.

Salesfromadsacrossitsdivi­

sions,whichincludeYouTube,

surgedinthethirdquarterby

43%,yearonyear,to$53bn.

Teslabecamethefirstcarmak­

er to pass a stockmarket value

of $1trn, after Hertz placed an

order for 100,000 of its vehi­

cles as part of its drive to elec­

trify its rental fleet. Tesla joins

Alphabet, Amazon, Apple and

Microsoft in the club of Amer­

ican companies valued at over

$1trn. Elon Musk’s net fortune

alone is now worth more than

ExxonMobil’s market value. 

Thebullishquarterlyearnings

seasonincorporateAmerica

pushedthes&p 500toa new

record.Theindexisupbya

fifthsincethestartoftheyear.

Oilpricesclimbed,after

GoldmanSachsestimatedthat

globaldemandwillsoonreach

pre­pandemiclevels,justas

theworldfacesanenergy

crunchinnaturalgas.Brent

cruderoseabove$86a barrel,

upbya fifthsincethestartof

September.SaudiArabia,

meanwhile,pledgedtocutits

carbonemissionstonetzero

by2060.Thepromisewasmet

withsomescepticism;the

targetexcludedthekingdom’s

fossil­fuelexports.

TheSpanishgovernment

softeneditsproposedwindfall

taxontheprofitsofutility

companiesbyallowingfor

exemptions.Itannouncedthe

policyinSeptemberamid

soaringelectricitybillsfor

consumers,promptinga back­

lash from utilities, which said

investment would suffer. 

Beyond Meat’sshare price

struggled to recover from the

hammering it took after the

company warned that sales

would be lower than expected

because several factors have

reduced demand. The maker of

plant­based products had a

hugelysuccessfulipoin2019,

buthasfacedstiffcompetition

inthemarketforfakemeat

sincethen.

Eurostarcouldfacecompeti­

tionrunningpassengertrains

throughtheChannelTunnel

thatlinksBritainandFrance.

Renfe,Spain’sstate­owned

railwaycompany,reportedly

thinksit canoffera viable

alternativeserviceandhas

gainedthesupportofthe

tunnel’soperator.

DraftKings, anAmerican

fantasy­sportsandbetting

operator,abruptlyabandoned

its$22bntakeoverapproach

forEntain, a Britishgambling

firmandowneroftheLad­

brokesbrand.Americangam­

blingcompaniesarelookingto

expandtheirglobalreach,but

bothsidesreportedlycouldn’t

agreeonthetermsofa deal.

Retailregeneration

Augmenting its expansion

from suburban warehouses to

city­centre locations, ikeais

buying the building in Lon­

don’s Oxford Street that used

to house Topshop before it

went bankrupt. That’s good

news for the city’s busiest

shopping thoroughfare, which

lost some big high­street

names during the pandemic. 

Tesla’s share price, $

Source: Refinitiv Datastream

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