The Economist - UK (2022-04-02)

8 The Economist April 2nd 2022
The world this week Business

Theyieldsonshort­term

Americanbondsrosesignif­

icantly,anindicatorthat

marketsareexpectinghefty

interest­raterisesfromthe

FederalReserve.Pressureon

bondyieldswasfeltglobally.

Japan’scentralbankofferedto

buyanunlimitedamountof

governmentbonds,an

interventiondesignedtopro­

tectits0.25%caponJapan’s

ten­yearyield.Yieldsontwo­

yearAmericanTreasurynotes

brieflyroseabovethoseonthe

ten­yearnoteforthefirsttime

since 2019 (governmentbonds

withlongertermsusuallyoffer

higheryields).Suchan

inversionoftheyieldcurveis

oftentakenasa signthata

recessionisonthecards.

Thecost-of-livingcrisis

Consumers in Britain bor­

rowed an extra net £1.5bn

($2bn) on credit cardsin

February, the highest monthly

figure since records began in

1993. The data suggest that
with inflation at a 30­year
high, people are taking on
more debt to maintain house­
hold spending as prices in­
crease. Andrew Bailey, the
governor of the Bank of Eng­
land, warned this week that
consumers face a “historic
shock” to their incomes be­
cause of inflation, fuelled
mostly by energy prices. 

Germany’s annual inflation

rateis expected to come in at

7.3% for March, according to

the country’s statistics office,

the highest rate since German

reunification in 1990. Inflation

in Spain surged to 9.8%, the

highest in that country for

almost 40 years. 

hpsaid it would buy Poly,

which makes devices for

video­conference communica­

tions, in a transaction valued

at $3.3bn. The computer­

maker said the deal would

bolster its business in hybrid

working. It reckons that 75% of

office workers are investing in

improvements to their home

office set­ups; revenue in the

“office meeting room

solutions” industry is expected

to triple by 2024. 

Theco­chiefexecutiveofsk

Hynix, a SouthKoreanchip­

maker,saidhiscompanywas

interestedinbuyingArm

throughaninvestmentcon­

sortium.Nvidia’sproposed

$60bnacquisitionoftheBrit­

ishchipdesignercollapsed

recentlybecauseofcompeti­

tionconcerns.skHynix

stressedthatit doesnotyet

havea specificplantotake

overArm.

Teslaannounceditsintention

tosplititsstock,thoughit

didn’tsaywhenandwhatthe

ratiowouldbe.Theelectric­car

makerhassplititsstock

before,in2020,whenshare­

holdersweregivenfivenew

shares(soreducedinvalueby

four­fifths)foreveryonethey

owned.Stocksplitsarein­

tendedtodrumupinterest

frominvestorswhomightbe

putoffbythehighpriceofa

company’sshares.Alphabet

andAmazonbothrecentlylaid

outplansfor20­1stocksplits.

No longerhereforthebeer

Carlsbergand Heinekenwere

among the latest companies to

announce that they are leaving

Russia. Carlsberg holds rough­

ly a quarter of the Russian

market for beer through its

ownership of Baltika, which it

will now dispose of. 

Russia’s main stockmarket

reopened trading in all its

listed companies. This came a

few days after trading in 

equities was allowed to re­

sume following a month­long

shutdown because of the

invasion of Ukraine. The moex

index dropped by 2.2% on the

first full day of operations. 

Oil pricesfell sharply, as

America prepared to announce

another large release of oil

from its strategic reserve. 

A regulatory filing revealed

that the stock options Intel

granted to its new chief exec­

utive, Pat Gelsinger, last year

were worth $169.5m, much

more than the company had

initially calculated. Mr Gelsin­

ger’s total pay package for 

came to $178.6m. That is more

than the $98.7m Apple award­

ed to Tim Cook, which sparked

a shareholder revolt.

Fred Smithdecided to step

down as chief executive of

FedEx, which he founded 

years ago. Mr Smith came up

with the idea of a logistics firm

based around transport hubs

in an economics paper when

he was a student at Yale in

1965. The paper received a poor
grade from his professor;
FedEx is now a global giant
with annual sales of $84bn. 

A private­equity consortium

agreed to take Nielsenprivate

in a $16bn buy­out. Nielsen’s

main business, measuring

advertising reach across net­

work and cable television, is

still viable. But the deal is also

an investment in Nielsen one,

a new platform that measures

viewing across streaming,

network and digital channels. 

“coda”became the first film

released primarily over

streaming to win an Oscar for

best picture. “coda” is avail­

able on Apple tv+, which has

beaten Netflix and Amazon

Prime, its bigger rivals, in

having one of its streaming

movies win the award. The

main event at the ceremony,

however, came when Will

Smith, perhaps channelling

his boxing skills from an earli­

er acting role, hit Chris Rock,

the host, onstage for insulting

his wife. It was another first for

the Oscars.