Good morning. We start today with a round-up of results from tech titans Apple, Amazon and Google parent Alphabet.The fourth-quarter earnings highlight the challenges technology companies face as the world emerges from the pandemic which has left its mark on supply chains, labour markets and consumer demand.Apple blamed sickness at an assembly plant in China for delaying iPhone deliveries after it posted a decline in quarterly revenues for the first time in three and a half years.Tim Cook, chief executive of Apple, said that the China supply chain challenges had been resolved. “We’re now at the point where production is what we need it to be,” he said. “And so the problem is behind us.”Google parent Alphabet reported a contraction in quarterly ad spending for only the second time in the company’s history as economic growth weakened and the pandemic-fuelled boom in digital services receded.The company, which announced 12,000 job cuts last month, said it expected to incur costs of $1.9bn-$2.3bn as a result of the headcount reductions and a further $500mn from office space shrinkage, most of it in the first quarter of this year. Like Mark Zuckerberg a day earlier, Alphabet chief executive Sundar Pichai highlighted the potential of artificial intelligence for the future of his company. Meanwhile, Amazon said growth at its AWS cloud computing division, its largest profits driver, had slowed as clients cut back on spending. “Everyone’s trying to cut their budgets,” said Amazon’s chief financial officer, Brian Olsavsky.Stronger than expected sales from Amazon’s ecommerce platform in the 2022 holiday shopping season, however, helped offset some of the disappointing results from the cloud computing division.Shares of all three companies dipped in after-hours trading, with Alphabet and Amazon down 4 per cent and Apple falling 3 per cent.How well did you keep up with the news this week? Take our quiz.Five more stories in the news1. US accuses China of flying spy balloon over sensitive military sites The spy balloon has been spotted flying over Billings, Montana, close to several sensitive locations housing nuclear weapons, according to the Pentagon. A Chinese foreign ministry official said earlier today that the government had “noted” the reports and was “working to understand and verify the situation”. More on US-China relations: The fresh tension between the US and China comes as US secretary of state Antony Blinken prepares to travel to China this weekend, where he will Xi Jinping.2. Carlyle courts ex-Goldman veteran for top job The private equity group has spoken to former Goldman Sachs executive Harvey Schwartz about taking the vacant chief executive position, said two sources familiar with the matter. Schwartz held top roles at Goldman, including chief financial officer and chief operating officer, before he left in 2018.3. EY considers handing retired US partners cut of spin-off proceeds The Big Four accounting firm has told retired US partners it is considering giving them a cut of the proceeds from a spin-off of its consulting arm, in an email sent yesterday and seen by the Financial Times. EY’s 13,000 current partners are due to be given details of their own individual financial packages in the coming weeks and a vote on the deal is expected to start in April.4. US set to give Ukraine longer-range smart bombs The US is expected to send ground-launched small-diameter bombs that would double Ukraine’s current strike range as part of an aid package to be announced today and worth more than $2bn. However, US officials continue to rebuff Ukrainian requests for the even longer-range Army Tactical Missile System. 5. TotalEnergies says exposure to Adani stands at $3.1bn as turmoil mounts The French energy group said it carried out due diligence “consistent with best practices” when investing $3.1bn in the Indian group targeted by fraud allegations that have triggered a $100bn in stock market losses. India’s opposition Congress party has demanded a probe into the share rout and called for nationwide protests against Adani on Monday. S&P Dow Jones Indices last night removed the conglomerate’s flagship Adani Enterprises from its sustainability index.The days ahead Economic data The Bureau of Labor Statistics releases its non-farm payrolls report today and is expected to confirm the labour market lost further momentum in the first month of the year. The Institute for Supply Management releases its services purchasing managers’ index, which economists expect to show the sector swinging back to growth with a reading of 50.4.Politics President Joe Biden and vice-president Kamala Harris are scheduled to travel to Philadelphia today to discuss the economic agenda. Later, Biden and Harris will participate in a reception for the Democratic National Committee and speak at the DNC Winter Meeting.EU-Ukraine summit Ukrainian president Volodymyr Zelenskyy hosts his EU counterparts Ursula von der Leyen and Charles Michel today in Kyiv. The two sides will discuss Ukraine’s hopes for rapid entry into the bloc, as member states have raised concerns about Kyiv’s timeline. Brussels will implement another round of sanctions against Russia on Sunday, banning all seaborne imports of Russian refined oil and petroleum products.What else we’re reading What chimpanzees tell us about how we see data Project Rosling, a Swiss Confederation initiative, launched a “beat the chimpanzees” metric last week in Geneva. The idea is that while chimps make completely random choices, there is a pattern to humanity’s collective ignorance — people routinely show a more pessimistic view of the world than the one described by our statistics.
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Billionaire Disney insider becomes pivotal figure in Nelson Peltz’s proxy fight A key question hanging over Disney as it battles a challenge from activist investor Nelson Peltz concerns how many of its shares are held by one of the company’s own employees: Isaac Perlmutter. The reclusive Marvel chair became the entertainment company’s second-largest individual shareholder in 2009 when he sold Marvel to Disney and was the main backer of Peltz’s push to gain a seat on the board. Madison Square Garden owner battles outcry over ‘dystopian’ blacklisting For nearly a quarter of a century James Dolan has ruled as a capricious king over the home to his New York Knicks basketball team. But even those New Yorkers who have become hardened to his antics were shocked by recent news that he plans to use facial-recognition technology to stop lawyers working on litigation against his company from entering the arena. Sarah Germano has the story.Fed and ECB diverge While US Federal Reserve chair Jay Powell struck an optimistic note this week, European Central Bank chief Christine Lagarde was far gloomier. Speaking after the ECB increased interest rates to 2.5 per cent in the eurozone, Lagarde said price pressures remained “alive and kicking”. ‘No one remembers us’ During the pandemic, China mobilised millions of workers to enforce lockdowns, quarantines and mass testing. Once praised by President Xi Jinping for having “braved hardships and courageously persevered”, these workers have now been left jobless, disillusioned and angry by the abrupt end of China’s zero-Covid policy. Take a break from the newsRetiring at 62? The French have it absolutely right, writes Simon Kuper.
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