Ruptured supply chains, rising oil prices, and resurgent inflation. The Red Sea crisis is rekindling memories of the Ukraine War—but this time could be different - Fortune (Full Access)   

It’s now day 30 of the Red Sea crisis—and month four of worries of a wider Middle East conflict, the possibility of which has concerned economists and politicians alike since the Oct. 7 outbreak of the Israel-Hamas war. Over the past month, Houthi militants based in Yemen have repeatedly attacked cargo ships in the area, forcing shipping giants to reroute their vessels around South Africa’s Cape of Good Hope. That’s a big deal, because roughly 15% of the world’s shipping traffic, and 30% of its container traffic, transits the Red Sea each year, including oil tankers and container ships transporting every type of product you can imagine. 

The conflict has intensified in recent days. On Thursday, a U.S.-led coalition ordered airstrikes on Houthi targets in Yemen, a week after Iran, which has backed Houthi militants for years, deployed the warship Alborz to the region. Even oil tankers, which for a time had continued their transit through the Red Sea even as cargo vessels headed for safer passages, abandoned the trade route this week. On Friday, four major oil tankers changed their course to avoid the Red Sea after the most recent strikes by the U.S. and its allies. 

Ominously, for the global economy, which was rattled by Russia’s 2022 invasion of Ukraine, geopolitics could be returning to center stage before the Federal Reserve’s inflation battle has been completely won.

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With carmakers in a ‘state of shock’ over Tesla-beating BYD’s prices, EU investigators will visit China’s EV giants as part of an anti-subsidy probe - Fortune (Full Access)   

China might have problems with its economy, but as an exporter of affordable electric vehicles, it’s on a tear. Now, investigators from the European Commission will visit Chinese EV makers as part of a probe into whether they have an unfair advantage thanks to government subsidies. 

In the coming weeks, the EU investigators will visit BYD, Geely, and SAIC, according to Reuters. Their visits will help determine whether the EU imposes higher tariffs to protect European carmakers. 

BYD recently overtook Elon Musk’s Tesla as the global leader in sales of electric vehicles. Backed by Warren Buffett’s Berkshire Hathaway, the carmaker keeps its costs low partly by owning the entire supply chain of its EV batteries, significant since a battery accounts for roughly 40% of an electric vehicle’s price.

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3M’s CEO is set to score a $26 million pension while the company freezes plans for non-union employees  - Fortune (Full Access)   

It seems like a pathway to comfortable retirement is a luxury saved for those at the top in today’s economy—at least if you work at 3M. After freezing its pension program for non-unionized workers, the conglomerate company known for manufacturing Post-its, command strips, and tape is tacking more money into its CEO’s benefit package.

Earlier this week, 3M announced that it would freeze pensions for non-unionized employees and shift to a 401(k) retirement plan in 2028. When asked for comment, a representative for 3M pointed Fortune to its press release, which stated that they’ve been chipping away at the pension program since 2009 because a 401(k) plan allows for “more flexibility and control” when investing. 

“This is an important decision for 3M as it helps to set up both companies for future success,” CEO Mike Roman said in the release. “This was also a difficult decision because it impacts employees across the United States.” 

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The running of the bulls in the 2023 stock market was more like the waddle of the fat cats - Fortune (Full Access)   

Meow. That’s the sound of 2023’s bull market getting swallowed up by the fat cats that make up the vast majority of stock-market wealth. How vast? Try a record 93% of value owned by the wealthiest 10% of society, according to no less an authority than the Federal Reserve. 

It puts a different spin on the intense bull run that equities went on dating back to spring 2020, with the S&P 500 more than doubling in value, rising from 2,304 in March 2020 to close at 4,769 on the last trading day of last year. That figure even factors in the market slipping into a bona fide bear market in 2022 amid surging inflation and the souring of pandemic darlings, for instance the “crypto winter” and the end of meme-stock mania.

These figures are all the more remarkable considering that they are not equivalent to ratios of stock ownership. In fact, the number of Americans who hold any stocks at all also hit a record, with 58% of all Americans invested in equities in some form, also according to Fed data. This means that many of us own stock, but only the top 10% have truly valuable holdings.

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