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IMF cuts global growth forecast, says worst is yet to come – Stocks dip for the 5th straight day as treasury yields rise – Uber/ Lyft/Doordash plunge on Labor Dept. move – 3 automakers invest in batteries – more financial news.
The International Monetary Fund (IMF) slashed its economic growth forecast for next year to 2.7%, from 2.9% seen in July and 3.8% in January, while adding it sees a 25% probability growth will slow to less than 2%, Zero Hedge reported. The report says the world’s three largest economies – the United States, the European Union, and China – will continue to slow.
The IMF warned central banks of “their risk of both under-and over-tightening. Under-tightening would entrench further the inflation process … Over-tightening risks pushing the global economy into an unnecessarily harsh recession.”
The IMF expects global inflation to peak in late 2022, increasing from 4.7% in 2021 to 8.8%, and that it will “remain elevated for longer than previously expected,” CNBC reported.
On the right side, the IMF anticipates global inflation will likely decrease to 6.5% in 2023 and to 4.1% by 2024.
“The worst is yet to come, and for many people 2023 will feel like a recession,” the IMF’s chief economist wrote in a report.
Most stocks closed lower for 1/5 straight day on Tuesday. The NASDAQ fell -1.1%, the S&P 500 Index dipped -0.7%, while the 10-year Treasury yield climbed 5.2 basis points to 3.937%, Kiplinger reported. However, biotech stock Amgen (AMGN) jumped 5.7%, which pushed the Dow Jones Industrial Average up +0.1%.
Shares of Lyft fell 12% on Tuesday, Uber dropped 10.4%, and DoorDash shed 6% on a proposed rule by the Labor Department that would have regulators and courts reclassify gig workers as employees rather than independent contractors. If deemed employees, the companies would have to provide workers with important protections such as healthcare benefits, overtime pay, and the ability to organize into unions, CNBC reported.
Three major automakers–Honda, GM, and LG–are making investments in battery technology for electric vehicles. Honda and LG are investing $3.5 billion in a new Ohio battery factory, which will have a planned capacity of 40 GWh/year of lithium-ion cells by the end of 2025, ARS Technica reported. The factory will be in Fayette County, Ohio, about 40 miles (64.4 km) southwest of Columbus.
GM is investing up to $69 million in Queensland Pacific Metals of Australia. Specifically, GM is interested in the company’s Townsville Energy Chemicals Hub (TECH) Project to build a battery materials refinery specializing in nickel and cobalt in northern Australia. Both of those metals are critical to making EV batteries, the Detroit Free Press reported.
Delta Air Lines announced it is investing $60 million for a 2 percent stake in Joby Aviation, a startup that hopes to build electric helicopter-like air taxis to ferry passengers to the airport. Delta says if the manufacturer hits key milestones, it could invest up to another $140 million. Joby says it expects to begin flying in 2024, AP/ABC reported.
