Bloomberg - Evening Briefing - Oil’s weird decline

Bloomberg Weekend Reading

For investors keen to see the US Federal Reserve slow the size of its interest rate hikes, this week offered some hope. The bad news is that Fed staffers for the first time weighed in on all those recession predictions, forecasting the risk at almost 50-50. More insight into the US battle with inflation could come next week, when Fed Chair Jerome Powell speaks ahead of the bank’s next pre-meeting “quiet period.”  Meantime, housing markets around the world are wobbling under the weight of central bank rate hikes, and the depth of pain in recently red-hot Canada may be a bellwether. There are more mixed signals out there, including a strange turn by oil: prices have dropped sharply in recent days despite tight supply while Europe is close to a potential price cap on Russian exports. Instead of piling on the downturn pressures, “oil prices are breaking an old recession tradition,” Conor Sen writes in Bloomberg Opinion. For now at least.

What you’ll want to read this weekend

The economic outlook in China, the world’s largest crude importer, is darkening. The country is reporting a near-record number of Covid-19 cases, spurring major cities from Beijing to Shanghai to revert to broad restrictions and mass testing. Amid its extended “Covid-zero” policy, the Chinese government signaled more monetary stimulus is possible. But dissent is becoming more readily apparent as workers at Apple’s main iPhone-making plant in China clashed with security personnel. 

A man rests near a residential unit under lockdown in Beijing. Photographer: Noel Celis/AFP

The collapse of crypto exchange FTX has prompted questions about everything from its risk management to future contagion. Founder Sam Bankman-Fried is still scheduled for a public appearance next week, his first since FTX collapsed. Meanwhile, crypto-billionaire Changpeng “CZ” Zhao outlined plans to backstop the stricken industry. Zhao said his Binance Holdings will make another bid for bankrupt lender Voyager Digital. The company is also in talks with Genesis Global, the US-based cryptocurrency broker seeking emergency funding to stay afloat.

The World Cup is off and running in Qatar, with plenty of upsets and more than enough controversy. Hundreds of Brazilian fans are ditching the national team’s prized canary yellow jersey because it’s so closely associated with outgoing President Jair Bolsonaro. But regardless of whether they’re wearing yellow or blue, anyone buying a TV from retailer Via will get cash paid straight into their bank account based on how many goals Brazil scores.

Brazil national team soccer jerseys for sale at a vendor’s stand in Rio de Janeiro. Photographer: Dado Galdieri/Bloomberg

It was a rough week for current, former and purported billionaires. Elon Musk’s losses for 2022 topped $100 billion as shares of Tesla dropped to their lowest level in two years. One-time billionaire, Theranos founder and convicted fraudster Elizabeth Holmes might land in a prison that’s “heaven” compared to most. And Donald Trump, who has long-claimed billionaire status, lost a Supreme Court bid to keep six years of tax returns from Congress. An accountant testifying in the criminal tax fraud trial of Trump’s company said the former president reported $900 million in operating losses over two years.

For anyone hoping to finally catch a Taylor Swift concert, the debacle with Ticketmaster might finally break the platform’s spell over the live event marketplace. Call it “Swiftonomics,” but her upcoming US tour has all the ingredients of a post-Covid demand shock. If you missed out, Bloomberg Pursuits has some other ideas on how to navigate the 2022 holiday shopping season.

Taylor Swift Photographer: Dimitrios Kambouris/Getty Images North America

What you’ll need to know next week

  • US jobs report ahead of the Fed’s December rate decision.
  • Eurozone inflation reading may help determine the ECB’s path.  
  • OPEC+ convenes in Vienna, weighing recessions and Russia.
  • India takes over presidency of the G20 for the next year.
  • Troubled Twitter to relaunch its blue check service—again.

How a Climate Deal Emerged From COP Chaos

The United Nations climate summit barely avoided ending in deadlock. The deal struck at the COP27 commits to creating a loss-and-damage fund that, if details can be worked out at future talks, would send aid to vulnerable countries being wrecked by global warming. But success was marred by the failure to reach agreement on cutting the use of fossil fuels or otherwise build on (unfulfilled) emissions-cutting commitments. 

Participants in a demonstration at the UN Climate Summit COP27. Photographer: Christophe Gateau/picture alliance via Getty Images

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