No longer a working class Hero

Good morning! Or not. In laying off nearly 50% of its workforce, Elon Musk’s Twitter threw a spanner in the lives of several American (work) visa holders. The Economic Times reports that ~670 or about ~8% of the company’s workforce have H-1B visas, meaning they either have to race against time—60 days—to find another job that will sponsor them, or leave the US. Those on O-1 and L-1 visas don’t even have that luxury, and neither do those who aren’t in the second stage of their green-card applications. Yet more collateral damage by a billionaire who took on colossal debt to buy a company he overpaid for.

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The Market Signal*

Stocks: Earnings will continue to be in focus in the US as the Federal Reserve’s stand on inflation has already been priced in. Markets are resigned to higher interest rates well into 2023. Deals and IPOs have become a trickle on a Wall Street starved of capital as money becomes expensive, The Wall Street Journal reports. A Financial Times report said US oil companies made over $200 billion in profits since the Ukraine war began. 

Indian equity indices ended the past week in the green. Markets will await cues in industrial output and inflation numbers in the coming week. 

Early Asia: The SGX Nifty (+0.54%) perched higher at 7.30 am India time. The Hang Seng Index  (+1.95%) and Nikkei 225 (+1.14%) also gained ground.

CONSUMPTION

Hero Worships The Upper Crust

India’s largest two-wheeler manufacturer is looking to go premium, with a little help from Harley Davidson. Hero is partnering with the American company for a motorcycle platform that will launch a premium model every year to counter rivals Bajaj Auto, Royal Enfield, and TVS Motor Co., which are also gunning for the upper-crust segment.

Context: The entry-level motorcycle market, the bread and butter for Hero, is still struggling to match pre-pandemic levels. Hero’s consolidated net profit dipped by 9% to ₹682 crore ($83.2 million) in the last quarter because of weak demand from India’s hinterland. The company is also vying for the electric two-wheeler space to consolidate its market share. FWIW, the festive season may have offered some relief. 

Bottomline: Affordability is no more a priority as manufacturers deal with rising input costs and expensive vehicle loans—a setback for two-wheeler sales. Who stands to lose? The middle class.

TECH

Wither The Premium Apple Experience?

Apple, which is doubling down on advertising despite positioning itself as a privacy-first tech company, is building an ad network in the run-up to airing live Major League Soccer (MLS) games next year. In a page straight out of the streaming playbooks of Netflix and Disney+, Apple may also introduce an ad-supported version of Apple TV+.

So?: Apple’s App Tracking Transparency (ATT) upgrade last year was a blow not only to Big Tech but also developers, whose switch from ad-supported models to in-app payments meant they’d end up paying a <30% cut to Apple. The irony of Apple now wanting to jack up its $4 billion-a-year ad revenues to double digits isn’t lost on anybody. In August, Bloomberg’s Mark Gurman reported that Apple itself will mine some user data to run more ads across its ecosystem. Little wonder its ad push is inviting antitrust scrutiny.

GLOBAL AGENDA

Breakthrough in Egypt, Turbulence Expected in US

Two events—the UN climate change conference, COP27, in Egypt and the midterm elections in the US—could influence global economic and political trends for a while. COP27’s impact on the world economy could be long term but the immediate effect of US elections is likely to be on the war in Ukraine and global markets. 

News from Sharm el-Sheikh is encouraging. 

COP27: The contentious issue on the table was evolving a mechanism to account for historical emissions. The meeting has started with an agreement on including “loss and damage” in talks, a battleground issue for rich and poor nations.  

Midterms: The Republican Party is said to have an edge over Democrats in the elections. NBC’s Election Book (pdf) is an excellent resource for everything related to the elections.

🎧 UN climate summit begins on a promising note. The Signal Daily is available on Spotify, Apple Podcasts, Amazon Music, and Google Podcasts, or wherever you listen to your podcasts.

CRYPTOCURRENCIES

Lobby Like Your Life Depends On It

That’s the mantra for a sector suffering an existential crisis. According to research group OpenSecrets, crypto companies pumped $73 million into the 2022 US midterm elections, $15 million of which was spent until September—more than in the last eight years combined. The amped-up lobbying comes at a time of escalating scrutiny against blockchain-everything, especially by the US Securities and Exchange Commission.

Buttering both sides: The likes of Coinbase, FTX, and industry group GMI PAC are banking on voter outreach and funding both Democrat and Republican representatives in the hope that exemptions and oversight will work in their favour regardless of who wins. One of the key bills in question is the Digital Commodities Consumer Protection Act.

Aside: Bitcoin-mining companies are offloading their hardware to make ends meet, with some rigs selling at 77% lower rates than in 2021.

🎧 The Lebanese are turning to crypto as the country battles an economic crisis. The Signal Daily is available on Spotify, Apple Podcasts, Amazon Music, and Google Podcasts, or wherever you listen to your podcasts.

ENTERTAINMENT

Prime Video Isn’t Putting A Ring On It

Amazon’s The Rings Of Power (TROP) made a splash even before it streamed, for being the most expensive television show ever. But who's watching the Prime Video exclusive? 

Muddled: Amazon has a vague answer. As per Nielsen, TROP’s audience shrank every week. Then again, Nielsen metrics only include US viewers. Streaming viewership is counted in terms of minutes, and doesn’t measure mobile and laptop streaming. Amazon better keep its fingers crossed about TROP’s success: it’s supposed to run for five seasons. 

Safety net: Warner Bros. Discovery CEO David Zaslav wants more franchises for Superman, Batman, and Harry Potter. Psst: Westworld is the latest to face the axe after Batgirl and other TV shows.

Hollywood Quest: The Meta Quest Pro may have takers in Hollywood. Former Nickelodeon executive Chris Young predicts it could soon be a part of virtual production once the tools are in place.

FYI

In the cart: Billionaire Mukesh Ambani’s Reliance Industries is close to a deal to buy METRO Cash and Carry’s India business for $500 million.

No sugar please: India has reduced its sugar export quota for 2022-23, which will further hit global supply that has already been impacted by excessive rains and delays in sugarcane crushing in top exporter Brazil. 

Shot supply: Nearly 50 million doses of Bharat Biotech's Covid-19 vaccine Covaxin are set to expire in early 2023 due to ​​lack of demand. 

In and out: Even as new owner Elon Musk started slashing Twitter’s 7,500-strong workforce, it is asking some of its employees to rejoin the team.

Shut shop: The Indian government may shelve 116 crucial infrastructure projects worth ₹1.26 lakh crore ($15.4 billion) due to decades of land acquisition problems, bureaucratic red tape, and Centre-state tussles. 

Pink slips?: First Twitter, now Meta. The company may start its round of layoffs this week, according to the Wall Street Journal.

THE DAILY DIGIT

₹2.26 lakh crore

Or $27.6 billion, the value of assets declared by the Tirumala Tirupati Devasthanams temple trust.  (Livemint)

FWIW

Too little, too late: West Ham player Kurt Zouma has apologised for abusing a cat—an act that earned him the wrath of animal lovers. Since then, he was slapped with 180 hours of unpaid community work and banned from owning cats for five years. Not like this will fix him, but it seems like some solace. 

Horror story: In today's edition of climate change is real, 1,200 residents of Gardi Sugdub island in Panama will have to leave their homes permanently. The government has decided to move them to the mainland since the island is expected to disappear in the coming decades because of rising sea water levels. Experts say the surrounding islands too may go underwater by 2050, forcing inhabitants to move eventually. Yikes.

Coffee saves lives: In this instance, yes. Two South Korean miners, aged 62 and 56, have a latte to thank coffee for. The duo survived nine days underground on a diet of instant coffee mix powder, and water that fell through from the ceiling of a blocked shaft. Coffee never needed any glowing recommendations, but the cause for the drink just got stronger. 

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