Trouble reading this briefing? View as webpage.

Surprise cut.

From Zurich to London to Washington, the great inflation scare that gripped the world economy after the Covid pandemic is suddenly no longer keeping central bankers up at night as the prospect of rate cuts become real. The Swiss National Bank unexpectedly slashed its key interest rate by 25 basis points, moving months ahead of global peers. The SNB’s move foreshadows possible easing later this year by the Federal Reserve and European Central Bank. Mexico's central bank also cut interest rates in a split decision on Thursday.

Apple scrutiny | Regulators on both sides of the Atlantic are training their eyes on Apple, unnerving investors with fears over fines and threatening its market dominance. In the US, the Justice Department and 16 attorneys general sued the iPhone maker for violating antitrust laws. The company is also said to be facing probes about whether it’s complying with the Digital Markets Act in the European Union, with Alphabet’s Google also said to be in the spotlight there. Apple shares slid more than 4% Thursday, erasing about $113 billion in market value. It’s not the first time Apple has come under regulatory scrutiny and major tech companies in general have for years faced accusations of enriching themselves by suppressing competitors. But as Apple’s products have grown ever-more popular, authorities have also become more combative and wary of its power. Apple fired back at the US lawsuit by calling it “wrong on the facts and the law.” The company didn’t respond to a request for comment on the potential European probes.

Up & coming | Japanese inflation will be in the frame Friday following this week’s move by the Bank of Japan to scrap its negative rate and yield curve control policies. Unlike many other parts of the developed world, the current shift in monetary policy in Japan is being prompted by an acceleration in inflation rather than a calming of price pressures. BOJ Governor Kazuo Ueda said the central bank scrapped its massive easing program this week partly to avoid the need for aggressive action later. Waiting to completely confirm stable inflation would have greatly raised upside inflation risks, Ueda said Thursday in response to questions in parliament. Economists surveyed by Bloomberg predict that data for February will show the pace of Japanese consumer price gains increasing to 2.9% year-on-year from 2.2% a month earlier.

Photo: Getty Images

Magnificent Seven? It’s starting to look more like the Tremendous Two.

For more than a decade, the stock market has been supercharged by a handful of technology behemoths: household names such as Google parent Alphabet, Amazon.com, Apple, Facebook parent Meta, Microsoft, Nvidia Corp., Tesla. Grouped under various acronyms that played off their corporate monikers — FANG, FAANG, MAMAA — these companies became a staple of just about everyone’s portfolio. But this year, the Magnificent Seven has looked more like the Magnificent Two, the Middling Two, and the Meh Three. (Bloomberg Businessweek | Mar 21)

Yellen hearing foreshadows tax policy battle as cuts expire

Treasury Secretary Janet Yellen testified Thursday at a congressional hearing that presaged a partisan battle over tax policy in the coming election, with sweeping reductions set to expire at the end of next year. Yellen reiterated, under questioning at the Senate Finance Committee, that President Joe Biden supports extending income-tax reductions for those earning less than $400,000 a year. (Bloomberg Politics | Mar 21)

Real estate pain is showing up in an obscure investment product.

An obscure investment product used to finance risky real estate projects faces unprecedented stress as borrowers struggle to repay loans tied to commercial property ventures. Known as commercial real estate collateralized loan obligations, or CRE CLOs, they bundle debt that is usually considered too speculative for conventional mortgage-backed securities into bonds of varying risk and return. (Bloomberg Markets - Real Estate | Mar 19)

The US pushback against ‘Basel Endgame’

Since late July, when US banking regulators unveiled plans that they say will make banks safer, the issue has been forced into the mainstream like never before. Opponents warn of dire consequences for “everyday Americans” if the authorities push ahead with reforms that are officially known as “the finalization of Basel III” but have been apocalyptically termed “the Basel Endgame” in the US. Both monikers refer to the Swiss city in which the committee that formulates the rules meets. (Financial Times | Mar 19)

Index providers are massively dull — and massively profitable

It’s a fun fact that one of the best-performing investors in the world is the S&P 500 index committee. Over the past 20 years, their picks have now beaten 97 percent of all US equity funds. However, this trivia obscures a broader phenomenon: indexing has become a huge, profitable, and influential business, utterly dominated by a small cabal of companies. What were once fairly rough measures of financial markets — often calculated with slide rules by a few niche newspapers as a dull but worthy service to readers — now exert power over them. (Financial Times | Mar 19 | free link)

Tech companies are protesting Apple’s plan to charge a commission for payments made outside the app store. Photo: Andy Wong | Associated Press

Big tech companies take aim at Apple's app store

Apple faces legal protests from Meta, Microsoft, X, Spotify, and Match. The companies filed legal petitions protesting Apple’s app store policies, objecting to how the tech giant has complied with a federal court ruling that ordered Apple to allow alternative payment methods. Apple has defended its right to charge the fees, saying it invests in privacy and security measures that protect users.

— The Wall Street Journal

LockBit’s leader remains defiant, vows to keep hacking

In a rare interview with the purported leader of the LockBit ransomware group, LockBitSupp — the name he goes by — said he’s under pressure because last month an international police operation infiltrated the group and seized not just their platform, but their hacking tools, cryptocurrency accounts and source code ending a four-year ransomware rampage. Officials had “hacked the hackers,” he said, adding that the fiercest ransomware gang was now “fundamentally disrupted.”

— The Record

CISA, FBI, MS-ISAC release guidance on DoS techniques

CISA, the Federal Bureau of Investigation, and the Multi-State Information Sharing and Analysis Center released an updated joint guide, Understanding and Responding to Distributed Denial-Of-Service Attacks, to address the specific needs and challenges faced by organizations in defending against DDoS attacks. The guidance now includes detailed insight into three different types of DDoS techniques:

• Volumetric: attacks aiming to consume available bandwidth.
• Protocol: attacks which exploit vulnerabilities in network protocols.
• Application: attacks targeting vulnerabilities in specific applications or running services.

Read more.

Lee So-hee has brought along her pet rock on trips. Photo: Lee-So-Hee | The Wall Street Journal

Overworked South Koreans unwind with pet rocks — 'Like talking to your dog'

Pet rocks, a kooky and best-forgotten fad of 1970s America, are resurfacing in South Korea. Unlike the stone-in-a-box craze nearly five decades ago, the sequel is more about serenity than shtick. South Koreans, who endure one of the industrialized world’s longest workweeks, have a tradition of unwinding in unusual ways. They have lain in coffins for their own mock funerals, checked into prison to meditate and gathered in a Seoul park each year for a “space-out” contest.

— The Wall Street Journal

The mutual fund at 100: is it becoming obsolete?

Today, the mutual fund’s dominance is under threat from newer rivals that promise tax advantages, lower fees and rapid trading. US mutual funds suffered more than $1 trillion in net outflows from January 2021 to December 2023. While they gathered about $13 billion in net inflows in February, it was the first time they had a positive month in two years, according to Morningstar, a data group.

— Financial Times (free link)

How the top oil trader's brazen corruption was caught on tape

The landmark trial of a former Vitol trader has shone an unprecedented light on wrongdoing in the global commodity trading industry. The trial of former Vitol oil trader Javier Aguilar has shone an unprecedented light on wrongdoing in the global commodity trading industry. As this compelling Big Take reports, the case brought to life the inner workings of a modern-day bribery scheme in more detail than ever before, in a world that’s long been known for backhanders and brown envelopes.

— Bloomberg