Bloomberg - Evening Briefing - Fat bags of cash

Proposals to rein in corporate America’s galaxy-sized profits may be easy for C-suite executives sitting on fat bags of cash to dismiss, but when the country is suffering from high inflation and politicians are blaming price-gouging, it might not be the best idea. In fact, there are plenty of warning signs out there for businesses and shareholders: Record margins are increasingly being seen as evidence of just who is squeezing middle-class families. President Joe Biden has been beating this drum for some time, having proposed a windfall tax on oil drillers in response to sky-high gas prices. But while imposing curbs on corporate profits could eventually help beleaguered consumers, it may be more bad news for stocks. “Investors should be aware,” Albert Edwards, a strategist at Societe Generale, wrote in a recent note. “Excess corporate profits or, more pejoratively, price gouging, has come into the cross-hairs.” —Margaret Sutherlin

The US House passed legislation Wednesday to block a freight rail strike that Biden warned would cripple the economy. The bill binds companies and workers to a deal reached in September (negotiated by Biden) that was rejected by workers in four of 12 unions. The House separately voted 221-207 to pass a related bill that would revise the original deal to add seven days of paid sick leave to the contract—a key sticking point. It now heads to the Senate for approval. 

While some Chinese officials may have initially struck a conciliatory tone in the face of unrest over Xi Jinping’s “Covid zero” policies, security forces have been simultaneously ramping up their crackdown on demonstrations. Online censors are removing protests from social media and police and military forces were conducting random ID checks in a renewed show of force. Meanwhile, one new forecast suggests China won’t fully reopen from pandemic restrictions until mid-2023.

Chinese police guard the site of a planned protest in Beijing on Nov. 29   Source: Bloomberg

Ukraine President Volodymyr Zelenskiy challenged Elon Musk to come see the destruction Russia’s war has wrought firsthand after the world’s richest man, parroting some Kremlin talking points, suggested Ukraine should make significant concessions to Moscow.  The European Union proposed creating a special international court to probe Russian actions in Ukraine and using frozen Russian assets to help rebuild the nation.

Chair Jerome Powell signaled the Federal Reserve will in fact slow the pace of interest-rate increases next month, as the bank and its members have repeatedly telegraphed in recent weeks. If the Fed was looking for any additional signs that its rate-hike strategy has been slowing inflation, it got one Wednesday. US job openings fell to 10.3 million in October, reversing a surprise jump in the prior month. The report suggests demand for workers, while still robust, is moderating, which in turn could help lower inflation. Here’s your markets wrap.

The Qatar World Cup could be the last sporting event of its kind. While the Gulf nation reportedly shelled out $200 billion to host the tournament, other nations and cities have become increasingly unwilling to spend a fraction of that on money-losing mega-events. Here’s a closer look at theeconomics behind big sports, and how they’re about to change. 

The Al Bayt Stadium in Qatar Photographer: Christopher Pike/Bloomberg

There were more signs of turbulence in crypto today as the exchange Kraken slashed 30% of its workforce. BlackRock’s chief Larry Fink said the fallout from FTX’s collapse would force many other crypto companies shutter in its wake. On Wednesday, FTX founder Sam Bankman-Fried denied trying to perpetrate a fraud while admitting to making errors at the helm of the company. “I made a lot of mistakes,” the 30-year-old said. 

In just a few days, Disney will find out if the $71 billion it paid for 21st Century Fox three years ago will pay off. The Avatar sequel Way of Water is likely to be one of the most expensive movies ever made. Now shareholders and analysts want to know whether the sequel top the$2.9 billion the original made.

Bloomberg continues to track the global coronavirus pandemic. Click here for daily updates.

• NATO chief: Don’t repeat with China the mistakes made with Russia. 
• There are signs of slowing inflation in the Euro-zone.
• Hakeem Jeffries makes history as first Black Congressional leader.
• DoorDash is latest tech company to cut jobs.
• One US county won’t certify election results: It could cost the GOP a seat. 
• A mountain of expensive debt is crushing consumers and businesses. 
• The French baguette is now a recognized cultural symbol.  

TikTok’s viral challenges became a mainstay during the pandemic and are now a defining part of the platform. Some are harmless enough—like dancing routines. Others are dangerous—like the “blackout challenge” where kids choke themselves until they pass out. When underage kids easily slip through restrictions and find them, the results can be tragic. So why isn’t the most downloaded app in the world doing more to protect kids?

Nine-year old girl Arrianna Arroyo died after attempting a challenge she found on TikTok. Above, her family gather in her bedroom. Photographer: David Kasnic for Bloomberg Businessweek

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