What’s Up? (Feb. 13-19)
Google Privacy Changes
Google announced on Wednesday that it planned to change its Android smartphone software to limit the sharing of data across apps and with third parties. The other major smartphone software provider, Apple, which has made privacy a selling point, announced new measures last year. But the two companies have taken different approaches. Apple allows customers to choose whether to block tracking, which has had a significant impact on companies that rely on customer data to target ads. Meta said this month that the changes would cost it $10 billion in ad revenue this year. Google, which unlike Apple makes most of its money from selling digital ads rather than devices, promised that its changes would not be as disruptive. It plans to support its existing technologies for at least two more years to give advertisers a chance to prepare.
Americans Keep Shopping
Despite shortages of some products and droves of workers calling in sick because of Omicron, Americans kept shopping last month. Retail sales in January rose 3.8 percent from a month earlier, according to data released by the Commerce Department on Wednesday. That’s a rebound from a sharp decline in December, when spending dipped 2.5 percent. The new numbers do not account for rapidly rising prices, and there are some data quirks to consider (gift cards received in December are often spent in January, for instance), but economists said the rebound was still a good sign for the economy. In another sign of resilient consumer spending, Walmart said on Thursday that it beat earnings expectations last quarter, even though, as the nation’s largest grocery chain, it is especially sensitive to inflation and rising wages. Macy’s, Home Depot and Lowe’s report earnings this coming week.
China’s Version of the Olympics
The Winter Olympics, which end on Sunday, looked rosier on social media than they did in person. China used bots, fake accounts, genuine influencers and other tools to push its narrative of the Games (a feel-good success of an event) and to play down other aspects (like calls to boycott the Games over the country’s human rights abuses). Some of these efforts were directed at foreign viewers. Inside China, the state has more power to curate. The men’s hockey game between the United States and China, which the U.S. team won 8-0, was not shown, for instance, on the main state television sports channel. Brown, snowless mountains were cropped out of view on state media. And an appearance by Peng Shuai, the professional tennis player who disappeared after she accused a senior Communist Party leader of sexually assaulting her, wasn’t mentioned.
What’s Next? (Feb. 20-26)
An Invasion’s Energy Impact
President Biden said Thursday that a Russian invasion of Ukraine remained a “very high” possibility. And that’s not good news for energy markets. An invasion could drive up oil and natural gas prices, prolonging high inflation and affecting global financial markets. Countries reliant on Russia for energy could be especially susceptible to economic reverberations. In 2021, 38 percent of the natural gas used by the European Union came from Russia, according to the research organization Bruegel. If the flow of natural gas is interrupted, businesses could be forced to close and household utility bills, already higher than usual, could continue to rise.
