Ships Reroute Around Africa as Suez Canal Stays Blocked: Live Updates

Shipowners are beginning to reroute ships bound for the Suez Canal around Africa’s Cape of Good Hope, a costly alternative to avoid the logjam of vessels caused by the giant container ship blocking the canal.

There are growing signs that the effort to dislodge the ship, Ever Given, may take many days if not weeks. Already, more than 100 vessels are stuck at either end awaiting clear passage.

When deciding whether to divert, a shipping company will weigh the likely cost of sitting for days outside the canal versus the added time of steaming around Africa. It is not an easy choice.

“It is like choosing the queue at the post office; it is never the right decision,” said Alex Booth, head of research at Kpler, a firm that tracks petroleum shipping.

Already, seven giant carriers of liquefied natural gas appear to have decided to change course away from the canal, according to Kpler.

One of these ships, chartered by Royal Dutch Shell, had picked up a cargo of gas at Sabine Pass in Texas and was heading toward the canal when it made a sharp turn in the Atlantic Ocean toward Africa. Another, operated by Qatargas, a state energy company, loaded at Ras Laffan, the Qatar energy hub, and headed for Suez but then veered away toward the Cape of Good Hope before reaching the Red Sea.

Container ships are also changing their plans. HMM, a Korean shipping company, ordered one of its vessels that was headed to Asia from Britain via the canal to go around Africa instead, according to NOH Ji-hwan, a spokesman for the company.

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Mr. Booth figures that it would be unlikely for a ship that is already waiting at the canal to backtrack all the way around Africa. That would mean a nearly six-week journey to reach Amsterdam in the Netherlands compared with just 13 days from the canal.

If the call is made in the early part of a journey, though, it may make sense. For instance, Kpler estimates that a trip around the cape from the Saudi oil terminal Ras Tanura would require 39 days, versus 24 days by way of Suez.

Personal income and spending dipped last month as the effects of stimulus checks faded following a big jump in January, but both are expected to rebound as another round of federal payments arrived in March.

The government reported on Friday that personal income fell 7.1 percent in February from the previous month, while consumption dropped by 1 percent. Powered by $600 checks to most Americans from a December relief bill, income in January leapt by 10.1 percent, while consumption rose by 3.4 percent, a figure revised Friday from the originally reported 2.4 percent.

Despite the drop last month, a big pickup is expected in March with the arrival of $1,400 payments to most Americans from the $1.9 trillion relief package signed into law this month.

In the months ahead, most economists expect consumers to return in greater numbers to stores, restaurants and other gathering places as vaccination efforts gather speed and consumers put the stimulus money and lockdown-accumulated savings to work.

“In February, households were waiting for the bigger stimulus check coming in March and there will be a surge in consumer spending, particularly on services,” said Gus Faucher, chief economist at PNC Financial Services in Pittsburgh.

All of the drop in spending last month was for goods, Mr. Faucher noted, as consumers pulled back on buying big-ticket items like automobiles and appliances. Services should benefit in the coming months, he added, as people have more opportunities to go out and life increasingly returns to normal more than one year after the pandemic hit.

“Consumer spending will be very strong for the remainder of this year and into 2022,” Mr. Faucher added. “There’s a lot of money saved up.”

In another sign of optimism, the University of Michigan reported Friday that its index of consumer sentiment rose to the highest level since the pandemic began.

Economists have improved their forecasts for U.S. economic growth, with Bank of America foreseeing a 7 percent increase this year in gross domestic product.

Stocks rose on Friday, along with government bond yields, amid a bout of optimism about the economic recovery.

On Thursday, President Biden said he wanted the United States to administer 200 million vaccines by his 100th day in office, on April 30, a target the country is already on track to meet. The Federal Reserve vice chair, Richard Clarida, pushed back on concerns that the government’s spending plans would fuel higher sustained inflation.

In a victory for financial institutions, the central bank said that pandemic-era rules that restricted share buybacks and dividend payouts by banks would end midway through 2021 for most firms. On the economic front, gross domestic product data for the fourth quarter was also revised slightly higher on Thursday.

Stocks & Bonds

• The S&P 500 index rose nearly half a percent in early trading, on track to end the week with a small gain. Bank stocks fared better than the broad market, with the KBW Bank index up about 1.5 percent.

• The Stoxx 600 Europe rose 0.6 percent, set for a fourth
  consecutive week of gains.

• The yield on 10-year Treasury notes rose 4 basis points, or 0.04 percentage points, to 1.67 percent.

Economic data

• Personal income and spending in the United States dipped last month as the effects of stimulus checks faded following a big jump in January, but both are expected to rebound as another round of federal payments arrived in March.

• Retail sales in Britain rose 2.1 percent in February, rebounding from a slump of 8.2 percent the month before, when the country entered a third national lockdown.

• A survey of German business expectations rose to the highest level in nearly three years.

Oil

• Oil prices rose with futures of Brent crude, the global benchmark, climbing 1.7 percent to $63 a barrel.

The thrift-store start-up ThredUp on Friday will become the latest clothing resale website to become publicly traded, a move that seeks to take advantage of a growing interest in secondhand retailers among young shoppers.

The company sold 12 million shares for $14 each in its initial public offering, raising $168 million and valuing the business at $1.3 billion.

Founded in Oakland in 2009, ThredUp built its inventory by sending prepaid packages, or “clean out kits,” to sellers, who fill the bags with used clothes and accessories and mail them back.

The website joins Poshmark, which went public in January, and The RealReal, which went public in 2019, on the Nasdaq stock market.

The three companies are all leaders in secondhand shopping, but they take different approaches to resale. The RealReal consigns high-end brands exclusively. Poshmark allows sellers to directly list their items. ThredUp has formed partnerships with brands including Gap, Walmart and Macy’s, helping these large retailers incorporate resale into their stores and e-commerce platforms.

All three emphasize the environmental benefits of resale — but ThredUp more so than its competitors. The company refers to itself as a “force for good” and has criticized the fashion industry’s carbon footprint, including by writing open letters to luxury brands like Burberry that have burned their unsold inventory.

James Reinhart, the chief executive and a co-founder of ThredUp, said Thursday that the company was “ushering in a more circular future for fashion by helping new waves of consumers, brands and retailers take steps toward sustainability.”

With the retail analytics firm GlobalData, ThredUp also publishes a widely cited annual “Resale Report,” which tracks growth of the secondhand market. By the end of 2021, the market value of online resale is estimated to grow to $12 billion, up from $7 billion in 2019, according to the last year’s report.

Much of that growth has been attributed to Generation Z’s preference for online shopping and passion for sustainability. ThredUp’s revenue was $186 million in 2020 (up from $163.8 million in 2019). It posted a net loss of $47.9 million last year.

Still, the company was not immune to retail’s upheaval during the pandemic, as detailed in a March filing with the Securities and Exchange Commission. Average monthly orders have now returned to prepandemic levels, ThredUp said, but the company has not “seen sustained growth” in the time since.

The National Labor Relations Board on Thursday upheld a 2019 ruling that Tesla had illegally fired a worker involved in union organizing and that the company’s chief executive, Elon Musk, had illegally threatened workers with the loss of stock options if they unionized.

The board ruled that the worker, Richard Ortiz, must be reinstated with back pay, and that Mr. Musk must delete his tweet. The company must also post a notice committing not to violate labor law in the future and announcing that it will undertake the mandated remedies.

Mr. Ortiz had been visibly involved in union organizing, including distributing leaflets in the parking lot of the company’s plant in Fremont, Calif., before he was fired in October 2017. The company said it fired him because he had posted screenshots of employees’ profiles in an internal platform to Facebook. An administrative law judge ruled that it was in retaliation for his organizing efforts.

The judge also found that the company had illegally issued a warning to another employee for taking the screenshots and sending them to Mr. Ortiz, a ruling that the board upheld on Thursday as well.

In May 2018, Mr. Musk posted his tweet, which included the clause, “why pay union dues & give up stock options for nothing?” Both the judge and the board deemed the post an unlawful attempt to coerce employees by threatening their compensation.

The board went further than the judge’s earlier ruling on some questions, finding that Tesla’s confidentiality agreement, which it required employees to sign, unlawfully prohibited them from speaking with the media about Tesla without authorization even if the material was public. The ruling on Thursday requires the company to amend its agreement.

Tesla did not respond to a request for comment.

Yields on 10-year Treasury notes have risen sharply in recent weeks, a sign that traders are taking the inflation threat more seriously. And if the trend continues, it would put bond investors on a collision course with the Biden administration, which wants to spend trillions more on infrastructure, education and other programs.

The potential confrontation made some market veterans recall the events of the 1990s when yields on Treasury securities lurched higher as the Clinton administration considered plans to increase spending, Nelson D. Schwartz reports for The New York Times. As a result, officials soon turned to deficit reduction as a priority.

Ed Yardeni, an independent economist, coined the term bond vigilante in the 1980s to describe investors who sell bonds amid signs of fiscal deficits getting out of hand.

“They seem to mount up and form a posse every time inflation is making a comeback,” Mr. Yardeni said. “Clearly, they’re back in the U.S. So while it’s fine for the Fed to argue inflation will be transitory, the bond vigilantes won’t believe it till they see it.”

Yet, evidence of inflation remains elusive, and the bond vigilantes remain outliers. Even many economists at financial firms who expect faster growth as a result of the stimulus package are not ready to predict inflation’s return.

Even if inflation goes up slightly, the Fed’s target for inflation, set at 2 percent, is appropriate, said Alan S. Blinder, a Princeton economist who was an economic adviser to former President Bill Clinton and a former top Fed official.

“Bond traders are an excitable lot and they go to extremes,” he said. “If they are true to form, they will overreact.”

A one-of-a-kind digital collectible item created out of a New York Times technology column sold for more than $500,000 in an auction, the first such sale in the history of the newspaper.

An image of the column — titled “Buy This Column on the Blockchain!” — was turned into a nonfungible token, or NFT, and sold in a heated auction that brought in more than 30 bids on the NFT marketplace website Foundation.

The NFT, a unique bit of digital code that is stored on the Ethereum blockchain and refers to a 14 megabyte graphic of the column hosted on a decentralized file hosting service, cannot be duplicated or counterfeited, making it potentially valuable for collectors. Some NFTs have sold for hundreds of thousands of dollars in recent weeks, with one such sale — a collection of art by the digital artist Beeple — bringing in more than $69 million at auction.

Along with the token, the winner of the auction — should they choose to identify themselves — will receive additional perks including a voice message from Michael Barbaro, the host of “The Daily” podcast. All proceeds from the auction will be donated to the Neediest Cases Fund, a Times-affiliated charity.

The winner of the auction, an NFT collector who goes by the handle @3fmusic, placed a last-minute winning bid of 350 ether, a digital currency, which translates to roughly $560,000 at Wednesday’s exchange rates. A link on the user’s profile led to the website of a Dubai-based music studio.

@3fmusic could not be reached as of Wednesday afternoon. The user appeared to be an avid collector of NFT artwork. In addition to the Times token, their collection on Foundation also includes such works as “The result of 2020,” an image of a sad-looking Kermit the Frog, and “Mushy’s Midafternoon Nap,” an image of a cartoon toadstool sitting on a log.

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Tech Executives Testify on Disinformation

Mark Zuckerberg of Facebook, Sundar Pichai of Google and Jack Dorsey of Twitter testified remotely before Congress on “misinformation and disinformation plaguing online platforms.”

“I don’t think anyone wants a world where you can only say things that private companies judge to be true.” “Our mission is to organize the world’s information, and make it universally accessible and useful.” “We believe in free debate and conversation to find the truth. At the same time, we must balance that with our desire for our service not to be used to sow confusion, division or destruction.” “There are two faces to each of your platforms. Facebook has family and friends, neighborhood, but it is right next to the one where there is a white nationalist rally every day. YouTube is a place where people share quirky videos, but down the street, anti-vaxxers Covid deniers, QAnon supporters and Flat Earthers are sharing videos.” “You’ve failed to meaningfully change after your platform has played a role in fomenting insurrection, and abetting the spread of the virus and trampling American civil liberties. And while it may be true that some bad actors will shout ‘fire’ in the crowded theater by promoting harmful content, your platforms are handing them a megaphone to be heard in every theater across the country and the world. Your business model itself has become the problem.” “How is it possible for you not to at least admit that Facebook played a central role or a leading role in facilitating the recruitment, planning and execution of the attack on the Capitol?” “Chairman, my point is that I think that the responsibility here lies with the people who took the actions to break the law, and take and do the insurrection and secondarily, also the people who spread that content, including the president, but others as well.” “Your platform bears some responsibility for disseminating disinformation related to the election and the ‘Stop the Steal’ movement that led to the attack on the Capitol. Just a yes or no answer.” “Congressman, it’s a complex question. We —” “OK, we’ll move on. Mr Dorsey.” “Yes, but you also have to take into consideration a broader ecosystem. It’s not just the technology platforms we use.” “We’re all aware of big tech’s ever-increasing censorship of conservative voices and their commitment to serve the radical progressive agenda by influencing a generation of children — removing, shutting down or canceling any news, books and even now, toys, that aren’t considered woke.” “First of all, do you recognize that there is a real concern, that there’s an anti-conservative bias on Twitter’s behalf? And would you recognize that this has to stop if this is going to be, Twitter is going to be viewed by both sides as a place where everybody is going to get a fair treatment?” “We don’t write policy according to any particular political leaning. If we find any of it, we route it out.”

Lawmakers grilled the leaders of Facebook, Google and Twitter on Thursday about the connection between online disinformation and the Jan. 6 riot at the Capitol.

Here’s what you need to know.

• Jack Dorsey, Twitter’s chief executive, said that the site played a role in the storming of the Capitol, in what appeared to be the first public acknowledgment by a top social media executive of the influence of the platforms on the riot. When a Democratic lawmaker asked the executives to answer with a “yes” or a “no” whether the platforms bore some responsibility for the misinformation that had contributed to the riot, Mr. Dorsey said “yes.” Neither Mark Zuckerberg of Facebook nor Sundar Pichai of Google would answer the question directly.

• As lawmakers on Thursday threatened to strip the liability protection encoded in Section 230 of the Communications Decency Act, the chieftains of the biggest social networks couldn’t agree on how to fix the act, or if it even needs fixing. Mr. Zuckerberg urged Congress to take on “thoughtful reform” of Section 230. He said the law needed to be updated for the modern age. Mr. Pichai said while regulation has a role to play in “addressing harm and improving accountability,” he cautioned that recent proposals to change Section 230 would have unintended consequences.

• Democratic lawmakers accused the chief executives of making money by allowing disinformation to run rampant online, reflecting their mounting frustration about the spread of extremism, conspiracy theories and falsehoods online in the aftermath of the riot at the Capitol.

• Republican lawmakers came into the hearing steaming about the Capitol riot, but their animus was focused on the decisions by the platforms to ban right-wing figures, including former President Donald J. Trump, for inciting violence. The decisions to ban Mr. Trump, many of his associates and other conservatives, they said, amounted to liberal bias and censorship.