Quartz Daily Brief—Tencent earnings, Russia’s sanctions payback, JP Morgan’s commodities sale, military “combat gum”

March 19, 2014
March 19, 2014

What to watch for today

Toyota’s recall settlement. The automaker will reportedly pay $1 billion in a deal with the US Justice Department. Toyota recalled millions of cars beginning in 2009 after customers complained about unintended acceleration.

Britain unveils its budget. With the economy looking a bit stronger, UK chancellor George Osborne is set to announce a rise in the tax-free allowance and child support subsidies. He will also, as is customary, bump up the taxes on cigarettes and alcohol.

The Fed tries a new tack. In the first meeting with Janet Yellen as chair, the central bank expected to further cut monthly bond purchases to $55 billion, and tinker with forward guidance, its criteria for raising interest rates. Like Britain’s central bank, it had tied a rise in rates to a fall in unemployment, but is now reconsidering.

While you were sleeping

Tencent’s growth slowed. The Chinese internet giant posted fourth-quarter profits of 3.91 billion yuan ($631.2 million), up 13% from a year ago. But its crucial WeChat messaging service posted a mere 5.7% growth in users, and the company’s selling and marketing expenses surged by nearly 40%.

The hunt for MH370 got political. Thailand revealed a blip on its military radar that might have been the Malaysia Airlines plane—but only 10 days after it went missing. Malaysia called on governments to put the passengers’ safety ahead of regional rivalries or security concerns.

Russia warned of payback. The head of Rosneft, Russia’s state energy company, said sanctions would “only make the conflict worse.” His Asia trip includes stops in India, Vietnam and South Korea, suggesting Russia is seeking alternatives to western markets.

Japan’s trade deficit may have peaked. February’s deficit was only 800.3 billion yen, (paywall) down from a record 2.8 trillion yen ($27.5 billion) in January. Exports surged due to increased auto sales to China, and imports, which had surged ahead of an April 1 sales tax increase, retreated slightly. Separately, Bank of Japan governor Haruhiko Kuroda said the country is on track to meet its 2% inflation goal this year.

JP Morgan is selling its commodities businessAccording to the Wall Street Journal (paywall), the US bank will unload the unit to Switzerland’s Mercuria Energy Group for an unknown sum; its assets were recently valued at $3.3 billion.

Wannabe Alibaba investors got creative. Investment bankers found a way to invest (paywall) in the Chinese e-commerce giant before its IPO: buy up shares of its minority investors Yahoo and Softbank, and short the rest of their businesses.

A hedge fund bet on bitcoin. Fortress Investment Group will roll $13 million worth of bitcoins into a $150 million fund centered around digital currencies. Other investors include Benchmark, a venture capital firm that invested in Twitter and Snapchat.

Quartz obsession interlude

John McDuling on Goldman Sachs’s prediction that Elon Musk could be the next Steve Jobs or Henry Ford. “Comparing smartphones to electric cars might seem ridiculous, but Goldman says its analysis has been adjusted to reflect the different life cycles of these two products. And if the sales of Tesla cars were to grow at the same rate as the iPhone, it would be selling 3.1 million units a year by 2025—up from 22,000 last year —which would be 65.5% of all electric vehicles, or about 2.7% of all light vehicle sales, according to the analysis.” Read more here.

Matters of debate

China is not facing a “Lehman moment.” The looming failure of Zhejiang Xingrun Real Estate is more like the dotcom-era Pets.com.

The age of robots is already upon us. From sat-navs to ATMs, we rely on robots for a lot of things—we just don’t call them robots.

Nigeria could be Africa’s richest economy. But more Nigerians are nevertheless living in poverty.

The US wouldn’t even know if Putin had American assets. Neither the Russian president nor the US financial system is known for their transparency.

Surprising discoveries

Artists come from richer parents than doctors. But the artists end up poorer.

Hong Kongers can invest in expensive whiskey. A private equity fund is raising $10 million for the “sourcing of rare product from a proprietary network at under-market prices.”

Modern soldiers need “combat gum.” The US military is developing anti-cavity chewing gum to save money on emergency dental treatment.

Dressing down makes you look more authoritative. It takes a certain amount of confidence to be non-conformist.

Colombia’s vice president really loves his dog. He turned down the ambassadorship to Brazil because his german shepherd couldn’t bear the hot weather.

Our best wishes for a productive day. Please send any news, comments, investment-grade whiskey, and military-grade chewing gum to hi@qz.com. You can follow us on Twitter here for updates throughout the day.

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