Economy

Gross domestic product rose at a 2.9% annualized pace in the fourth quarter, slightly better than expected.
Consumer spending weakened from the previous period but remained positive.
A sharp slide in housing helped pull down GDP, while boosts in government spending and private investment aided growth.
Jobless claims fell last week while durable goods orders increased sharply in December, but mainly due to demand for aircraft.

The U.S. economy finished 2022 in solid shape even as questions persist over whether growth will turn negative in the year ahead.
Fourth-quarter gross domestic product, the sum of all goods and services produced for the October-to-December period, rose at a 2.9% annualized pace, the Commerce Department reported Thursday. Economists surveyed by Dow Jones had expected a reading of 2.8%.

The growth rate was slightly slower than the 3.2% pace in the third quarter.

Stocks turned mixed following the report while Treasury yields were mostly higher.
Consumer spending, which accounts for about 68% of GDP, increased 2.1% for the period, down slightly from 2.3% in the previous period but still positive.
Inflation readings moved considerably lower to end the year after hitting 41-year highs in the summer. The personal consumption expenditures price index increased 3.2%, in line with expectations but down sharply from 4.8% in the third quarter. Excluding food and energy, the chain-weighted index rose 3.9%, down from 4.7%.
While the inflation numbers indicated price increases are receding, they remain well above the Federal Reserve’s 2% target.

Along with the boost from consumers, increases in private inventory investment, government spending and nonresidential fixed investment helped lift the GDP number.
A 26.7% plunge in residential fixed investment, reflecting a sharp slide in housing, served as a drag on the growth number, as did a 1.3% decline in exports. The housing drop subtracted about 1.3 percentage points from the headline GDP number.
Federal government spending rose 6.2%, due largely to an 11.2% surge on nondefense outlays, while state and local expenditures were up 2.3%. Government spending in total added 0.64 percentage points to GDP.
Inventory increases also played a significant role, adding nearly 1.5 percentage points.
“The mix of growth was discouraging, and the monthly data suggest the economy lost momentum as the fourth quarter went on,” wrote Andrew Hunter, senior U.S. economist for Capital Economics. “We still expect the lagged impact of the surge in interest rates to push the economy into a mild recession in the first half of this year.”

The report caps off a volatile year for the economy.
Following a 2021 that saw GDP rise at its strongest pace since 1984, the first two quarters of 2022 started off with negative growth, matching a commonly held definition of a recession. However, a resilient consumer and strong labor market helped growth turn positive in the final two quarters and gave hope for 2023.
“Just as the economy wasn’t as weak in the first half of 2022 as GDP reports suggested, it’s also not as strong as the Q4 GDP release would indicate,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors. “Held aloft by resilient consumer spending, the economy expanded at a solid pace late last year, but remains vulnerable to a more pronounced slowdown in the coming quarters.”
A separate economic report Thursday highlighted a strong, tight labor market. Weekly jobless claims fell by 6,000, down to 186,000 for the lowest reading since April 2022 and well below the 205,000 Dow Jones estimate.
Orders for long-lasting goods also were much better than expected, rising 5.6% for December, compared with the 2.4% estimate. However, orders fell 0.1% when excluding transportation as demand for Boeing passenger planes helped drive the headline number.
Despite the fairly strong economic data, most economists think a recession is a strong possibility this year.
A series of aggressive Fed interest rate increases aimed at taming runaway inflation are expected to come to roost this year. The Fed raised its benchmark borrowing rate by 4.25 percentage points since March 2022 to its highest rate since late 2007. Rate hikes generally operate on lags, meaning their real effect may not be felt until the time ahead.
Markets see a near certainty that the Fed is going enact another quarter percentage point increase at its meeting next week and likely follow that up with one more similar-sized hike in March.
Some sectors of the economy have shown signs of recession even though overall growth has been positive. Housing in particular has been a laggard, with building permits down 30% in December from a year ago and starts down 22%.
Corporate profit reports from the fourth quarter also are signaling a potential earnings recession. With nearly 20% of the S&P 500 companies reporting, earnings are tracking at a loss of 3%, even with revenue growing 4.1%, according to Refinitiv.
Consumer spending also is showing signs of weakening, with retail sales down 1.1% in December.

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SYDNEY/SINGAPORE (Reuters) – China’s reopened borders and renewed focus on boosting the sagging economy have brightened the deals outlook, with bankers starting to field interest for mergers, acquisitions and fundraising involving the world’s second-largest economy.The prospect of a revival in deals comes as Chinese policymakers try to restore private-sector confidence and growth, which has been ravaged by the COVID-19 pandemic and a sweeping regulatory crackdown.Although consumer, retail and travel-related firms are expected to bounce back after an almost three-year lockdown, advisers say sectors linked to strengthening China’s economic prospects will be at the centre of dealmaking this year.”We see strategic sectors, hardcore industrial technology, automation, semiconductor-related to be a focus for outbound activity,” said Mark Webster, partner and head of Singapore at BDA Partners, an Asia-focused investment banking adviser.”Healthcare opportunities are proving of interest, both domestically and outbound, including in Southeast Asia,” he added. “Geographically, Indonesia in particular is attracting a lot of attention.”Australia has also already emerged on China’s radar amid hopes of a diplomatic thaw between the two countries. In one such deal, Tianqi Lithium and IGO’s joint venture are bidding for lithium miner Essential Metals.Outbound M&A involving companies in China halved last year to the lowest point since 2006, Refinitiv data showed, which pulled total Chinese company-led dealmaking to its lowest point in nine years.     Chinese companies’ capital markets deals slipped 44% in the same period, according to Refinitiv data. That slump crimped the fees earned by Wall Street banks and forced some of them to cut jobs, mainly those linked to Chinese deals, in the past few months.”We have had a lot more requests for proposals from companies in the past two to three weeks,” said Li He, a capital markets partner at law firm Davis Polk who travelled to Beijing to meet clients the day after China’s border reopened on Jan. 8.”That is not just because of travel but people think that a reopening is good for the economy, good for capital markets and good for deal execution,” He said.The reopening coincided with a thaw in regulatory scrutiny that had seen overseas Chinese IPOs grind to a halt in the past 18 months amid proposed rule changes, and the tech sector struggle with a range of new regulations.Until the border reopened, travel from Hong Kong into mainland China had been tightly restricted for about three years – a sharp change for advisers for whom weekly trips to China had been common. Opened borders could lead to a pick up in deals involving private equity funds later in 2023 as firms head to China to find buyers for their assets, according to Bagrin Angelov, head of China cross-border M&A at Chinese investment bank CICC.Chinese private equity activity was worth $24.1 billion in 2022, down from $57.8 billion a year before, Pitchbook data showed.”Six months or one year before the deal, private equity firms would already start meeting potential buyers to try to warm up the interest and try to understand who could be interested,” Beijing-based Angelov said.”For them certainty is very important, and they really need to meet buyers very early on,” he continued. “Because of opening up, we expect an uptick in overseas disposal of private equity to Chinese buyers.” More

There is never a good moment for the US government to hit its ceiling for debt issuance — and spark speculation about a potential looming default if Congress refuses to raise it. Now, however, is particularly inopportune timing for this fight. That is partly because big foreign buyers have quietly trimmed their Treasury purchases in the last year, and this might accelerate if chatter about a possible default grows louder. It is also because liquidity has repeatedly vanished from the Treasuries sector at times of stress in recent years, because of underlying vulnerabilities in the market structure. This could easily reoccur in a debt-ceiling shock, since these structural problems remain (lamentably) unaddressed.But the biggest reason to worry about the timing is that the financial system is at a crucial stage in the monetary cycle. After 15 years of accommodative monetary policy, during which the US Federal Reserve expanded its balance sheet from $1tn to $9tn, the central bank is now trying to suck liquidity out of the system, to the tune of about $1tn a year.This process is necessary, and long overdue. But it was always going to be difficult and dangerous. And if Congress spends the coming months convulsed by threats of default — since the Treasury’s ability to fund itself apparently runs out in June — the risks of a market shock will soar.A recent report from the American lobby group Better Markets outlines the wider backdrop well. This entity first shot to fame during the 2008 global financial crisis when it became a thorn in the side of Wall Street and Washington regulators because it complained loudly — and correctly — about the follies of excessive financial deregulation. Since then, it has continued to scrutinise the more recondite details of US regulation, complaining, again rightly, that the rules have recently been watered down.However, in a striking sign of the times, it now has another target in its sights: the Fed. Most notably, it thinks that the biggest danger to financial stability is not just the finer details of regulation, but post-crisis loose monetary policy. This left investors “strongly incentivised, if not forced, into [purchases of] riskier assets”, it “decoupled asset prices from risk and ignited a historic borrowing and debt binge”, the Better Markets report argues. Thus, between 2008 and 2019 the amount of US debt held by the public rose 500 per cent, non-financial corporate debt increased 90 per cent and consumer credit, excluding mortgages, jumped 30 per cent.Then, when the Fed doubled its balance sheet in 2020 in the midst of the pandemic, these categories of debt rose by another 30, 15 and 10 per cent respectively. And the consequence of this exploding leverage is that the system is today highly vulnerable to shocks as interest rates rise and liquidity declines — even before you factor in a debt-ceiling row.“The Fed is in many ways fighting problems of its own creation. And considering the scale of the problems, it is very difficult to solve without some damage,” the report thunders. “Although the Fed monitors and seeks to address risks to financial stability and the banking system, it simply failed to see — or didn’t look or consider — itself as a potential source of those risks.”Fed officials themselves would dispute this, since they believe that their loose monetary policies prevented an economic depression. They might also note that rising debt is not just an American problem. One of the most stunning and oft-ignored features of the post-crisis world is that global debt as a proportion of gross domestic product jumped from 195 to 257 per cent, between 2007 and 2020 (and from about 170 per cent in 2000.)Moreover, Fed officials would also point out, correctly, that the central bank is not a direct cause of the debt-ceiling fight. The blame here lies with political dysfunction in Congress and an insane set of Treasury borrowing rules. But even granting those caveats, I agree with the core message from Better Markets, namely that the central bank could and should have been far more proactive in acknowledging (and tackling) the risks of its post-crisis policies, not least because this now leaves the Fed — and investors — in a nasty hole.In an ideal world, the least bad exit from the debacle would be for Congress to abolish the debt-ceiling rules and create a bipartisan plan to get borrowing under control; and for the Fed publicly to acknowledge that it was a mistake to keep money so cheap for so long, and thus normalise ever-rising levels of leverage.Maybe that will occur. Last week senator Joe Manchin floated some ideas about social security reform, suggesting that there might be a path to a bipartisan deal to avoid default. But if this does not emerge, the coming months will deliver rising market stress, and/or a scenario in which the Fed is forced to step in and buy Treasuries itself — yet again.Investors and politicians would undoubtedly prefer the latter option. Indeed, many probably assume it will occur. But that would again raise the threat of moral hazard and create even more trouble for the long term. Either way, there are no easy solutions. America’s monetary chickens are coming home to [email protected]   More

Companies that ramped up hiring in areas like technology over the past few years are cutting back as customers slow their spending.The retail industry is trying to figure out its correct size.Retailers, faced with sky-high demand from shoppers during the pandemic, spent the past three years ramping up their operations in areas like human resources, finance and technology. Now, times have changed.A public that rushed to buy all sorts of goods in the earlier parts of the pandemic is now spending less on merchandise like furniture and clothing. E-commerce, which boomed during lockdowns, has fallen from those heights. And with consumers worried about inflation in the prices of day-to-day necessities like food, companies are playing defense.Saks Off 5th, the off-price retailer owned by Hudson Bay, laid off an unspecified number of workers on Tuesday. Saks.com is laying off about 100 employees, or 3.5 percent of its workers. Stitch Fix laid off 20 percent of its salaried workers this month and closed a distribution center in Salt Lake City. Last week, Wayfair said it would lay off 1,750 people, or 10 percent of its work force, and Amazon started laying off 18,000 workers, many of them in its retail division. Bed Bath & Beyond cut its work force this month as it tries to shore up its finances and prepares for a possible bankruptcy filing.While it’s not unusual for major retailers to announce store closings and some job cuts after the blitz of the holiday season, the recent spate of layoffs is more about structural changes as the industry recalibrates itself after the rapid growth from pandemic-fueled shopping. And it accompanies broader worries about the state of the U.S. economy and layoffs by prominent tech companies.“Retailers are really being cognizant of capital preservation,” said Catherine Lepard, who leads the global retail market for the executive search firm Heidrick & Struggles. “They don’t know how long this cooler economy is going to last, and they want to make sure they have the right cash to get through that. For retailers that are struggling, it really means tightening the belt with some cost cutting.”Sales during the all-important holiday shopping season were weaker than in years past, when growth hit record levels. December retail sales increased 6 percent from the same period last year, but that number was not adjusted for inflation, which was at 6.5 percent.Department stores posted sizable sales declines. At Nordstrom, sales in the last nine weeks of 2022 decreased 3.5 percent from a year earlier, with the company noting that they “were softer than prepandemic levels.” Macy’s said its holiday sales had been on the lower end of its expectations.Macy’s holiday sales were on the lower end of expectations, the company said. Mathias Wasik for The New York TimesThe layoffs at certain retail companies are a sign that the industry is bracing for a slowdown and another change in how people shop.“To mitigate macroeconomic headwinds and best position our business for success, we have made changes to streamline our organizational structure,” Meghan Biango, a spokesperson for Saks Off 5th, said in a statement. “As part of this, we made the difficult decision to part ways with associates across various areas of the business.” The layoffs affected divisions such as talent acquisition and supply chain.The State of Jobs in the United StatesEconomists have been surprised by recent strength in the labor market, as the Federal Reserve tries to engineer a slowdown and tame inflation.Walmart: The retail giant is significantly raising its starting wages for store workers, as it battles to recruit and retain workers in a tight retail labor market.Tech Layoffs: The industry’s recent job cuts have been an awakening for a generation of workers who have never experienced a cyclical crash.Infrastructure Money: Government spending on initiatives intended to combat climate change and rebuild infrastructure are expected to land this year. The effects on the labor market will be deep but hard to measure.Restaurant Workers: Mandatory $15 food-safety classes are turning cooks, waiters and bartenders into unwitting funders of a lobbying campaign against minimum wage increases.Not all retailers are in a defensive crouch. For instance, Walmart announced this week that it was raising the minimum wage for its store employees in a bid to attract and retain workers in a tight labor market.Still, some retailers are becoming focused less on bringing in new customers — an expensive undertaking — and more on retaining those they gained during the pandemic.“There’s a sense of conservatism,” said Brian Walker, chief strategy officer at Bloomreach, which works with retailers on their e-commerce and digital marketing businesses. “They’re still adjusting in many ways to this omnichannel retail environment and are probably seeing this as an important time to calibrate their organizations and make sure they have the right people, and not too many of them to be pragmatic and weather a potential storm.”That means fewer projects that require lots of money and time and more investments where a company can start seeing results quickly, Mr. Walker said.Ms. Lepard agreed. “This isn’t the economy to really get creative and take on high risk,” she said. “There might be a pulling back of some of that innovation in future investment to make sure they’re pacing themselves.”It’s also a moment for retailers to assess what e-commerce abilities they need. In the early months of the pandemic, online sales exploded as many brick-and-mortar stores went dark. That growth has slowed. E-commerce traffic in North America declined 1.6 percent in the third quarter of 2022 compared with a year earlier, according to Bloomreach’s Commerce Pulse data. Conversion rates — the measure of someone’s buying an item after seeing it advertised — dropped 12 percent during the same period.“This is where people overshot the runway,” said Craig Johnson, president of the retail advisory firm Customer Growth Partners, who has tracked the industry for 25 years. “This works like a ratchet. It might go up to 27 percent, but that’s going to normalize,” he added, referring to the share of total e-commerce spending for the first year of the pandemic, when many stores were grappling with Covid restrictions and closures.When online spending was rising, many companies pushed to fill roles that could help them meet the demand. Now they have to adjust to a new reality.“Unfortunately, along the way, we overcomplicated things, lost sight of some of our fundamentals and simply grew too big,” Niraj Shah, Wayfair’s chief executive, said in a note to employees last Friday. His company, which reported in November that its net revenue was down 9 percent from a year earlier, is looking to save $1.4 billion.Demand for luxury goods is still there, but those retailers say they need to restructure to continue to innovate.Mathias Wasik for The New York TimesIn the luxury sector, the shopper demand is still there, but a restructuring is needed to continue to innovate. As part of its layoffs, Saks.com also separated its technology and operations teams.“We are at a point in our trajectory as a digital luxury pure-play where we need to optimize our business to ensure we are best positioned for the future,” Nicole Schoenberg, a Saks spokeswoman, said in a statement. “These changes are never easy, but they are necessary for our go-forward success.”While reducing head count might help save costs in the short term, retailers will have trouble in the future if they do not also address how to improve the customer experience online, said Liza Amlani, founder of Retail Strategy Group, which works with brands on their merchandising and planning strategies.“With Wayfair, and as with many digital players, what we’ve seen in the last three years is that they scaled and grew too quickly,” Ms. Amlani said. “They banked on an influx of spending across digital. They didn’t invest where they needed to invest.”The retail layoffs are an about-face from 2021, when companies couldn’t hire frontline workers fast enough. After the initial jolt of the pandemic, which led many retailers to furlough or outright fire workers, many people received stimulus checks from the government. They wanted to spend that money, and when companies needed to ramp up in-store services again, they often struggled to find enough workers.Recalling that difficulty might give some retailers pause before they lay off workers this time, Mr. Walker said. If a steep downturn never comes, or if there’s a sudden rebound in demand, companies don’t want to be stuck without enough employees.But the next few months could be rough for retailers, as profit margins shrink and revenue growth slows from what it was the past couple of years. In that kind of environment, investors generally like to see large companies take steps to cut costs. And once layoffs begin, a kind of industry groupthink can set in.“Once a couple of companies start to do it,” said Peter Cappelli, a professor at the University of Pennsylvania’s Wharton School who researches management and human resources, “then it creates some momentum where then you’ve got to explain why you’re not doing what everybody else is doing.” More

UK productivity in the third quarter of 2022 was barely higher than in the year before the Covid-19 pandemic began, according to official data that will add to gloom over the country’s economic outlook. Output per hour worked — the key measure of labour productivity — was 1.6 per cent higher in the three months to September than its average over the course of 2019, and up by just 0.1 per cent during the last quarter, the Office for National Statistics said on Thursday. Output per worker was 0.5 per cent higher than the 2019 average.This means that despite big changes to working practices sparked by coronavirus lockdowns, there has been no change in the snail’s pace growth seen in UK productivity since the global financial crisis.This stagnation is seen as one of the biggest challenges facing the UK economy, because rising productivity — workers producing more for a given level of inputs — is a crucial underpinning if wages and living standards are to rise without stoking higher inflation.The ONS figures showed that the biggest drag on productivity across the economy came from public services, where output per hour worked remained 7.4 per cent below its pre-coronavirus level.This is likely to reflect the crisis engulfing the NHS, where a big increase in funding and staffing since the pre-pandemic period has not led to a corresponding increase in the number of patients treated.The latest figures will inform the next official forecast from the Office for Budget Responsibility, the fiscal watchdog, which in October took a more optimistic view than other forecasters of the UK’s likely productivity performance. The OBR has already told the Treasury that when it publishes its next forecast, alongside the March Budget, it expects to cut its prediction for UK gross domestic product in 2027-28 by about 0.5 per cent compared with last year’s Autumn Statement.

The poor productivity growth is one of the key reasons why UK average incomes have fallen behind those of many other rich economies in recent years.Earlier this month, the ONS published figures comparing productivity performance across the G7 which showed output per worker, a more reliable cross-country measure than output per hour worked, was higher in every other country (barring Japan, for which there were no figures) in 2021 than in the UK. In the US, it was almost 50 per cent higher and the UK lagged the G7 average by 16 per cent. More

STOCKHOLM (Reuters) -Swedish industrials group Atlas (NYSE:ATCO) Copco reported softer-than-expected fourth-quarter profits on Thursday and said demand was expected to remain around the current level, sending its share price down nearly 5%.Persistent supply chain challenges and higher costs have weighed on the maker of compressors, vacuum pumps and industrial tools in recent quarters. Its customers are also scaling back investments, especially within its key vacuum division which counts the major semiconductor producers as its main clients. Adjusted operating profit for Sweden’s most valuable listed company rose to 8.03 billion crowns ($782.9 million) from 6.46 billion a year earlier, while analysts polled by Refinitiv on average had expected earnings of 8.56 billion. In the fourth quarter, order intake at its vacuum business fell 22% to 8.48 billion crowns, once again denting results. On an organic basis, or like-for-like, orders at the vacuum division fell 33%, while for the group as a whole they declined 7%.Pareto Securities analyst Anders Roslund said the weaker result was entirely due to the drastic fall in orders and supply chain distortions in its vacuum division. The company’s vacuum gear business, which competes with the likes of Pfeiffer Vacuum, is an important indicator for Atlas as it typically offers a forward-looking gauge of demand for the broader group.Atlas stock was down 3% at 1236 GMT, off earlier lows.JPMorgan (NYSE:JPM) said the poor order intake for the vacuum division was expected.”The negative surprise for us is on the margin, a very un-Atlas like miss,” the broker said. Atlas as a group delivered an operating margin of 19.5% compared with 18% at its vacuum division.The company plans to pay an ordinary dividend of 2.30 crowns per share, sharply down from 7.60 crowns paid last year, but roughly matching analysts’ average expectation for 2.28 crowns.($1 = 10.2568 Swedish crowns) More

TORONTO (Reuters) – After the Bank of Canada posted its first ever quarterly loss, the federal government plans to introduce legislation enabling the central bank to retain profits rather than remit them to the government, BoC Governor Tiff Macklem said.The new legislation would give the Canadian central bank the means to restore positive equity on its balance sheet.The BoC’s balance sheet is likely to slip into negative equity in the coming years, a position in which liabilities exceed assets, as it pays out a higher interest rate on settlement balances than it earns on the government bonds it bought to support the economy during the COVID-19 crisis.Settlement balances, which stood at about C$200 billion ($149 billion) in December, are deposits at the central bank held by financial institutions. The rate on those deposits has climbed in lockstep with the BoC’s benchmark interest rate, which is up 425 basis points since March.Several other major central banks that expanded their balance sheets, such as the Federal Reserve, also face negative equity issues. “The Minister of Finance has recently communicated to me that the government intends to introduce legislative amendments that will allow the bank to retain earnings to offset losses,” Macklem said in a news conference on Wednesday following the central bank’s decision to raise interest rates by a quarter of a percentage point, adding that the losses have no impact on monetary policy.”Once positive equity is restored, we would resume our normal remittances to the Government of Canada,” Macklem said.Unlike a commercial bank, a central bank issues currency as well as settlement balances, so there is no indication that a move into negative equity would be a threat to the BoC’s solvency.The central bank reported a net loss of C$511 million in the third quarter of 2022, while its equity stood at C$954 million. The C.D. Howe Institute, a Canadian think tank, estimates cumulative losses of between C$3.6 billion and C$8.8 billion over the next two to three years.Canada’s central bank typically earns more income on its assets than it pays on its liabilities and then remits its net income to the government. In 2021, its remittance was C$2.7 billion.Before the pandemic, the Bank of Canada’s liabilities consisted largely of banknotes in circulation, on which it pays no interest, but settlement balances have since surged to finance the balance sheet expansion.Last April, the central bank began the process of shrinking the size of its balance sheet, a move known as quantitative tightening.($1 = 1.3387 Canadian dollars) More

Mobile phone operators once successfully instilled the fear of missing out into their customers, encouraging the replacement of smartphones for the latest models every two years. Network phone subsidies helped keep shipments and earnings at global phonemakers strong. Industry data for past year suggests that is ending.Global smartphone shipments dropped 18.3 per cent — the most on record — to about 300mn units in the December quarter, according to research group IDC. For the year shipments fell 11.3 per cent, the lowest total for a decade.Blame temporary disruptions resulting from year-end violent protests over Covid-19 restrictions at Apple’s main iPhone factory in China. Price inflation and slowing global economic growth too affected holiday shopping. Buyers increasingly seek cheaper, older models. But there is good reason to believe that the poor shipment figures are part of a longer lasting trend. Seven years ago, two-thirds of US consumers replaced their smartphones in two years or less. That gap has widened to about three years owing to more durable materials and increased software updates. Pricier Apple and Samsung flagship models have created a robust market for second-hand phones. Longer ownership offers green perks. Consider that 80 per cent of a smartphone’s carbon footprint is created during manufacture. About 5bn mobile phones are thrown away each year. Not all parts can be recycled and some can release toxic chemicals.All this is bad news for the companies. The iPhone is Apple’s most important product, accounting for about half of overall revenue. Samsung Electronics earned more than 40 per cent from its mobile business in the third quarter 2022. Shares of both companies are down a tenth in the past year, reflecting waning demand. There will be knock-on effects on a larger range of sectors. The duo are the main clients for component makers (flash memory through displays) in Japan, Vietnam, China and South Korea. Less consumer Fomo means more oh-no for the entire smartphone industry. More