China’s high-quality development challenge
When China finally lifted Covid restrictions last year, policymakers and companies hoped it would help lift the global economy out of its post-pandemic recession. But data released on Monday showed hopes for a recovery in the world’s second-largest economy are still unfulfilled, raising wider questions about global growth, the impact on international trade and China’s dealings with the outside world. went.
Gross domestic product increased by only 0.8 percent Falling exports, weak consumer spending and a stagnant property sector weighed on the economy in the second quarter compared to the first three months of the year, according to official data.
Disappointing data hit commodities and stocks this morning, with Brent crude falling to a one-week low and shares of China-dependent luxury groups LVMH and Richemont opening sharply lower. Shortly after, Morgan Stanley and Citigroup Cut your full year growth forecasts to China.
The real story is found beyond the headline numbers. Monday’s data showed business last month posted its worst year-on-year decline since the start of the pandemic, partly as Western consumers cut back on purchases as central banks raised rates. This added to the pressure on manufacturers as companies seek to shift their supply chains away from China amid geopolitical tensions and talk of “de-risking”.
“If China can’t change its growth model, it won’t change the pressure on the economy or living standards,” George Magnus, a fellow at Oxford University’s China Center and former chief economist at UBS, told DealBook. “The focus has shifted to quality of development rather than quantity, but here too Xi Jinping’s China is far behind.”
Will this make China more willing to engage with the West? Beijing is sending mixed messages. Senior officials have in recent months launched an offensive targeted at international business leaders. But last week, Chinese state media Goldman Sachs criticized The Wall Street firm recommended selling shares in local banks because of risks to the domestic economy.
what next? Group of 20 central bankers and finance ministers is Meeting in India this weekWith this data, their concerns about the state of the global economy have increased. Some pessimists say the Chinese economy has done spiked And a significant recession is coming. Although Chinese policy-makers often point out that it took about a year for the West to begin to recover after Covid, so there is still a possibility that things could turn this year, Michael Pettisa finance professor at Peking University told DealBook.
But, Mr. Pettis said, international investors need to look at China differently than they have in the past. “While China was growing at double-digit rates, the poorer parts of the economy were growing as well,” he said. “Now, the China story is over and it looks like a more normal economy. Some sectors will do well, some will do very poorly.
What’s going on over here
Russia pulls out of Ukraine grain export deal. Moscow’s move to suspend participation in the accord, which allows Ukrainian wheat to move out of the country despite a wartime blockade, could push up global food prices again. Russia has complained that the deal, which was due to expire on Monday, was too favorable to Kiev.
Microsoft agrees to cease-fire with Sony over Activision Blizzard acquisition. Microsoft agreed to keep Call of Duty Available for 10 years on Sony’s PlayStation After the US company closed its $70 billion acquisition of Activision Blizzard, one of the biggest disputes on the deal has been resolved. It’s the latest victory for Microsoft, as a federal judge last week refused to further delay its ability to complete the transaction.
United Airlines has signed a $10 billion settlement with its pilots. Four year agreement sought increase in salary of pilots Discounts of up to 40.2 per cent on the duration of the contract, along with improvements in work rules, job security and more. It is the richest labor agreement ever reached at an American airline.
The head of the Teamsters asked President Biden not to interfere in the UPS labor talks. Union leader Sean O’Brien said he had asked the White House to do so stay away from fighting it with the logistics giant after talks failed this month. The current contract expires on July 31; Stuck points include a proposed wage increase for part-time drivers.
The 2024 Dilemma of Political Donors
As the presidential race heats up, many wealthy Democratic supporters have complained about a lack of enthusiasm for President Biden. But the Biden campaign recently announced that it raised more than $72 million in the second quarter — far more than the amount collected by Donald Trump and other Republican candidates.
Democratic officials touted the news as a sign that the party’s donor class was on board. But some in politics are wondering whether Mr. Biden did so well simply because no clear winning alternative to Trump has yet emerged.
Mr. Biden had overwhelming support from major donors. Ten gave $500,000 or more to the Biden Victory Fund, including Hollywood mogul and his re-election campaign co-chairman Jeffrey Katzenberg; LinkedIn co-founder Reid Hoffman; and Stewart Bainum, a hotelier. Other major gainers include Twilio co-founder John Wolthuis ($300,000) and OpenAI chief Sam Altman ($200,000).
Mr. Biden has some reasons to be worried. Small donors – who are considered vital to the success of a campaign, as larger donors can quickly exceed donation limits – have lagged behind in giving. and Senator Joe Manchin, a West Virginia Democrat who has clashed with Biden over climate policy, Leaving for New Hampshire on Monday for a town hall hosted by No Labels, a group searching for a third-party presidential candidate.
In addition, DealBook still hears concerns from deep-pocketed potential donors about Biden’s age and complaints about his administration’s sometimes indifference to Wall Street, which has been slow to support him even in 2020. Was.
(Although financiers have grumbled about parts of Mr. Biden’s economic approach, including his adoption of stricter antitrust enforcement, they may be pleased by the reduction in inflation and the lower likelihood of a recession.)
Compare this to the Republican field:
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Florida Governor Ron DeSantis Draws support from veteran donors These include financier Paul Tudor Jones, industrialist Dick Uyhlein and venture capitalist Joe Lonsdale.
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other Republican candidates who have his own big supporters Vivek Ramaswamy (Bill Ackman, Glenn Dubin and Ed Hyman of Evercore ISI), Nikki Haley (Cliff Asnes and Tim Draper), Chris Christie (Lew Eisenberg) and Senator Tim Scott (Larry Ellison).
But other than Mr. DeSantis, who raised $20 million during the quarter, none came close to the $35 million raised by Mr. Trump during that period; They also go after him badly in public elections. Mr. DeSantis also faces other issues: His campaign has run short of staff amid huge spending, and many of its donors have already given as much as they can.
It is unclear where else the donors will go. Rupert Murdoch has privately told aides that he wants Virginia Governor Glenn Youngkin to run, although Mr Youngkin’s support strict restrictions on abortion His appeal among some big donors could be hurt.
And while some moguls have drawn to Robert Kennedy Jr., who is challenging Mr. Biden for the Democratic nomination, his divisive views on vaccines and the coronavirus — most recently expressed in a fanciful conspiracy-filled rant — have left him politically vulnerable. Kryptonite can be made.
The rising cost of extreme weather
This summer’s weather is turning out to be especially dramatic, and sometimes deadly, as record-setting temperatures and violent storms continue to affect much of the planet. It can have equally serious consequences on the lives and livelihood of the people.
July has already set a global record for the warmest day ever, There is no relief in sight. New heights can be touched at many points around the world, from california to Phoenix Southern Europe and beyond. Much of the blame is being given to the return of the El Nino weather phenomenon.
It’s not just extreme heat. A severe typhoon warning forced Hong Kong’s stock exchange operator stop trading this morning, Torrential rain ravaged the northeastern United States again this weekend, as flash floods outside Philadelphia killed five people, and New Jersey declared a state of emergency due to flight cancellations, power outages and submerged roads. Was forced to declare the status of
Economists are giving warnings about the weather given that it is hit small businesses DIfficulty. In tourism-dependent Italy, the country’s health minister, Orazio Schillaci, warned Italians to stay indoors during the hottest hours of the day, and warned tourists avoid going to hot places Like the Colosseum in Rome.
“A common theme in El Niño events is higher inflationary pressures as a result of higher commodity prices,” Henry Allen, strategist at Deutsche Bank, wrote in an investor note last month. Rising food prices could make the central bankers’ fight against inflation even tougher.
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In other climate news: Hank Paulson, the former Treasury secretary, warned that efforts to fight climate change, including greater use of solar and wind power, should not yield the results he ” global decline of biodiversity,
coming week
Fed officials remain calm ahead of next week’s big rate-setting meeting, but there are plenty of other developments on the calendar. Here’s what to expect.
Tuesday: Bank of America, Morgan Stanley and Charles Schwab reported earnings. Also, the retail sales data for June is also due to be released.
Wednesday: ASML, Goldman Sachs, Netflix, Tesla and United Airlines disclosed the results. Britain, which is suffering from particularly high inflation, has released price data for June.
Thursday: American Airlines, Johnson & Johnson and Truist Financial, one of the regional lenders most affected by the collapse of Silicon Valley Bank, are set to report earnings.
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investors have withdraw 717 million dollars In the past year from the flagship index fund run by Cathy Wood, the financier whose focus was on growth stocks has boosted its returns in recent years — and then cratered. (WSJ)
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Ken Griffin-run financial giant wants Citadel Disrupt a $10 Trillion Market in the trading of US corporate bonds. (ft)
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