The Economist May 14th 2022 11
The world this week Business
Stockmarketsenduredanoth
erpunishingstretch,asin
vestorsfrettedabouttheFeder
alReserve’saggressivemoves
totightenpolicy,high
inflationandslowinggrowth.
Afteritslongestweeklylosing
streaksince 2011 thes&p 500
closedbelowthe4,000mark
forthefirsttimein 14 months.
TheNasdaqCompositeplum
metedtoitslowestfinishsince
November2020.Apple’sshare
pricedroppedby12%overfive
days.Theselloffextendedto
stocksinEuropeandAsia.
Whatgoesup...
Cryptocurrenciestook a
pummelling amid the commo
tion, as investors pulled back
from speculative assets.
Bitcoin shed 30% of its value
over a week. Coinbase, the
biggest cryptoexchange in
America, lost more than 2m
users in the second quarter, a
fifth of its customer base.
More data pointing to a worse
slowdown in Chinathan
expected also spooked in
vestors. With supply chains
disrupted and factories closed
because of covid lockdowns,
the country’s exports grew by
3.9% in April, year on year, the
slowest pace since June 2020.
America’s annual rate of
inflationas measured by the
consumerprice index fell to
8.3% in April, from 8.5% in
March, the first drop in eight
months. But most economists
had been expecting April’s
figure to fall to 8.1%.
Christine Lagarde, the presi
dent of the European Central
Bank, gave the clearest signal
yet that it will raise interest
rates in July or September
when she suggested that she
expects such a move in the
third quarter. The bank has
maintained a negative rate on
its deposit facility since 2014.
Hong Kong’scentral bank
stepped in to protect the Hong
Kong dollar’s peg to the green
back for the first time since
2019. Investors have been
shedding assets denominated
in Hong Kong dollars as the
local economy suffers from
covid lockdowns and crack
downs on Chinese tech firms.
BlackRock, which two years
ago warned about the risks of
climate change to investments
and pushed for greenfriendly
shareholder proposals at com
pany meetings, said it would
support proportionately fewer
of them this year because they
are not consistent with its
clients’ interests. The world’s
biggest asset manager gave
several reasons, including a
regulatory change in America
that has increased the number
of proposals of “varying qual
ity” and the impact of the war
in Ukraine on energy markets.
And it won’t support share
holder votes that are intended
to micromanage companies.
fifa, football’s global govern
ing body, and Electronic Arts,
a videogame publisher,
announced an end to a three
decade deal by which fifalent
its name to an annual series of
games. The deal had brought in
$150m a year for fifa, making
it the organisation’s biggest
commercial venture besides
the World Cup.
SoftBank said its techfocused
investment funds posted a loss
of ¥3.7trn ($33bn) for the year
ending March 31st, pushing the
Japaneseconglomeratetoan
overallannuallossof¥1.7trn.
ThevalueofSoftBank’sstakes
incompaniessuchasCou
pang,DidiChuxing,DoorDash
andGrabhaveplummetedover
theyear,astheirshareprices
havetumbled.
Themagickingdom
Disney allayed fears that it
would follow Netflix by losing
subscribers from its streaming
service, when it reported that
an additional 7.9m customers
had signed up to Disney+in
the first quarter, taking its
subscription base to 137.7m.
That is still some way behind
Netflix’s 222m, but Disney+ is
sticking to its goal of reaching
up to 260m users by 2024.
With sales from its covid vac
cine set to dip in coming years,
Pfizershored up its future
revenue stream by agreeing to
acquire Biohaven Pharmaceu-
ticals, which develops drugs
for neurological disorders, for
$11.6bn. Separately, BioNTech,
the German drug company that
collaborated with Pfizer to
produce their vaccine, said
revenue and profit more than
tripled in the first quarter, year
on year, though it expects sales
will slow. There is now a huge
glut of covid vaccines in the
market.
Building on its pledge of “deli
vering a smokefree future”,
Philip Morris International,
which makes Marlboro ciga
rettes, struck a deal to buy
Swedish Matchfor $16bn.
Swedish Match’s smokeal
ternative products include a
type of snuff called “snus”,
tobacco pouches that are
placed behind the upper lip.
Andy Warhol’s silkscreen
portrait of Marilyn Monroe,
“Shot Sage Blue Marilyn”,
was sold for $195m at Christie’s
in New York. That was a record
price at auction for a work by
an American artist and also for
a piece of 20thcentury art; the
previous record was the
$179.4m paid for Pablo Picas
so’s “Les Femmes d’Alger (Ver
sion O)“ in 2015. The superrich
are itching to splash out after
covid suppressed demand.
“The expensive stuff got more
expensive,” said Christie’s
head of 20thcentury art.