Politically, Biden’s visit to Israel comes amid growing concerns about the possibility of a larger conflict. Additionally, the United States is imposing restrictions on China’s access to advanced chips intended for artificial intelligence.
On the economic side, retail sales have seen an increase and there is optimism about the US economy. Despite Chinese authorities’ efforts to stabilize declining property sales, they have had limited impact so far.
Within the corporate sphere, Goldman Sachs’ income declines after its withdrawal from retail banking. In turn, Rolls-Royce will cut up to 2,500 jobs in an effort to streamline the group.
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Policy
- President Biden is scheduled to visit Israel on Wednesday, to reaffirm US solidarity with Israel, a grieving nation on the verge of invading Gaza, the Palestinian territory that is already immersed in a serious humanitarian crisis following the Israeli attacks that followed the Hamas terrorist attacks. The trip will take place at a time of growing concern about a possible regional war. The United States expressed hope of being close to an aid deal and establishing “safe zones” in southern Gaza, where the United Nations says 600,000 Palestinians have fled after Israel warned them to leave the north.
- The Biden administration announced additional restrictions on the type of advanced semiconductors that American companies can sell to China, strengthening limitations issued last October to curb China’s advance in supercomputing and artificial intelligence. The Biden administration argues that China’s access to such advanced technology is dangerous because it could help the country’s military in tasks such as guiding hypersonic missiles, establishing advanced surveillance systems or breaking secret US codes.
Economy
- Despite high interest rates, persistent inflation, and dwindling savings built up during the pandemic, U.S. retail sales figures, spanning in-store, online, and restaurant purchases, saw solid growth. increase of 0.7% in September compared to the previous month. This confirms that the remarkable demonstration of consumer resilience this summer persists. The unemployment rate remains historically low at 3.8%, and wage growth exceeds the pre-pandemic pace.
- Economists are expressing growing optimism about the U.S. economy. The fundamental elements driving optimism are: the continued reduction in inflation, the Federal Reserve’s cessation of raising interest rates, and a strong labor market and economic growth that has exceeded forecasts. However, recent developments could have a negative effect on the outlook for the US economy in the coming months, such as the impact of the conflict between Israel and Hamas on energy prices.
- After relying on a debt model to build for decades, Beijing must make difficult decisions about the country’s real estate market and its economic future. China bet everything on the real estate market, and now its economy is paying the price. Beijing’s ability to stem the collapse is now in doubt as consumers continue to show a lack of interest in purchasing real estate, even during a recent Golden Week holiday, which is typically a prominent period for sales.
Business
- Goldman Sachs reported a 36 percent decline in third-quarter earnings, marking its eighth straight quarter of declines, as it faced losses as a result of its withdrawal from retail banking and the writedown of its investments in real estate. Still, Goldman posted a year-over-year increase in investment banking revenue for the first time in nearly two years. There is optimism on Wall Street that activity is gradually recovering and that 2024 could be a stronger year.
- Rolls-Royce, whose engines power large civil aircraft as well as submarines and military aircraft, will cut up to 2,500 jobs from its workforce of 42,000 as part of a global restructuring led by its new chief executive aimed at streamlining its operations and improve results. The restructuring has been widely expected after Erginbilgic, who took over as chief executive in January, promised to address years of underperformance at the company, which has undergone multiple restructurings under different leaders in the past decade.
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