🐂 Global Forum Insights

Markets

Stocks experienced a positive Thursday, with the Nasdaq gaining over one percentage point as several technology companies recovered from earlier losses in the month. This recovery was evident in the performance of Apple, which saw an increase following an upgrade to a "buy" rating by Bank of America, with a predicted potential surge of over 20%.

World

Supply Chain Risk

The status of the ship still stuck raises concerns about global trade as war, climate change, and various disruptive factors impact crucial oceanic trade routes, posing a threat to the worldwide GDP.

The term "chokepoints" refers to narrow canals and straits that handle significant daily maritime traffic. Key waterways such as the Malacca Strait, connecting the Pacific and Indian Oceans, the Suez Canal, the Panama Canal, and the South China Sea are vital for global shipping and could disrupt the industry if blocked.

Currently, the Red Sea, particularly the area feeding into the Suez Canal, is facing heightened pressure. Ongoing missile attacks by Houthis on commercial ships in this region since November have compelled vessels to take longer routes around South Africa's Cape of Good Hope, adding 10–14 days to their journey.

These chokepoints are attractive targets for bad actors due to their small geographical size and substantial economic importance. The global trade industry incurred nearly $10 billion in losses for each day the Suez Canal was closed in 2021. The Suez Canal Authority reported a 40% revenue decline in the first 11 days of January due to regional unrest.

In response to these threats, the US and UK have expressed their commitment to taking military action to safeguard ships and global supply chains. Recent actions include a US strike against Houthi anti-ship missiles.

Beyond geopolitical challenges, trade is also threatened by environmental factors. A drought affecting Central America has led to dangerously low water levels in the Panama Canal. As a result, the canal had to reduce ship crossings by 36% in a week, with anticipated costs ranging from $500 million to $700 million for the canal operator.

Finance

Reddit’s IPO is reportedly due in March

As per Reuters, the highly anticipated initial public offering (IPO) of the social media platform is set to launch by the end of March, following its public filing expected in late February. This event marks the first significant social media IPO since 2019, when Pinterest went public. The spotlight will be on Reddit's user base, known for driving meme stock rallies, including those of AMC and GameStop, potentially influencing the company's stock market debut.

With a valuation of approximately $10 billion in 2021, Reddit plans to sell 10% of its shares in a competitive landscape where it vies for attention and advertising dollars against platforms like TikTok and Facebook.

Politics

Overheard at Davos

The World Economic Forum concludes today in Davos, Switzerland, following a week of discussions among prominent CEOs and global leaders. Here are some noteworthy moments from arguably the world's most significant annual gathering that you might have missed:

1. Argentina's new president, Javier Milei, sounded a warning against what he labeled as Davos's "socialist agenda," expressing concerns that it would bring misery to the world. Elon Musk reportedly appreciated Milei's speech.

2. Salesforce CEO Marc Benioff acknowledged the potential dangers of rapid AI development, drawing parallels to the devastating impact witnessed in Hiroshima. Benioff emphasized the need to avoid an "AI Hiroshima," despite Salesforce's recent launch of AI-powered software, Einstein GPT.

3. OpenAI CEO Sam Altman discussed the discomfort associated with the future versions of AI, suggesting that AI systems could provide different answers to individuals based on their locations and opinions. Altman highlighted the responsibility of a tool builder in addressing the varied uses of AI tools.

4. Coca-Cola CEO James Quincey dismissed concerns about Ozempic affecting the soda giant's business, stating that the ability to consume fewer calories doesn't apply to liquids. Quincey pointed out that Coca-Cola owns a diverse range of beverage products, including bottled water.

Honorable mentions include JPMorgan CEO Jamie Dimon urging everyone to stop asking him about bitcoin, and Secretary of State Antony Blinken experiencing technical issues with his Boeing 737 before takeoff.

Medicine

Monkeys in people’s backyards?

xpress gratitude if your neighbor's only disturbance is a noisy dog, as residents and animal rights groups in Texas and Georgia are strongly opposing plans to establish breeding centers for tens of thousands of monkeys in their communities.

In Southwestern Georgia, locals crowded a city council meeting to voice their demand for officials to reject Safer Human Medicine's proposal for a $396 million monkey breeding center. The facility aims to house up to 30,000 long-tailed macaques for sale to medical research groups.

Executives from Safer Human Medicine, formerly associated with the $12 billion biomedical company Charles River Laboratories, faced criticism last year for allegedly mislabeling smuggled wild monkeys as lab-bred. Charles River's attempt to build a macaque facility in southeastern Texas has also faced opposition, with local outcry and a PETA campaign impeding those plans.

Concerns raised by opponents of the monkey facilities include noise levels, the potential for escape, the risk of disease spread, the disposal of substantial daily waste (estimated by PETA to fill nearly an Olympic pool), and potential impacts on property values.

The purpose of these breeding facilities is to provide a domestic source of research monkeys for clinical drug testing, addressing the challenges posed by a tight global supply of these test animals.

Politics

The DOJ released a scathing report on the Robb Elementary School shooting

In a comprehensive 600-page report, the department criticized the handling of the 2022 Uvalde, Texas, shooting, where 21 people, mostly children, lost their lives, labeling it a complete failure. The blame was directed at police, as well as local and state officials, citing disregard for protocols and "egregious poor decision making." The 18-year-old gunman, armed with a semiautomatic rifle and known to have serious issues, was inside connected fourth-grade classrooms for 77 minutes before being confronted by the police. Some officials involved in the response, including school district police chief Pete Arredondo, have either been fired or resigned. However, certain families of the victims believed that the Department of Justice's investigation fell short as it did not result in criminal charges against these officials.

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