Bloomberg - Evening Briefing - Ukraine’s stark warning

Ukraine issued a stark warning to allies that it faces a “critical” shortage of artillery shells as Russia deploys three times as much firepower on the frontlines. And the shortage is growing worse, according to Ukrainian Defense Minister Rustem Umerov. He urged European Union allies to do more to meet their pledge of supplying a million artillery rounds. Russia’s invasion is approaching its third year as Vladimir Putin seeks to drag out a bloody conflict in which his forces have killed tens of thousands of Ukrainians. In Washington, some key Republican senators are signaling they could drop demands for harsher immigration restrictions as their price for helping Ukraine, and would back a stand-alone emergency aid package for the besieged country, along with funds for Israel and Taiwan. Far-right Republicans in the House—urged on by Donald Trump—have opposed a proposed Ukraine aid and border deal, even one including significant concessions recently offered up by US President Joe Biden.  —Margaret Sutherlin

The US Federal Reserve held rates steady for a fourth straight meeting while signaling its openness to cutting them—though not necessarily right away. The committee said it was still waiting for inflation to fall closer to the Fed’s 2% target. The move was widely expected as economists and investors look to see if the higher-for-longer rates slow inflation further. Markets dropped on a big-tech selloff and bond yields plunged. Regional lenders were lower after NY Community Bancorp—one of the winners as regional lenders collapsed last year—plunged a record 46% as investors worried about the next big threat: commercial real estate. Here’s your markets wrap. 

After a Delaware judge struck down Elon Musk’s $55 billion Tesla pay package, questions still loom about what it means for the company. The 2018 package was meant to “motivate and incentivize” an already super-rich Musk at a time when some wondered whether he was devoting enough time to Tesla. Others speculated back then whether he might depart the company or hire a CEO to replace him. This new drama is yet another overhang for Tesla’s already-slumping share price, complicates a separate effort by Musk to secure another huge pay package and may have broader implications. 

Iran signaled it’s prepared to respond to any US strike on its soil or assets abroad as the White House readies a response to a drone attack that killed three American soldiers. Biden has already said he’s decided how he will retaliate for the assault in Jordan, which the US said was carried out by Iran-backed groups with Iran-provided weaponry. Tit-for-tat strikes could accelerate and expand a conflict that has already spread from Gaza to Lebanon, Yemen, the Red Sea and elsewhere. Meanwhile Hamas and Israel negotiators continue to hammer out terms of a possible ceasefire and hostage release deal. 

President Joe Biden said he has decided how the US will retaliate for a deadly attack on a military outpost in Jordan. Photographer: Ting Shen/Bloomberg

China is embarking on the biggest consolidation of its banking industry by merging hundreds of rural lenders into regional giants amid growing signs of financial stress. After engineering mergers of rural cooperatives and rural commercial banks in at least seven provinces since 2022, policymakers look to tackle risks in the $6.7 trillion sector this year. That means another wave of consolidation is on the way across the nation. “It’s where risks are the most concentrated among smaller financial institutions, so China is pushing the reform at a faster pace,” said Liu Xiaochun, deputy director of think-tank Shanghai Finance Institute.

US lawmakers chewed out executives from Meta, X, Snap, Discord and TikTok over the companies' child safety records on Wednesday, marking the first time Congress brought in the executives to discuss online child safety as part of a broader legislative effort. Congress has been under growing pressure to pass the Kids Online Safety Act, which would create legal requirements for tech companies to keep children safe from content that promotes violence, sexual exploitation, substance abuse and eating disorders. At the hearing, Meta Chief Executive Officer Mark Zuckerberg turned and faced an audience filled with activists to apologize. 

Mark Zuckerberg addresses the audience during a Senate Judiciary Committee hearing. Photographer: Kent Nishimura/Bloomberg

Customers and creditors of bankrupt crypto exchange FTX who can prove their losses will likely get back all their money, the company told a judge overseeing its insolvency. Restructuring advisers will nevertheless need to examine the millions of claims that have been filed against FTX to weed out those that aren’t legitimate, lawyer Andrew Dietderich said during a hearing in Wilmington, Delaware.

What really matters anyway? That’s what Nia Holland, 24, thought after spending $2,500 on a vintage Chanel bag, draining her savings. Earning little money with campus research jobs during graduate school, she knew her cash could be better spent, saved or invested. But at the same time, she said it didn’t feel irresponsible. With traditional milestones like homeownership and a life with kids so far out of reach, denying herself “little luxuries” wasn’t going to make a difference. And if anything, the lambskin tote with a 24-carat chain made her feel better. Welcome to the era of doom spending.

Nia Holland Photographer: Nic Antaya/Bloomberg

• “We caused the problem.” Boeing CEO acknowledges safety lapse.
• California is bracing for flooding from two atmospheric rivers.
• Judge dismisses Disney suit against Florida Governor Ron DeSantis.
• Pimco says private credit cracks are showing and it’s ready to pounce.
• Media mogul Byron Allen wants to buy Paramount for $14 billion. 
• Pretty soon computers will be picking out what you wear every day. 
• A record 144 million travelers passed through NYC airports in 2023.

Big pharma has embraced artificial intelligence to help speed up the development of new medicines. Earlier this month, Genentech started recruiting 200 patients to test whether one of its experimental drugs can tame ulcerative colitis—a painful, incurable type of inflammatory bowel disease. Until then, the compound had only been given during experiments to treat lung and skin disorders, but AI signaled the compound might work for other diseases. 

Illustration: Aaron Fernandez for Bloomberg Businessweek 

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