Business briefing

The daily business briefing: January 3, 2023

Big-bank economists predict a 2023 recession, Tesla reports record deliveries but falls short of forecasts, and more

1

Big-bank economists predict 2023 recession

More than two-thirds of economists polled at 23 large financial institutions predict the economy will slip into a recession in 2023, according to a Wall Street Journal survey. Two others said a downturn would hit in 2024, the Journal reported Monday. Several factors contributed to the assessment, including tightening lending standards, a housing market decline, and the fact that U.S. households are going through their pandemic-era savings. But the main recession threat comes from the Federal Reserve's aggressive interest-rate hikes, which are designed to cool the economy to bring down high inflation. Inflation has fallen slightly but remains far above the central bank's 2 percent target. 

2

Tesla's record 4th-quarter deliveries fall short of expectations

Tesla on Monday reported that it delivered 405,278 of its electric vehicles in the fourth quarter. The figure was enough to set a company record, but still short of the 420,000 units Wall Street analysts had expected. Estimates fell in the last few weeks of the quarter, and had been as high as 450,000 in the summer. The disappointing total came after Tesla's stock suffered its worst annual decline ever, with shares down about 65 percent in 2022. Tesla delivered about 1.3 million vehicles in 2022, up from 935,950 in 2021. Analysts expect Tesla's deliveries to reach up to 1.9 million cars in 2023, and say hitting the year's target is key for the stock.

3

Southwest cancels dozens of flights after rebounding from meltdown

Southwest Airlines canceled at least 160 flights, more than any other U.S. airline, on Monday as the airline said it was returning to nearly normal operations after last week's meltdown, CBS News reported, citing flight tracking site FlightAware. Southwest also delayed 422 departures, or about 10 percent of its scheduled flights. Most of the disruption involved flights into or out of Denver International Airport. Southwest canceled thousands of flights daily last week, disrupting passengers' holiday plans. The airline blamed a winter storm. Transportation Secretary Pete Buttigieg wrote in a letter to the airline that many of the problems weren't due to the weather, saying other airlines affected by the storm "recovered relatively quickly, unlike Southwest."

4

Stock futures rise ahead of 1st day of 2023 U.S. trading

U.S. stock futures surged early Tuesday ahead of the first day of U.S. trading in the new year. European stocks started 2023 with solid gains on Monday, after global markets lost more than $30 trillion in 2022 as investors fretted about Russia's invasion of Ukraine and central bank rate hikes to fight inflation. The regional Stoxx 600, which fell 12.9 percent in 2022, gained 1.0 percent on the first weekday of the new year. France's Cac 40 and Spain's Ibex rose 1.9 percent and 1.7 percent, respectively. The few Asian markets that were open had a mixed day. South Korea's Kospi dropped 0.5 percent, while the Sensex in Mumbai rose 0.4 percent. U.S. markets were closed Monday for the observed New Year holiday.

5

China threatens retaliation against countries imposing COVID travel restrictions

China on Tuesday threatened to "take corresponding measures" against any country that imposes COVID-19 restrictions on travelers from China, Bloomberg reported. "We believe that some countries' entry restrictions targeting only China lack scientific basis and some excessive measures are unacceptable," Foreign Ministry spokesperson Mao Ning said during a Beijing news briefing. "We firmly oppose attempts to manipulate COVID prevention and control measures to achieve political goals." She said China was prepared to "strengthen communication" to help in the global fight against the coronavirus. Several countries, including the United States and Japan, have started requiring travelers from China to show negative COVID tests in response to China's ongoing infection surge.

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