2024-07-26 17:15:50
Today’s headlines
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France’s high-speed rail network was hit by a destructive attack hours before the opening ceremony of the Olympics, suspending high-speed rail services across much of the country. Sales at Parisian pubs, shops and other small businesses fell sharply as passenger traffic dwindled ahead of the Games.
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According to the Federal Reserve’s preferred inflation indicator, the US inflation rate fell to 2.5% in June this year, which means that the Fed will cut interest rates at least once this year.
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Chancellor of the Exchequer Rachel Reeves is expected to reveal on Monday a £20 billion hole in the public finances, which she says is the result of the previous government’s failure to properly manage government finances.
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Good evening.
This is another important week in American politics.
At first, the mood among Democrats was gloomy as President Joe Biden gave up his reelection bid and his rival Donald Trump topped the polls after escaping an assassination attempt. In the end, Biden’s successor, Kamala Harris, breathed new life into the Democratic Party and received a big boost in the polls. But what would a Harris presidency mean for the economy and business?
As Biden’s vice president, Harris has been a strong supporter of Biden’s efforts to reduce inflation and has said lowering the price of gasoline and other everyday costs is a “number one priority.”
She also supports Biden’s efforts to increase infrastructure investment and accelerate the transition to green energy. She is particularly focused on the care economy, pushing for access to affordable child care and better treatment for seniors. She also supports tax credits for low-income people and raising taxes on the wealthy.
On trade, Harris insists she is “not a protectionist Democrat,” but she opposes deals such as the Trans-Pacific Partnership because of their lack of environmental protections. However, she strongly opposes Trump’s plans to impose sweeping tariffs, arguing that they would hurt consumers.
Her top economic advisers include Mike Pyle, formerly BlackRock’s industrial policy lynchpin, and Deanne Millison, a small business advocate at Ford. (You can read more in our Who’s Who of Kamala’s Team.)
Harris has many supporters on Wall Street, including veteran trader Blair Effron and Blackstone President Jonathan Gray, and in tech, including Microsoft’s Brad Smith and former Meta executive Sheryl Sandberg. She also has many supporters in Hollywood (her husband, Doug Emhoff, is not only a California native but also a highly regarded entertainment lawyer).
Meanwhile, traders have been adjusting their bets since J.D. Vance was confirmed as the Republican vice presidential nominee and Harris was confirmed as the Democratic nominee.
In addition to being a reelection candidate, many prefer Harris’s thoughtful approach to Vance’s anti-corporate, populist, and isolationist rhetoric. Some even think she might replace Lina Khan as FTC chair with someone more transactional, especially on antitrust issues.
Harris’s confident start has boosted her poll numbers, but while she continues to gain support, including a belated endorsement from the Obamas today, she still faces a tough task to defeat Donald Trump, according to new analysis by Financial Times journalist John Burn-Murdoch.
“Harris is more powerful than Biden, but she would still lose if the election were held today,” he wrote. “To win in November, she must walk a careful line to win over the remaining undecided candidates without alienating others.”
Harris’ next big move is choosing a running mate. The favorites are three governors: Josh Shapiro of Pennsylvania, Gretchen Whitmer of Michigan and Andy Beshear of Kentucky. However, in today’s Swamp Notes newsletter (for premium subscribers), American National Editor Edward Luce argues that the smart choice is Biden’s Transportation Secretary Pete Buttigieg.
Need to know: UK and European economies
New UK government announces partnership with state-owned enterprises GB Energy and the Crown Estate, which manages the land and seabed assets left by the monarch, to accelerate the construction of offshore wind turbines.
Our latest Big Read survey RussiaThe consumer economy is booming. Huge government spending and a labor shortage have caused real wages to soar, but economists say the party may soon be over.
Separate investigation France and Germany This pointed to a sharp drop in business confidence, raising concerns that the euro zone’s two largest economies are about to fall into recession.
Need to know: Global economy
this U.S. economy In the second quarter, China’s economic growth rate was much better than expected, reaching 2.8%, a significant increase from 1.4% in the previous three months.
Chinese young people There is great anger over the proposal to raise the retirement age.
BangladeshSouth Korea’s garment industry has been thrown into turmoil as authorities imposed curfews and communications blockades to quell student protesters, forcing factories to close and disrupting shipments to the world’s second-largest clothing exporter.
Indonesia The United States is trying to reduce Chinese investment in new nickel mining projects to help the country’s nickel mining industry obtain U.S. tax breaks. Thanks to a huge influx of Chinese capital, the country has become the world’s largest nickel ore supplier.
Do Taylor SwiftCan a concert tour really bring hundreds of millions of dollars to a country’s economy? Financial Times editorial writer Tej Parikh writes that this misunderstanding highlights our tendency to value what is visible and ignore what is hidden.
Need to know: Business
EU drug regulator rejects breakthrough Alzheimer’s disease Drugmakers Eisai and Biogen launched a treatment with warnings of a rare side effect of brain swelling.
Open AI Launched SearchGPT, a challenge to Google’s $175 billion-a-year search business. It was developed based on feedback from publishers OpenAI has recently signed up with, including News Corp and the Financial Times.
this European Central Bank The Bank for International Settlements has found “deficiencies” in its first review of banks’ ability to defend themselves against cyber attacks.
Declining profits Strantis and NissanFalling shares in the two largest automakers added to concerns that the global auto industry is heading for a recession, a problem that both companies have blamed on growing competition in the United States and slowing sales of electric vehicles.
A fierce legal battle is underway. Murdoch’s Previously, media tycoon Rupert Murdoch handed control of his family trust to his eldest son Lachlan.
American Airlines and Southwest Airlines The move comes as the latest airline to cut its profit forecasts as falling airfares due to overcapacity fuelled fears that the era of “revenge travel” is coming to an end.
Scientific review
Number of workers affected by the “invisible killer” Extremely hot The United Nations said temperatures in Europe and Central Asia have risen by nearly a fifth since 2000, with the world experiencing its hottest weather this week. On Monday, the global average surface temperature reached 17.16 degrees Celsius.
international ocean Absorbing 90% of the excess heat of the industrial age and a quarter of human-generated carbon dioxide, The Big Read discusses whether they have reached the limits of their crucial role in protecting the planet.
Seabed metals coveted by mining companies could generate electricityDark OxygenThis will fuel debate about the impact of commercializing the seabed, new research suggests.
Artificial intelligence helps achieve breakthroughs in long-range precision strikes weather The Google-led NeuralGCM model successfully combines artificial intelligence with traditional atmospheric physics models to track climate trends and extreme weather events over decades.
Breakthroughs in artificial intelligence also provide opportunities for advanced robot This could transform healthcare and manufacturing.
In more depressing AI news, new research highlights how using computer-made “Synthetic Data” to train AI models can lead to meaningless results.
GlaxoSmithKline Shinglix The shingles vaccine is the latest drug to show promise in treating previously untreatable brain diseases such as dementia.
Some good news
A child who had to have his eyes removed due to a rare cancer has had his eyes removable Specially designed prostheses Used by experts at Liverpool Hospital using the latest 3D technology.
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