The World
The U.S. presidential debate turned into chaos, as global banks are preparing for the possibility that there will be no clear victor on election night, a scenario that could spark days or weeks of chaos in global equities and fixed income markets. Over the past two weeks, major banks have run simulations to ensure they could cope with a spike in market, liquidity and credit risks, and have been advising clients on precautionary hedges and capital raising strategies. Meanwhile, the debate was seen as a “live quarrel” on China’s internet: “I would feel desperate if I was an American,” one Weibo user said. China watchers further noted that there were not many “back-and-forth exchanges on China … despite both candidates choosing to focus on China as their top foreign policy issue.” (New York Times, Reuters, South China Morning Post)
The U.S. is stepping up scrutiny of past Chinese investments in U.S. tech start-ups, sending a flurry of inquiries about deals that are at times years old. The requests come from the Committee on Foreign Investment in the United States’ new enforcement arm, which monitors foreign investment for national-security risks. Meanwhile, China launched a new maritime patrol vessel — the largest and most advanced to join its civilian fleet. (Washington Post, South China Morning Post)
U.S. private payrolls accelerated in September, while pending home sales rose 8.8% in August compared with July, reaching a record high pace — 24.2% higher than August 2019. Meanwhile, the ECB will consider allowing inflation to exceed its target, in a shift to average inflation strategy would follow in the U.S. Fed’s footsteps. (Reuters, CNBC, Financial Times)
About 85-90% of the American population is still susceptible to the coronavirus, meaning that “herd immunity” is still very far off — while the CDC reports that as colleges reopened, many more young people got covid-19, and the NFL postponed Sunday’s Steelers-Titans game. In Russia, the Duma went partially remote after 18 deputies were hospitalized with the coronavirus. Germany is limiting public events to 50 people. Scotland hit a new high for daily positive tests, putting Britain on red alert. (New York Times, Washington Post, NFL, Moscow Times, DPA International, The Times)
Office buildings’ ventilation systems — designed to keep temperatures comfortable and increase energy efficiency — may increase the risk of coronavirus exposure. (University of Cambridge)
As the long-“frozen” conflict between between Azerbaijani and Armenian forces flared back to life, the situation has been made more complex by the intervention of Turkey — which is accused of shooting down an Armenian warplane. Syrian rebel fighters have signed up to work for a private Turkish security company as border guards in Azerbaijan. The potential deployment is a sign of Turkey’s growing appetite for projecting power abroad, and opens a third theatre in its regional rivalry with Moscow. (Washington Post, The Times, Globe & Mail, The Guardian)
The worst is yet to come: The Greenland Ice Sheet is on track to melt faster than at any time since the Earth was last as warm as it is today — roughly 12,000 years ago — as scientists warn the only way to avoid a drastically accelerated meltdown is to curtail emissions of greenhouse gases in the near-term. (Nature, Washington Post)
Economy
A dealmaking rebound drove the busiest summer for M&A on record. 36 deals worth $5bn-plus were unveiled in 3Q20. Private equity groups accounted for 15% of all M&A activity in the first nine months of the year, the highest proportion since the boom in leveraged buyouts in the run-up to the financial crisis in 2007. Global M&A soared 80% between Q2 and Q3, hitting a disclosed value of $1 trillion. Tech and health care deals led. For the year, M&A volume remains well below the first nine months of 2019.
Private equity deal value is off 5.6% year-to-date, but the number of PE deals is up 7.8%. In both cases, PE’s percentage of global M&A is higher than through the first three quarters of 2019. (Financial Times, Axios)
More stocks skyrocketed at least 400% at some point in the first three quarters of the year than in any comparable period since 2000. So far this year, Zoom Video Communications has rallied 584%, while online retailer Overstock has advanced 978% — and at one point was up 1,677%. Tesla has gained 401%. To compare, the S&P 500 is up 3.2% for the year, while the DJIA is down 3.8%. Both indexes are on pace for 3Q20 gains of more than 6%. (Wall Street Journal)
This year ranks as one of the best on record for investors in gold. Meanwhile, gasoline demand in the U.S. has flatlined for much of 3Q20, keeping crude-oil prices near $40 a barrel and challenging the global energy industry heading into the final months of the year. (Wall Street Journal, Wall Street Journal-2)
Disney will lay off 28,000 workers at its U.S. theme parks, from Disneyland — which California hasn’t yet let reopen — to Walt Disney World in Orlando. Airlines are hours away from cutting more than 30,000 jobs without billions more in federal aid. Royal Dutch Shell is to axe up to 9,000 jobs over the next two years. (Los Angeles Times, CNBC, The Times)
Technology
Google is expected to win EU approval of its $2.1 billion Fitbit deal, after making three concessions: It wouldn't use Fitbit's data for ad targeting for 10 years, rather than the initially proposed 5 years; third-party wearables would have access to Android APIs; and third-party apps could continue to use Fitbit users' data, if they consented. Meanwhile, the U.S. case against Google is expected next week, while China is preparing a separate antitrust investigation into Google. (Engadget, Protocol, Financial Times, Reuters, Reuters-2)
Apple and Epic agreed that their coming court battle should be decided in a bench trial by a judge, not a jury. Apple previously pushed for a jury trial, but has withdrawn the request to streamline proceedings. (Apple Insider)
Apple awarded CEO Tim Cook new equity awards that could provide him with as many as 1 million shares by 2025. Potential payday: $76-$114 million, depending on Apple’s share performance. (Bloomberg)
Seattle became the second big U.S. city to establish a minimum wage standard for Uber and Lyft drivers, as the Seattle City Council unanimously voted to ensure they earn the city’s $16.39 per hour minimum wage. (GeekWire)
Employers are launching Zoom-free days: From tech startups to sprawling hospitals, businesses say they are trying to dial back time employees spend in remote meetings after realizing that hours spent on video calls every day have taken a toll. (Wall Street Journal)
Amazon unveiled “Amazon Explore,” a new tech platform and marketplace that offers access to live virtual experiences with tour guides, store owners and other local experts in countries globally. A public beta of the service launched Amazon’s US customers, who can request an invite for access to buy the virtual experiences. Meanwhile, new reporting states that internal records show Amazon has deceived the public on rising injury rates among its warehouse workers. (GeekWire, Reveal)
Smart Links
In financial services, branch managers are a powerful predictor of fraud. (MIT Sloan)
The pandemic pushed universities online. The change was long overdue. (Harvard Business Review)
With election looming, U.S. VCs and PE professionals lean more Democratic than usual. (Crunchbase)
What AI can — and can’t — do in the coronavirus vaccine race. (IEEE Spectrum)
Austin emerges as a hot spot for Silicon Valley investors. (The Information)
Applicants flock to elite business schools amid extended deadlines, test waivers & recession. (Wall Street Journal)