Inflation accelerates in the US, Netflix partners with Microsoft and what matters in the market

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Inflation Accelerates in the US, and It Will Hurt Here Too

US consumer inflation accelerated to 1.3% in June and reached 9.1% accumulated over 12 months, the biggest annualized increase since November 1981.

In numbers: the rise was greater than that projected by analysts, who calculated an advance of 1.1% to June. In May, the index had risen 1%.

What explains: US inflation was pulled in June by fuel and food. Gasoline prices hit a record high $5 (R$ 27) per gallon (3.8 liters) in the month.

• The highest price level in 40 years is justified by heating demand and the job market in the country, energy and food made more expensive by the war in Ukraine and supply problems generated by the pandemic.

why it matters: Surprising inflation is likely to prompt the Fed to increase its dose of the bitter medicine of interest rates, and part of the market expects a 1 percentage point increase at the next meeting.

The movement has two impacts right away for Brazil and the rest of the world:

• Fears of a global recession are heightening, as higher interest rates in the US and elsewhere are likely to result in weaker economic activity worldwide.

What’s in the budget

Whey, off-type beans, cold cuts, chicken feet and other carcasses. Items that used to be discarded appear today on supermarket shelves and have become the only option for many Brazilians who are hungry.

What explains: food inflation has set the tone for the rise in prices this year and hits the poorest people hard, who spend most of their budget on food.

• This year alone, the strawberry rose 106%the potato 55%the onion 48% and milk 41%according to June IPCA data.

Hungry Millions: in Brazil, about 3 out of every 10 inhabitants (61.3 million) live with some type of food insecurity, according to the UN, which places the country in fifth place in the world in this perverse ranking.

The survey covers the period from 2019 to 2021. It classifies insecurity into levels of intensity:

• Moderate, when people are uncertain about their ability to obtain food and reduce the quality or quantity of food they consume.

In Brazil, 15.4 million were in the severe food insecurity category from 2019 to 2021.

Netflix hires Microsoft for ad plan

Netflix announced this Wednesday (14) that it chose Microsoft as a partner to put its cheapest subscription plan and with ads into play.

The company founded by Bill Gates will be responsible for developing the technological tool and connecting advertisers to the platform.

Remember: Once totally averse to putting ads on its stream, Netflix gave in after it lost subscribers in a quarter for the first time in ten years.

Twitter strikes back

In response to Musk’s announcement that he was backing out of buying Twitter, the social network sued the billionaire for breach of the agreement.

The company says in the 62-page document that the Tesla owner’s allegations are baseless and that he must complete the $44 billion deal.

Twitter’s arguments:

“Irrational demands”: the main reason Musk cited for backing out of the deal was that the network was unable to prove that the number of fake accounts and spam was less than 5% of users.

• The network says it has fulfilled some of its requests for data from the platform, but that the billionaire’s demands have become increasingly irrational.

• The “material adverse effect” clause used to derail the deal is untenable, according to Twitter, because records claimed the 5% of fake accounts was an estimate.

“Business was carried on in a normal way”: Musk also said that Twitter failed to live up to the deal by slowing hiring and firing two executives. The network claims he knew about all these moves.

“The one who violated the agreement was Musk”: under the contract, the billionaire could not publicly disparage the company or employees. The social network attached to the process a tweet from Musk in which he responds to the company’s CEO with a poop emoji.