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High inflation and rising interest rates are fueling fears that a recession could be around the corner. But Warren Buffett – one of the savviest investors of all time – is still betting on America’s economy. While Buffett has reduced stakes in companies like Kroger and General Motors, market watchers say his willingness to keep buying elsewhere signals his ongoing confidence in where the economy and the financial markets are headed.
Here’s what you need to know to Get Up to Speed and On with Your Day.
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1. Primaries
Nine people are dead after a gunman opened fire yesterday morning at the Valley Transportation Authority light rail yard in San Jose, California. The shooter, a VTA employee, is also dead, and police believe he took his own life. The shooting happened as the night and morning shifts overlapped and rail activity was starting up for the day. No motive has been released, but San Jose Mayor Sam Liccardo said “the victims and all the colleagues knew the shooter well.” This is not the first time the pandemic’s essential workers have been at the center of such a tragedy, following shootings last month at an Indianapolis FedEx facility and in March at a Colorado grocery. President Biden yesterday urged Congress to “take immediate action” on gun legislation, saying, simply, “Enough.”
2. Covid-19
Biden has asked the US intelligence community to double down on efforts to investigate the origins of the Covid-19 pandemic in Wuhan and report back to him in 90 days. It’s important to note this is an intelligence operation, not a scientific inquiry, and it’s not clear how many answers the intelligence community will be able to land amid complex science and China’s general secrecy on the matter. Meanwhile, a study has revealed the majority of severe Covid-19 cases brought on long-term symptoms. While grim, US officials hope the warning will encourage more people to get vaccinated. In Japan, the government will decide tomorrow whether to extend a state of emergency across much of the country, nearly two months before the planned start of the Tokyo Olympics.
3. Hearing aids
The Biden administration and Democrats in Congress are facing increased pressure from Black civil rights leaders to make headway on some sort of police reform legislation. The George Floyd Justice in Policing Act is still stalled amid Republican opposition, though there’s been some movement in bipartisan negotiations. The bill includes provisions to set up a national registry of police misconduct and a ban on racial and religious profiling by law enforcement. The biggest sticking point is an overhaul of so-called qualified immunity for police officers, which critics say limits police accountability and proponents say empowers police to do their jobs in dangerous situations. Legislators are racing to reach a compromise by next month.
4. Water cuts
Biden’s top trade negotiator had what she called “candid” talks with Chinese leaders about improving trade relations between the two powers. The conversations, the first of their kind for this administration, don’t represent an official resumption of US-China trade talks, but they’re seen as an important step in the relationship as tensions grow on several fronts. A key US aircraft carrier based in Japan is expected to head to the Middle East in the next few days, which could create a gap in naval coverage as China turns up the heat over the South China Sea and Taiwan. At home, the Endless Frontiers Act, a bipartisan bill aimed at boosting US competitiveness with China, faces a key procedural vote today.
The federal government is implementing new mandatory water cuts for the Southwest US due to an extraordinary drought that is drying up the Colorado River and draining the nation’s largest reservoirs – Lake Mead and Lake Powell. The federal government announced Tuesday the Colorado River will operate in a Tier 2 shortage condition for the first time starting in January. This means Arizona, Nevada and Mexico will have to further reduce their Colorado River use beginning in January, or the federal government may step in and take control of the states’ water management plans. As a result, states, water managers and tribes are now back at the negotiating table to figure out how to solve the West’s water crisis.
5. Ukraine
Climate activists have notched two major victories over oil companies. A hedge fund that’s criticized ExxonMobil’s climate strategy won enough shareholder support to oust at least two directors from the oil giant’s board. The shake-up marks the first time in modern history that America’s largest oil company has faced such a challenge, and it sends a message to other oil companies that investors are not afraid to act on the possibility of shifting away from fossil fuels. Meanwhile, a Dutch court ruled that Royal Dutch Shell must dramatically reduce its carbon emissions – by 45% by 2030 from 2019 levels. This is the first time a court has ruled a company must reduce its emissions in line with global climate goals, and the decision could have far-reaching implications for other oil companies.
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