Good morning and we start today with how we began this holiday-shortened week: the election of a new Speaker in the House of Representatives.
The contest to elect a new Speaker will drag into a fourth day after lawmakers voted to adjourn proceedings yesterday evening following a historic 11th ballot defeat for Republican Kevin McCarthy.
Despite last-ditch attempts by McCarthy to quell opposition and secure the 218 votes he needs to be elected Speaker, 20 Republicans repeatedly voted against him, depriving him of the simple majority needed to clinch the gavel.
McCarthy has resisted calls for him to step aside in favour of another Republican to break the historic deadlock. Steve Scalise, a congressman from Louisiana and McCarthy’s deputy, is seen as a possible compromise candidate.
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At the same time Democratic party leaders have shown little willingness to help end the stalemate, despite suggestions that the party could band together with a group of Republicans to back an alternative candidate. Instead they have united behind Hakeem Jeffries, the 52-year-old congressman from New York, who took over as the Democrat leader in the House after Nancy Pelosi said she would step down.
The deadlock has been humiliating for McCarthy. The last time a Speaker needed more than one ballot was in 1923, when nine rounds of voting took place. But this is the first race for the Speaker’s gavel to require a minimum of a dozen ballots since 1821.
The FT View: This week’s events in the House of Representatives represent an existential moment for the Republican party.
Five more stories in the news
1. Exclusive: Taiwan to create domestic satellite champion to resist China Taiwan is in talks with a number of domestic and international investors to help its space agency establish its own satellite communications provider. Inspired by the role Elon Musk’s Starlink has played in the war in Ukraine, Taipei is expanding efforts to fortify itself against a potential assault from China.
2. Ukraine to receive more military hardware Germany’s chancellor Olaf Scholz has dropped his opposition to providing Ukraine with heavy weaponry, agreeing yesterday to provide the government in Kyiv with Marder infantry fighting vehicles and a Patriot missile battery. The US will send Bradley fighting vehicles after talks between Scholz and Joe Biden. The new pledges of military support from Berlin and Washington follow France’s decision to provide armoured combat vehicles to Ukraine earlier this week.
3. Samsung profits fall 69% The biggest piece of corporate news so far today comes from Samsung. The world’s largest producer of memory chips, smartphones and TVs said profits slid in the fourth quarter to an eight-year low as a slowing global economy crushes demand for its products. The surge in demand during the pandemic has reversed and now its customers are having to cope with inventory surpluses.
4. ChatGPT developer in funding talks The developer behind the artificial intelligence bot ChatGPT, which went viral last month signing up more than 1mn users in five days, is in discussions to raise fresh capital. San Francisco-based OpenAI is talking to investment groups, including Peter Thiel’s Founders Fund, about a deal that would value it at $30bn, up from the $20bn valuation it received during a secondary share sale in 2021.
5. China and Hong Kong to reopen border After nearly three years of coronavirus restrictions, China and Hong Kong have confirmed plans for a limited reopening of their shared border on Sunday. Hong Kong’s chief executive John Lee said yesterday crossings would be limited to 60,000 a day each way, a fraction of the pre-pandemic visits. The move is timed to coincide with the dropping of quarantine requirements for overseas travellers to China.
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The day ahead
Employment report Investor attention will once again be on the employment market today, with the release of the December jobs report and unemployment rate. The number of jobs created by the US economy last month is expected to have slowed from November, according to a Bloomberg survey of economists. The Federal Reserve is actively trying to cool the hiring market by rapidly increasing interest rates to reduce price pressures in the economy. Thanks to all our readers who voted in yesterday’s poll. Two-thirds of voters thought the US economy would slide into recession this year.
Markets outlook Equity markets in Europe were flat ahead of the release of the jobs report while contracts tracking Wall Street’s benchmark S&P 500 dipped slightly. US shares fell yesterday after a report showed job creation in the private sector last month was stronger than expected.
Anniversary of US Capitol attack US president Joe Biden will deliver remarks at the White House to mark the second anniversary of the January 6 insurrection. In a final report released at the end of the last year, a congressional panel said former president Donald Trump was the “central cause” of last year’s attack on the US Capitol.
Putin’s 36-hour ceasefire due to start in Ukraine A unilateral ceasefire ordered by Russian president Vladimir Putin over the Orthodox Christmas on January 6-7 is due to begin today. The ceasefire, which followed an appeal by Patriarch Kirill, head of the Russian Orthodox Church, was dismissed by Kyiv as hypocritical and a propaganda stunt.
Returning to its regular January schedule, the World Economic Forum’s 2023 annual meeting will bring together global leaders in Switzerland next week. Join FT Live at Davos for in-person and digital events January 16-20. View the events and register for free here.
What else we’re reading and watching
Ruchir Sharma’s investor guide: from peak dollar to better TV The end of the era of easy money and return of inflation shook up the global financial system last year, clearing the way for new winners to emerge. Ruchir Sharma picks the 10 trends that will shape 2023.
A Moscow diary: fear, loathing and deep denial While missiles rain down on Kyiv and villages in Russia’s backwaters have lost much of their adult male populations to the draft, Putin’s war does not seem to have changed much in Moscow. Max Seddon, the FT’s Moscow bureau chief, has been back to the Russian capital.
🎥 Watch: How India can revolutionise women’s cricket The Indian Premier League transformed cricket from a game struggling to find a future to one of the most valuable sporting assets in the world. While top men’s players have become millionaires, female players have struggled to make ends meet. The launch of a women’s league could change the game around the world.
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Whatever happened to Google Search? Google Search was once one of the wonders of the online world, writes Elaine Moore. Its clean, organised pages of results filtered the otherwise unmanageable slog of information on the internet, she writes. That was until it became cluttered with adverts.
More on technology: Innovation Editor John Thornhill offers a partial defence of Silicon Valley.
The seven types of email you should never, ever send With inboxes already filling up with junk mail since the return to work, Tim Harford offers his guide to bad email etiquette.
Take a break from the news
Our six films to watch this week include a grouchy Tom Hanks in A Man Called Otto, Antonio Banderas as a killer in The Enforcer and Christian Bale meeting Edgar Allan Poe in The Pale Blue Eye.
Source: Economy - ft.com
