Biden and McCarthy reach preliminary agreement to raise US debt ceiling; US consumer confidence index deteriorated in May due to the debt limit crisis | Cross-border e-commerce daily

US debt ceiling preliminary agreement reached by Biden and McCarthy; May US consumer confidence index worsened due to debt limit crisis

【 Biden and McCarthy reach preliminary agreement to raise US debt ceiling 】 US President Biden and Republican leader McCarthy have reached a preliminary agreement to raise the federal government’s debt ceiling of $31.4 trillion, thus ending months of deadlock.

The agreement will raise the debt ceiling for two years while limiting spending during this period, and will include some additional work requirements for poverty programs.

McCarthy said he expects to complete drafting the bill on Sunday, then speak with Biden and vote on the agreement on Wednesday.

【US consumer confidence index worsens in May due to debt limit crisis】 On May 26, the University of Michigan said that its consumer confidence index for May fell from 63.5 in April to 59.2. This decline reflects the trend during the 2011 debt limit crisis when consumer confidence also fell sharply. The index was higher than the initial reading of 57.7 in mid-month.

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01

North America

【US Treasury cash balance continues to decline, hitting the lowest level since 2017】 In a statement on Friday, the US Treasury said it had only $67 billion in special measures to help the government pay its bills as of May 24. This is part of the $335 billion authorization measure to prevent the US government from running out of borrowing space under the statutory debt ceiling, which was about $92 billion as of May 17. These measures allow the government to continue to sell debt even if it has reached the borrowing limit of $31.4 trillion set by Congress. According to data released on Friday, the US Treasury’s cash balance fell to $38.8 billion as of Thursday, the lowest level since 2017.

Microsoft adjusts Bing’s user tracking to avoid fines On May 26th, Microsoft adjusted its Bing search engine’s user tracking methods to avoid further privacy fines in France. The French regulatory agency CNIL stated that Microsoft “responded within the required timeframe and made technical modifications so that tracking functions related to combating ad fraud will be disabled without the explicit consent of French users.”

Meta proposes restrictions on its use of advertising data from other companies On Friday, the UK Competition and Markets Authority (CMA) stated that Meta Platforms, the owner of Facebook, has made a commitment not to use competitors’ advertising data for its Facebook Marketplace classified ads service. The company will also take measures to limit the use of advertising data to develop other Meta products offered in the UK that compete with other advertising customers.

If the CMA accepts these commitments, advertising customers in competition with Meta will be able to choose to refuse to have their advertising data used for Facebook Marketplace.

Neuralink, owned by Musk, receives FDA approval for human trials The US Food and Drug Administration (FDA) announced that Neuralink, Elon Musk’s brain implant technology start-up, has received approval to conduct its first human clinical trial.

The company is developing a device that will allow people to control computer interfaces with their brains. Neuralink says the device will help restore vision and allow disabled individuals to move and communicate by decoding brain activity.

Neuralink plans to open clinics where surgical robots will implant the device into patients’ brains. The surgical robots will sew in Neuralink’s proprietary electrode array (i.e. brain signal recording probe) into the brain.

【Twitter may withdraw from the EU Code of Practice on Disinformation】 On May 25th, it was reported that Twitter may withdraw from the European Union’s Code of Practice on Disinformation, but this does not mean that Twitter will withdraw from Europe. The European Commission strengthened the requirements of the code last year, requiring companies to submit progress reports regularly and provide data on how they combat false information.

【Tesla: Model Y becomes the best-selling model globally in Q1】 Tesla officials stated that the Model Y became the best-selling model globally in the first quarter of this year.

【JPMorgan Chase to lay off around 500 employees in tech and operations this week】 According to reports on Friday, JPMorgan Chase laid off around 500 employees this week, mainly in the technology and operations departments.

Earlier, JPMorgan Chase took over First Republic Bank after its bankruptcy and laid off about 1,000 former employees on Thursday.

02

EU region

【European natural gas prices have fallen more than 66% this year】 European natural gas prices have experienced the longest weekly decline since 2007, as there is little sign of significant economic recovery, confirming that demand is difficult to recover. The European benchmark natural gas futures fell by 4.7% on Friday and then narrowed their decline, and they are expected to record a continuous eighth week of decline, with a cumulative decline of more than 66% this year. Due to continued inflation and economic downturn, industrial enterprises find it difficult to increase production.

【Multiple industries in Italy hold strikes to protest against high inflation】 On the 26th local time, employees in transportation, healthcare, education, scientific research, and other industries held strikes and demonstrations nationwide in Italy to protest against high inflation, which has caused heavy burden for residents’ lives. They are demanding higher wages and measures to stabilize prices.

【Allegro Q1 Consolidated GMV Reaches PLN 13.139 Billion】 On May 26th, Allegro, the Polish e-commerce platform, released its Q1 2023 financial report. The report showed that Allegro’s Q1 consolidated revenue increased by 66.7% year-on-year, reaching PLN 2.321 billion, exceeding the expected PLN 2.288 billion; adjusted EBITDA increased by 14.7%, reaching PLN 530.9 million.

Allegro’s Polish business revenue grew by 22.7% year-on-year in Q1, reaching PLN 1.71 billion, due to substantial growth in GMV, commission ratio, and advertising service revenue; adjusted EBITDA increased by 29.7% year-on-year in Q1, reaching PLN 600.6 million.

03

Other Regions

【UK Retail Sales Rebound Exceeds Expectations】 UK retailers’ sales growth exceeded expectations last month, indicating that consumers have shown remarkable resilience in the face of rising living costs, with sales growth in three of the past four months. This further increases pressure on the Bank of England to raise interest rates as it tries to lower stubbornly high inflation. Sales in all categories tracked by the UK’s National Statistics Office grew, except for fuel and household goods.

【Some Workers at London Heathrow Airport Begin Another Round of Strikes】 On May 25th, some workers at London’s Heathrow Airport began another round of strikes. The strike, organized by the UK’s United Union, is expected to last until the 27th and involve around 1,400 people; airport management said it has implemented emergency plans to ensure normal travel for passengers. The airport also reminded passengers to arrive early to avoid travel delays. Earlier, the UK’s United Union had been on strike for 15 days over issues such as wage increases, which resulted in failed negotiations with management.

【Ozon’s Q1 GMV reaches 303 billion rubles】 On May 26th, Ozon released unaudited financial and operating performance for the first quarter of 2023. According to the financial report, Ozon’s GMV in the first quarter increased by 71% year-on-year, reaching 303 billion rubles, mainly driven by the strong performance of Ozon Marketplace (3P), while the total volume of 1P product transactions in the first quarter of 2023 increased by roughly the same amount year-on-year.

Ozon’s Q1 order quantity increased by 93% year-on-year, and as of March 31, 2023, the number of active buyers increased to 37 million. The order frequency of each active customer has almost doubled in the past two years, reaching 15 orders per year.

【Lazada launches e-commerce AI chatbot LazzieChat】 On May 26th, Lazada announced the launch of Southeast Asia’s first e-commerce AI chatbot supported by OpenAI ChatGPT technology – LazzieChat.

LazzieChat can intelligently respond to user inquiries, act as a personal shopping guide, provide personalized recommendations and product suggestions, and help users optimize their shopping experience. The service is now available in Singapore, the Philippines, and Indonesia.

【Hyundai and LG Energy to form battery joint venture in the United States】 The Hyundai Motor Group and LG Energy plan to invest $4.3 billion to establish a joint venture for electric vehicle batteries in Savannah, Georgia, with each owning half of the shares. At this location, the Hyundai Motor Group will build a new electric vehicle factory.

Hyundai Motor Group’s three subsidiaries – Hyundai Motor, Kia Motors, and Hyundai Mobis – have jointly invested to ensure they receive 50% of the joint venture. The goal of the joint venture is to start production by the end of 2025.

【Chinese youth unemployment rate rises above 20%, signs of economic stagnation】 China’s National Bureau of Statistics released economic data for April on Tuesday, showing that the unemployment rate for 16-24 year-olds was a record high of 20.4%. This number was 16.7% at the end of last year, once again indicating uncertainty in China’s economic recovery. Indicators such as total retail sales of consumer goods, industrial added value, and fixed asset investment have not met economists’ expectations.

【Pinduoduo Q1 net profit and revenue exceed expectations】 Pinduoduo’s Q1 profit and revenue greatly exceeded expectations, thanks to the strong performance of online marketing and transaction services. The net profit for the quarter increased to more than double that of the same period last year, reaching RMB 8.1 billion, or a net income per ADS of RMB 5.55; compared to RMB 2.6 billion and RMB 1.84 per ADS in the same period last year. Adjusted net income per ADS was RMB 6.92, higher than the analyst average forecast of RMB 4.46. Revenue increased by 58.1% to RMB 37.64 billion, exceeding the analyst average forecast of RMB 32.18 billion. Online marketing service revenue increased by 50% to RMB 27.24 billion, and transaction service revenue jumped 86% to RMB 5.59 billion. Gross margin increased from 69.9% to 70.4%.

【SF Airlines’ “Ezhou-Los Angeles” international freight route officially launched】 On May 27th, SF Airlines’ B747-400 all-cargo aircraft carrying nearly 80 tons of cargo flew directly from Ezhou to Los Angeles, marking the official launch of the “Ezhou-Los Angeles” international freight route. This is SF Airlines’ first North American route opened at the Hua Lake Airport in Ezhou.

【COSCO SHIPPING Logistics Container “Rate Collect” Platform officially launched】 On May 27th, COSCO SHIPPING Logistics Container’s first online digital product, the “Rate Collect” platform, was officially launched. The “Rate Collect” platform is an online integration platform for the ocean and multimodal transport products of multiple carriers, providing carrier e-commerce product rates, cabin inquiries, order placement and other functional services to internal and external users.

【Baltic Dry Index records largest weekly decline in four months】 The Baltic Dry Index continued to fall last Friday, with the largest weekly decline in four months, as all types of ship freight indices fell. The Baltic Dry Index fell 43 points or 3.5% to 1172 points; the weekly decline was 15.3%, the largest single-week decline since January 20. The Cape Size ship freight index fell 75 points or 4.3% to 1683 points, with a weekly decline of 20%. The daily profit of a Cape Size ship fell by $621 to $13,956. The Panamax ship freight index fell 22 points or 1.9% to 1119 points, with a weekly decline of 8.4%, the seventh consecutive week of decline. The daily profit of a Panamax ship fell by $200 to $10,072. The Supramax bulk carrier freight index fell 34 points or 3.5% to 946 points, with a weekly decline of 12.3%, the largest single-week decline since January 13.

【Ningbo Shipping Exchange: India-Pakistan route index is 1231.5 points, up 14.4%】 From May 20th to May 26th, the Ningbo Shipping Exchange released the Ningbo Container Freight Index (NCFI) of the Maritime Silk Road Index, which closed at 702.4 points, basically unchanged from the previous week. Among the 21 routes, 11 routes saw an increase in freight index, and 10 routes saw a decrease. Among the main ports along the “Maritime Silk Road”, the freight index of 7 ports rose and that of 9 ports fell. In addition, there were large fluctuations in the India-Pakistan route market this week: the cabin capacity continued to be tight, and the spot market booking prices maintained an upward trend, but the increase was narrower than the previous two weeks. The India-Pakistan route index is 1231.5 points, up 14.4% from the previous week.

【eBay Germany introduces new function to facilitate seller uploading energy labels】 On May 26th, eBay Germany reminded sellers of energy-saving products to upload energy efficiency labels or performance declarations. In order to help sellers sell these products in compliance, eBay has launched a new upload function. The function facilitates sellers to upload images of energy labels and product data sheets to the product information.

【eBay Germany releases new regulations on hazardous substances】 On May 26th, eBay Germany announced that if sellers sell dangerous substances and mixtures, according to legal provisions, sellers must list information containing hazardous characteristics (hazard information, hazard pictograms, and signal words) in the quotation, which are also indicated on the safety data sheet or label of the product.

【Shopee official wallet free withdrawal rights card launched】 On May 26th, the Shopee official wallet free withdrawal rights card was officially announced. The purchase of the rights card can enjoy up to 2 years and 6 months of free withdrawals, and have the opportunity to participate in the “Free Order” and “Send Rights Card” activities.

The official Shopee wallet provides free withdrawal rights cards that are priced better than similar products in the market and have limits that better meet the actual needs of Shopee sellers. At the same time, multiple cards can be purchased, and free withdrawal limits can be stacked and continuously used.

[Shopee Vietnam implements buyer inspection policy on all sites] On May 26th, Shopee’s platform in Vietnam recently launched the Return On Spot: Shopee Co-Check buyer on-site inspection policy for all sites in Vietnam. For orders with Shopee Co-Check on-site inspection, the platform will not charge sellers any additional fees.

[Nigerian e-commerce Konga introduces same-day delivery guarantee service] On May 26th, Nigerian e-commerce platform Konga recently launched a same-day delivery guarantee service called KongaNow. Consumers who purchase items marked as KongaNow on the Konga platform will receive their packages within 1 to 6 hours.

This service will officially launch at 1:00 am on May 30th, 2023 in Lagos and Abuja. At the same time, Konga will also launch a “24-hour flash sale” event to purchase high-end products from manufacturers at more favorable prices.

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