Biden’s new motion against big companies
No government wants any corporation to have supreme control of the economy. Whether it be Xi Jinping’s China or a big democracy such as the US. Addressing the rising power of giants in the US, Biden signed an order on Friday to curb rising monopolies in varied sectors.
He mentioned – “Capitalism without competition isn’t capitalism”. “It’s exploitation.”
The executive order aims to enforce stronger antitrust laws(laws preventing the merger of big corporations which could, post-merger, enforce monopoly) specifically in the healthcare, finance, and tech industry. This is in line with Biden’s plan of shifting power from Big giants to small local players.
No surprise on the reaction from top corporations – “Larger businesses are also strong partners that rely on and facilitate the growth of smaller businesses,” the U.S. The Chamber of Commerce, a powerful lobbying group, said in a statement.
Though the plan looks lucrative and full of good intentions, it’s the enforcement that would decide its success.
What’s in for India?
With Ambani & Adani becoming the powerhouse of India, the question isn’t limited to the USA. Should similar actions be taken in India as well? Should the government interfere in the low pricing strategies of giants(such as Jio’s plan to capture the market)?
The answer isn’t black or white. It’s beyond corporations and ties more closely to the end consumer. At the end of the day, no corporation should have supreme power in a healthy economy.
China against Didi
Recently, China has begun its cycle of controlling the rising power of big giants in the country. Recently on the Grip was the famous riding app – Didi – an app that forced Uber out of China.
On Friday, China blocked new users from enrolling into the app and on Sunday removed the app altogether from the store citing – “Cybersecurity Investigation”.
As per Wall Street Journal – “Back in Beijing, officials, especially those at the Cyberspace Administration of China, remained wary of the ride-hailing company’s troves of data potentially falling into foreign hands as a result of greater public disclosure associated with a U.S. listing.”
It’s simple for China – it will let the companies grow but only to the extent that they don’t become the rivalry threat. This move is a simple threat to foreign investment in Chinese giants.
According to Axios, the Chinese fitness app Keep has decided to scrap its planned $500 million IPO in New York.
Global Equity Market
After slipping mid-week, S&P 500 claimed an all-time high this week. The drop was mainly triggered by technicals rather than fundamentals.
Bond Market Update
The 10-year Treasury bond yield, which peaked at 1.77 percent in March, fell by 0.11 percentage points in just two trading sessions this week and slid below 1.3 percent early on Thursday.
“The cost of cash is decreasing and people are looking for places to deploy that cash,” Caron said. “This is supportive of broader asset markets.”
Companies In Focus
- In the race to go into space, Richard Branson’s backed Atlantic will take him to space this weekend. Later in the month, Bezos plans to do a similar stunt.
- The FDA is calling for an independent review of the approval of Biogen’s controversial Alzheimer’s drug. Shares closed down 3%.
- Ola, an Indian ride firm, raised $500 million from Temasek and Warburg Pincus.
- Zomato all shared to launch its IPO. Read more about it on our cover.
Shubham Agarwal (CFA L2 Candidate | Incoming MBA candidate at University of Cambridge, UK)