Bloomberg - Evening Briefing - Half the world votes

Half the world’s population—and GDP— are heading to the polls at some point in 2024. Elections are scheduled in some of the world’s youngest democracies, Pakistan and Tunisia, and in the oldest, like the UK. The European Union is voting. So too is Taiwan. And Indonesia. And Mexico. In Russia, President Vladimir Putin’s re-election in March is all but certain. India is expected to return Prime Minister Narendra Modi to office. But on other ballots like in Austria or the US, the outcomes remain uncertain. The results from these votes will shape public policy in every corner of the globe: what to do about climate change and the economic impact of a warming world, how to handle surging immigration, what ballooning government debt’s impact on public projects will be, and how war and rivalries are reshaping geopolitical lines. Here’s a cheat sheet for the year and the economic fallout to monitor. — Margaret Sutherlin

Iran captured an oil tanker off the coast of Oman, heightening tensions in the world’s most important trade lane for global crude supply. Only a few months earlier, the tanker’s cargo of Iranian oil was seized over US sanctions related to Tehran’s nuclear program. The incident brings Iran more directly into the shipping turmoil that’s gripped the Middle East since the start of the Israel-Hamas war. Over the past few months, a number of attacks on ships in the Red Sea, primarily by Iran-backed Houthi militants, have forced many merchant vessels to avoid the route and sail thousands of miles around Africa instead. The US and its allies are weighing options for retaliation, something Houthi leadership vowed a “big” response. 

US stocks and bonds whipsawed Thursday after the latest inflation reading came in slightly higher than expected. Consumer prices climbed 3.4% in the year through December, the most in three months, but stripping out volatile food and fuel prices underscored stubbornly high inflation is slowly coming down. For traders betting on Federal Reserve rate cuts in 2024, the reading probably takes a March cut off the table—something some Fed officials echoed. Here’s your markets wrap.

Days after part of a Boeing 737 Max 9 jet blew out midair, US aviation regulators say they’ve opened a formal investigation into the company, accelerating a crisis in confidence in the planemaker. The move by the Federal Aviation Administration heightens the stakes for Boeing, which is already facing heavy scrutiny over a series of quality issues across multiple aircraft programs. Regulators grounded 171 of the 737 Max 9 jets in operation after the fuselage on an Alaska Airlines plane blew out on Jan. 5 to allow for inspections. United Airlines, the largest operators of the model, found loose bolts on several jets during preliminary inspections. US Transportation Secretary Pete Buttigieg hinted that the Max 9 wouldn’t be rushed back into service. Boeing shares fell on the news. 

Tesla is raising worker pay at its Fremont, California plant, becoming the latest carmaker to hike wages as the United Auto Workers tries to unionize it. Fresh from winning big concessions from Stellantis, General Motors and Ford, the UAW has said it would target Tesla and other auto companies for unionization—doubling the number of workers in its ranks. Tesla’s Elon Musk has long been critical of organized labor and the UAW, but the EV maker nevertheless joined Toyota, Hyundai and Volkswagen hiking pay at US plants.

Tesla’s Fremont, California plant.  Photographer: Justin Sullivan/Getty Images North America

Gary Gensler may be crypto’s no. 1 enemy. As the chair of the US Securities and Exchange Commission, he’s often warning investors that the asset class is rife with fraud. But he made a rare capitulation when he became the determining vote in a split decision Wednesday to approve almost a dozen spot Bitcoin exchange-traded funds—a product that he and his predecessor had rejected more than 20 times. His decision, which allowed companies including BlackRock and Fidelity to launch products Thursday, didn’t seem to be one made with much conviction. Gensler used a significant portion of his statement on the approvals to discuss crypto’s lack of compliance and to stress that the decision on the ETFs didn’t mean the SEC had given the entire industry its blessing. Despite skepticism from regulators and some investors, over $3.5 billion traded in the new Bitcoin ETFs Thursday. 

In 2013, Mark Zuckerberg enthusiastically kick-started Facebook’s artificial intelligence research group. He made a splashy hire in Yann LeCun, a prominent computer scientist sometimes referred to as one of the godfathers of AI. But since then he hadn’t been closely involved in its operations, instead looking for other ways to future-proof his company. He eventually fell for the idea of the metaverse—and so fully committed his company Facebook to it that he changed its name to Meta. But as it stands, that bet looks like a colossal failure. Meta has lost about $50 billion on the effort, and it’s unclear that it’s hit on something regular people will ever want to use. This puts the company in a sensitive position as it marks its 20th anniversary in February, and now Zuckerberg is eyeing AI as the solution.

Mark Zuckerberg introduces Meta’s latest lineup of augmented reality devices in 2023.  Photographer: David Paul Morris/Bloomberg

There’s been a shake-up in the passport world. For the past five years Singapore and Japan have boasted the world’s most powerful travel documents, granting their citizens access to more countries without a prior visa than anyone else. This year France, Germany, Italy and Spain join them in a tie for the top spot. 

• Donald Trump appeared for a tense final day of his civil fraud trial.
• House Speaker Mike Johnson is struggling to contain far right factions.
• The US failed to fully track weapons sent to Ukraine, watchdog says.
• Hertz will sell 20,000 EVs in its fleet and reinvest in gas-powered cars.
• More tech layoffs are underway. This time: Google and Discord. 
• Morgan Stanley will pay $300 million to settle a US trading probe.
• The US braces for more wild weather with the return of the polar vortex. 

After selling their Atlanta home last year for $7.2 million, pop star Elton John and his husband, David Furnish, are auctioning off its contents. Christie’s New York will feature several sales of around 900 lots estimated at more than $10 million total. Expect everything from a pair of the singer’s 1970s-era silver platform boots (estimate: $5,000 to $10,000) to his 1990 Bentley two-door convertible ($25,000 to $35,000.) For the true collector, the highlights are 360 rare photographs.

Sir Elton John at the Glastonbury Festival in June 2023. Photographer: Leon Neal/Getty Images Europe

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