US Business

Asian markets posted big early losses Thursday, after Wall Street suffered one of its worst batterings in two years in the previous session.

Downcast earnings reports from retailers had exacerbated worries about consumer resilience and corporate profitability Wednesday, sparking a rough day’s trade.

On Thursday morning, Hong Kong was down by more than three percent, while Tokyo was down by about 2.5 percent.

Among the biggest losers in Hong Kong was Chinese tech giant Tencent, whose stocks fell more than eight percent on lacklustre first-quarter results.

Elsewhere in the region, Australia posted its lowest jobless rate in 48 years, in a potential boost to Prime Minister Scott Morrison two days ahead of tightly contested federal elections.

The unemployment rate dipped to 3.9 percent, the official statistics body said, the lowest rate since 1974.

But stocks in Sydney were still down, as were those in Singapore, Shanghai, Seoul and Taipei, though Jakarta was up by more than two percent.

Stephen Innes at SPI Asset Management called Wednesday’s losses “the most significant daily decline since June 2020”.

“The weakness came as Target’s quarterly earnings added fuel to the recession risk narrative,” he added.

Target, the North American-focused big-box retailer, plunged around 25 percent after earnings missed expectations despite higher sales.

The company pointed to the hit from higher operating costs in results that echoed those of bigger rival Walmart.

The retailers said profits were under pressure and some consumers were avoiding discretionary purchases as prices for food, gasoline and other household staples rise.

All three major US indices dove, with the Dow sinking more than 1,150 points or 3.6 percent, and the Nasdaq plunging 4.7 percent.

European bourses were also down.

“The big falls in shares of these retails… highlights the damage inflation is inflicting on the sector’s profit margins,” said Fawad Razaqzada at City Index.

“What’s more, consumers are getting squeezed as well and if they now start to cut back on spending then retailers could suffer even further,” he added.

In some of his most hawkish remarks to date, Federal Reserve Chair Jerome Powell said Tuesday that the US central bank would raise interest rates until there is “clear and convincing” evidence that inflation is in retreat. 

— Bloomberg News contributed to this report —

– Key figures at around 0215 GMT –

Hong Kong – Hang Seng Index: DOWN 3.07 percent at 20,009.68 

Shanghai – Composite: DOWN 0.89 percent at 3,058.44 

Tokyo – Nikkei 225: DOWN 2.63 percent at 26,202.70 (break)

Brent North Sea crude: UP 1.08 percent at $110.19 per barrel

West Texas Intermediate: UP 0.62 percent at $110.21 per barrel

Euro/dollar: DOWN at $1.0487 from $1.0533

Pound/dollar: DOWN at $1.2349 from $1.2476

Euro/pound: UP at 84.93 pence from 84.43 pence

Dollar/yen: DOWN at 128.54 yen from 129.18 yen

New York – Dow: DOWN 3.6 percent at 31,490.07 (close)

London – FTSE 100: DOWN 1.1 percent at 7,438.09 (close)

The US government will fly in baby formula on commercial planes contracted by the military in an airlift aimed at easing the major shortage plaguing the country, the White House said on Wednesday.

The lack of formula — the result of a perfect storm of supply chain issues and a massive recall — is leaving parents increasingly desperate, and has become a political headache for President Joe Biden as midterm elections loom.

The Department of Defense “will use its contracts with commercial air cargo lines, as it did to move materials during the early months of the Covid pandemic, to transport products from manufacturing facilities abroad that have met Food and Drug Administration (FDA) safety standards,” the White House said.

“Bypassing regular air freighting routes will speed up the importation and distribution of formula and serve as an immediate support as manufacturers continue to ramp up production,” it said, dubbing the effort “Operation Fly Formula.”

Biden has also invoked the Defense Production Act to give baby formula manufacturers first priority in supplies.

“Directing firms to prioritize and allocate the production of key infant formula inputs will help increase production and speed up in supply chains,” the White House said.

Initially caused by supply chain blockages and a lack of production workers due to the pandemic, the shortage was exacerbated in February when, after the death of two infants, manufacturer Abbott announced a “voluntary recall” for formula made at its factory in Michigan and shut down that location.

A subsequent investigation cleared the formula, and the FDA reached an agreement on Monday with Abott to resume production. But it will take weeks to get the critical product back on store shelves.

– Bridging the gap –

Biden wrote in a letter to the heads of the Departments of Agriculture and Health and Human Services that imports of formula “will serve as a bridge to this ramped up production.”

“I request that you work expeditiously to identify any and all avenues to speed the importation of safe infant formula into the United States and onto store shelves,” the president wrote.

The shortage has left many parents frantic and fearful their infants may starve. Formula is a necessity for many families, particularly in low-income households in which mothers have to return to work almost immediately after giving birth and cannot breastfeed.

A further issue is that prices for the formula that remains have skyrocketed.

The desperation of parents is highlighted on social media, where posts shared hundreds of thousands of times urge people to make formula at home — a move pediatricians warn against.

“It won’t meet your baby’s essential nutritional needs, can be very dangerous to their growth and development, and can even make your baby sick,” Tanya Altmann, author of several parenting books and founder of Calabasas Pediatrics in California, told AFP.

The formula shortage also has political consequences, with the Republican opposition — which has set its sights on wresting back control of Congress in November’s midterm elections — seizing on the issue to berate Biden and the Democrats.

The United States relies on domestic producers for 98 percent of the baby formula it consumes. The average out-of-stock rate for the key product hit 43 percent earlier this month, according to Datasembly, which collected information from more than 11,000 retailers.

A gunman’s livestream of a mass killing in New York state was taken down in a matter of minutes — but even that was not fast enough to prevent those images from becoming effectively impossible to erase from the internet.

Posting horrific clips like those is not barred by US speech laws, experts told AFP, so the decision on whether to keep them online is largely left up to individual tech companies.

But even the sites that want them taken down say they struggle to do so, since once unleashed onto the internet, the videos can be edited and shared again and again.

In the case of the Buffalo shooting that killed 10 African Americans at a grocery store on Saturday, it’s particularly chilling because writings attributed to the suspect noted he was in part inspired by another mass shooter’s livestream.

“If (companies) are going to commit to live streaming, you are committed to transmitting a certain number of rapes, murders, suicides and other types of crimes,” said Mary Anne Franks, a professor at University of Miami school of law.

“That’s just what comes with that territory,” she added.

The live feed of the killing on Amazon’s Twitch platform was pulled down within two minutes, the company said –- far quicker than the 17 minutes New Zealand mosque shooter Brenton Tarrant’s attack was streamed on Facebook in 2019.

Social media firms say they fight hard to keep these types of images off their platforms, with automated and manual efforts by workers to squelch video of the Buffalo attack and similar horrors. 

But the images can be edited, titles or names changed and then re-posted on sites that are happy to have the traffic that others have decided is beyond their limit.

One tweet on Wednesday cited the Buffalo suspect’s name, 18-year-old Payton Gendron, and included a link to a video about the attack, but did not show the killing.

However, once on the site viewers were offered additional videos, including one showing over 90 seconds of the attack and which said it had nearly 1,800 views since Sunday.

Websites don’t have to allow this type of video but American law is mostly silent on prohibiting them.

“There is nothing illegal in the US about posting a video of the (Buffalo) livestream. It doesn’t really fall into a category of speech that is unprotected,” said Ari Cohn, who is free speech counsel at think tank TechFreedom.

– ‘Life and death consequences’ –

Once a crime like a mass shooting is broadcast on a major platform it can take various routes to perpetual life online, including being recorded by people watching it live.

A spokesperson for Facebook parent Meta said new versions of videos, which are created to dodge being removed, then become part of a whack-a-mole effort to hunt down the clips.

The same problem is seen at other platforms like Twitter, which has a policy of removing the accounts of mass attackers “and may also remove tweets disseminating manifestos or other content produced by perpetrators,” it says. 

Meta’s vice president of integrity Guy Rosen told journalists in a briefing Tuesday the firm has to tread a fine line because too broad of a filter could end up unintentionally taking down the wrong kind of content.

Live broadcasts are one of the areas where social media platforms face accusations of fanning violence and hatred, and law professor Franks said it’s not likely wise to offer that capability to the general public.

“The bigger problem here is when tech companies make these decisions for the public… that this is a tool that is useful in ways that will outweigh its disadvantages,” she added.

New York’s Attorney General Letitia James announced Wednesday a probe of various tech companies over the attack, including Twitch.

The general lack of up-to-date social media policies on the national level in the United States has also contributed to the problems associated with live videos online.

US states have crafted their own policies, which can reflect the heavy partisan divides along what should be allowed online.

Texas, for example, has enacted a controversial social media law that bars larger sites from “discriminating against expression,” which has been heavily criticized for being so broad that it interferes with content moderation.

“The recent tragedy (in Buffalo) underscores that this is not just about partisan point scoring,” Matt Schruers, president of the Computer & Communications Industry Association, told a panel discussion about the law this week. 

“There are life and death consequences to tying the industry’s hands to respond to bad actors on the internet,” he added.

The UN warned Wednesday that a growing global food crisis could last years if it goes unchecked, as the World Bank announced an additional $12 billion in funding to mitigate its “devastating effects.”

Food insecurity is soaring due to warming temperatures, the coronavirus pandemic and Russia’s invasion of Ukraine, which has led to critical shortages of grains and fertilizer.

At a major United Nations meeting in New York on global food security, Secretary-General Antonio Guterres said the war “threatens to tip tens of millions of people over the edge into food insecurity.”

He said what could follow would be “malnutrition, mass hunger and famine, in a crisis that could last for years,” as he and others urged Russia to release Ukrainian grain exports.

Russia and Ukraine alone produce 30 percent of the global wheat supply.

Moscow’s invasion of Ukraine and international economic sanctions on Russia have disrupted supplies of fertilizer, wheat and other commodities from both countries, pushing up prices for food and fuel, especially in developing nations.

Before the invasion in February, Ukraine was seen as the world’s bread basket, exporting 4.5 million tonnes of agricultural produce per month through its ports — 12 percent of the planet’s wheat, 15 percent of its corn and half of its sunflower oil.

But with the ports of Odessa, Chornomorsk and others cut off from the world by Russian warships, the supply can only travel on congested land routes that are far less efficient.

“Let’s be clear: there is no effective solution to the food crisis without reintegrating Ukraine’s food production,” Guterres said.

“Russia must permit the safe and secure export of grain stored in Ukrainian ports.”

US Secretary of State Antony Blinken, who chaired the summit, and World Food Programme head David Beasley echoed the call.

“The world is on fire. We have solutions. We need to act and we need to act now,” implored Beasley.

Russia is the world’s top supplier of key fertilizers and gas.

The fertilizers are not subject to the Western sanctions, but sales have been disrupted by measures taken against the Russian financial system while Moscow has also restricted exports, diplomats say.

Guterres also said Russian food and fertilizers “must have full and unrestricted access to world markets.”

– Ukraine only ‘latest shock’ –

Food insecurity had begun to spike even before Moscow, which was not invited to Wednesday’s UN meet, invaded its neighbor on February 24.

In just two years, the number of severely food insecure people has doubled — from 135 million pre-pandemic to 276 million today, according to the UN.

More than half a million people are living in famine conditions, an increase of more than 500 percent since 2016, the world body says.

The World Bank’s announcement will bring total available funding for projects over the next 15 months to $30 billion.

The new funding will help boost food and fertilizer production, facilitate greater trade and support vulnerable households and producers, the World Bank said.

The bank previously announced $18.7 billion in funding for projects linked to “food and nutrition security issues” for Africa and the Middle East, Eastern Europe and Central Asia, and South Asia.

Washington welcomed the decision, which is part of a joint action plan by multilateral lenders and regional development banks to address the food crisis.

The Treasury Department described Russia’s war as “the latest global shock that is exacerbating the sharp increase in both acute and chronic food insecurity in recent years” as it applauded institutions for working swiftly to address the issues.

India over the weekend banned wheat exports, which sent prices for the grain soaring.

The ban was announced Saturday in the face of falling production caused primarily by an extreme heatwave.

“Countries should make concerted efforts to increase the supply of energy and fertilizer, help farmers increase plantings and crop yields, and remove policies that block exports and imports, divert food to biofuel, or encourage unnecessary storage,” said World Bank President David Malpass.