Market Munch 🍪| July 22 2022
ECB puts it's foot down to nip inflation in the bud, Amazon goes heavy into healthcare, and Italy's parliament goes up in smoke. 🔥
Good morning Munchers!
Here is your daily dose of the news that matters, from Wall Street to Dalal Street - in 4 minutes and 33 seconds.
Let’s dive in.
What’s hot, what’s not?
Story Roundup
1 - Madame Lagarde’s stance on inflation is clear. 0.5% hike. 📈
It’s the first time that this has happened in a decade - the ECB has hiked their base interest rates. That too, at double the 0.25% rate they brought up less than a month back.
The President of the ECB said that it was “time to deliver” - and this comes as
- Eurozone inflation hits 8.6%
- Italy’s parliament crumbles
- Food and energy prices surge
One one hand, you have Russia attacking you from the outside, with weapons in the form of natural gas supply. This gas covers about 1/3rd of Europe’s needs and is super important for cooling, especially as the summer heat ravages a lot of the continent.
And on the other hand, you have an unstable government inside the union and consumer confidence through the floor.
It’s a cocktail of all things evil. 🍸
2 - Italy’s President dissolves Parliament after PM resigns. 🍕
Say ciao to Italy’s parliament - because their President just dissolved it.
This comes after PM Mario Draghi resigned, prompting ‘snap elections’ in the world’s 8th largest economy.
Draghi left his role after three major political parties boycotted a vote in his leadership.
According to the President, parliamentary dissolution was the “last resort” but the situation left him no other choice.
Looks like Ikea has better cabinets than some countries. 🇮🇹
3 - Amazon eyes the medical industry with a $3.9b bet. 💊
Jeff Bezos has his eyes on the world of health.
They just made a $3.9bn bet on One Medical - a US-based healthcare company, offering $18 per share to the shareholders - at a 75% premium.
This acquisition represents an attempt to become a player in the healthcare market - a $4.1tr space in the US alone.
After integrating One Medical, they’ll be able to offer all sorts of things - from an online pharmacy to tele-health services.
One Medical’s current model is pretty interesting - you pay a monthly subscription for access to doctors.
Imagine a future where you can buy a Lightning McQueen suit for your dog, and also get checked up for COVID - all through the Amazon app.
That’s what Bezos wants, and it might be coming soon. 🍿
4 - US Jobless claims surpass expectations. 💸❌
New applicants for unemployment aid in the US rose to the highest level since November last year.
There were 251,000 jobless claims - which comes in higher than analyst expectations of 240,000.
This comes as a lot of high-flying tech companies announced layoffs in recent weeks, owing this to a market that simply isn’t accommodating businesses that run at gargantuan losses.
Recession fears are surely being fueled by this data - and it looks like there’s way more to come.
5 - Russia gives Europe access to their gas pipeline (and lifeline) again. ⛽
Running under the heart of the Baltic Sea is a gas pipeline that connects Russia to Germany.
This pipeline is more of a lifeline for the EU - as 40% of their natural gas needs were serviced through this pipeline last year.
It went offline for repairs last week, and a lot of energy officials were scared that it wouldn’t come back online.
Partial flows resumed, but some people still think bad stuff can happen.
An economy minister said that “Russia has become unreliable as an energy supplier and it is using it’s great power to blackmail Europe”.
Putin’s got quite a few aces up his sleeve. ♠️
Aaaand that’s a wrap.
Thanks a ton for reading. Any feedback is open - positive or negative. Hit my line at aryaansh.rathore@gmail.com or https://www.linkedin.com/in/aryaansh/.