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The World
US job openings dropped to the lowest level in more than two years in July and fewer Americans quit their positions, fueling expectations that the labor market is cooling off enough to allow the Federal Reserve to forgo further interest rate increases this year. There were 8.8mn job vacancies in July, down from 9.2mn in June, according to the labour department’s Job Openings and Labor Turnover Survey released on Tuesday. Economists, who consider job openings to be a proxy for labour demand, expected 9.5mn openings, per Refinitiv. It marked the lowest level since March 2021. Job openings, while still higher than pre-pandemic levels, have trended lower in recent months as the labour market has slowed. The number of workers who voluntarily quit their job also declined, indicating that workers see fewer opportunities in the jobs market. Lay-offs held steady at 1.6mn, and new hires fell to 5.8mn from 5.9mn. (Financial Times)
U.S. stocks rose for a third consecutive session, cutting into major indexes’ August losses as shares from technology to industrials and financials advanced. The S&P 500 notched its largest three-day gain since March, paring its decline this month to 2%. A drop in government bond yields, which have climbed lately, eased pressure on stocks. The broad stock index advanced 1.5% as all 11 sectors pushed higher. The Dow Jones Industrial Average added 0.8%, or about 293 points. The tech-heavy Nasdaq Composite rallied 1.7%. (Wall Street Journal)
Medicare announced it will negotiate prices for 10 drugs, including major blood thinners and diabetes medications, in the first round of its negotiation program created in Democrats’ drug pricing reform law. The drugs include Bristol Myers Squibb’s blood thinner Eliquis, Boehringer Ingelheim and Eli Lilly’s diabetes drug Jardiance, Johnson & Johnson’s blood thinner Xarelto, Merck’s diabetes drug Januvia, AstraZeneca’s diabetes drug Farxiga, Novartis’ heart failure treatment Entresto, Amgen’s rheumatoid arthritis drug Enbrel, Johnson & Johnson and AbbVie’s blood cancer treatment Imbruvica, J&J’s anti-inflammatory medicine Stelara, and Novo Nordisk insulins that go by names including Fiasp and NovoLog. (STAT News)
Russia’s Defence Ministry has reported what it says are Ukrainian drones of targeting six Russian regions in the early hours of Wednesday in what appears to be the biggest drone attack on Russian soil over the course of this phase of the war – in other words, since Russia invaded Ukraine in February 2022. Drones hit an airport in the western Pskov region and were shot down over the regions of Moscow, Oryol, Bryansk, Ryazan and Kaluga. (The Guardian)
Vladimir Putin absent from Yevgeny Prigozhin’s private funeral. (Financial Times)
Saudi Arabia is offering to resume financial support to the Palestinian Authority, said Saudi officials and former Palestinian officials familiar with the discussions, a sign that the kingdom is making a serious effort to overcome obstacles to establishing diplomatic relations with Israel. Saudi officials say they are trying to secure Palestinian President Mahmoud Abbas’s support for open ties with Israel, providing more legitimacy to any eventual agreement and forestalling any accusations that the kingdom would sacrifice Palestinian efforts to establish an independent state to advance its own goals. Recognizing Israel is especially sensitive for Saudi Arabia because it hosts Islam’s holiest sites, giving it a special status in the Muslim world, where Palestinian statehood remains an emotional rallying cry. The Saudi outreach has fueled a debate among Palestinian leaders about whether to back the kingdom’s outreach to Israel—a move that would represent a significant shift from officials who accused Gulf leaders of stabbing them in the back when they established diplomatic ties with Israel in 2020. (Wall Street Journal)
Idalia strengthened into a Category 2 hurricane and is forecasted to make landfall Wednesday as an “extremely dangerous” Category 3 hurricane. The storm’s path has shifted west slightly, with landfall now expected in Taylor County. Still, much of the Tampa Bay area remains under a hurricane warning and storm surge warning. (Tampa Tribune)
Economy
Goldman Sachs bought UK and US companies using Chinese state funds: Goldman Sachs has used a fund set up with Chinese state money to buy a series of US and UK companies, including one with a cyber security business that provides services to the British government, even as tensions rise between Beijing and the west. The Wall Street bank has struck seven deals using cash from a $2.5bn private equity “partnership fund” it set up in 2017 with the sovereign wealth fund China Investment Corporation, according to multiple people with direct knowledge of the fund and its operations. The deals include a start-up that tracks global supply chains, a consultancy that advises on cloud computing, a drug testing company and a manufacturer of systems used for artificial intelligence, drones and electric vehicle batteries. Although the bank announced it had invested in the companies, it did not say the deals were financed at least partly from the China fund. (Financial Times)
Amazon CEO Andy Jassy tells employees it's 'past' time to commit to the company's return to work mandate and their jobs are at stake. This is the latest internal event from Amazon surrounding the company's RTO policy, which was announced months ago and has sparked widespread employee pushback and protests. In February, Jassy had told employees they would be required to return to the office at least three days per week, according to an Amazon statement. Roughly 30,000 Amazon employees signed a RTO petition in March, but Amazon's top HR executive Beth Galetti fully rejected the effort, Insider reported. (Insider, Axios)
China’s stock slump draws bargain hunters: Portfolio managers say that investors still seeking China exposure are increasingly turning to value investing, which focuses on finding shares trading below their real worth—based on a number of measures—rather than companies with big growth potential. The shift reflects the stark change of fortunes for China’s economy, which is faltering after years of breakneck growth. While U.S. stocks are in a bull market, the MSCI China index, a broad gauge of Chinese shares, is down more than 7% this year. (Wall Street Journal)
Manufacturers leaving China are setting up in India: As companies seek alternatives to China—after Covid lockdowns and given rising tensions with the West—India has been trying to attract them, and venture capital in India has taken note. While VC funding has slowed there, as in Europe and the U.S., business-to-business investments remain a prime area of financing. No one expects India to replace China as the global factory floor, but government incentives and broader efforts to source materials from India have made it more attractive to investors. (Wall Street Journal)
Germany’s economy is sliding into stagnation: A reliance on manufacturing and world trade has made Europe’s biggest economy particularly vulnerable to recent global turbulence—supply-chain disruptions, surging energy prices and the rise in inflation and interest rates. Now it will be the world’s only major economy to contract in 2023, according to the IMF. A fractured political class is struggling for answers to the long-term headaches and short-term crises, leading to growing malaise. (Wall Street Journal)
Technology
Apple has set Sept. 12 as the date for its biggest product-upgrade event of the year, when it’s set to unveil the iPhone 15 line and next-generation smartwatches. The company announced the plans on its website and via email under the tagline “Wonderlust.” The presentation will be streamed online at 10 a.m. Pacific, with an accompanying event at Apple’s Steve Jobs Theater in Cupertino, California. Bloomberg News previously reported that Apple was planning to introduce the new products on that day. (Bloomberg)
Apple Hopes Chinese Suppliers Can Solve Vision Pro’s Display Challenges: When Apple dealt with Chinese manufacturers in the past, it was to buy low-level components such as small metal parts, paper boxes and batteries. But times are changing. Apple is currently testing advanced displays made by two Chinese suppliers for possible inclusion in future models of its Vision Pro mixed-reality headsets. (The Information)
OpenAI Launches ChatGPT For Businesses, Competing with Microsoft: OpenAI is now selling a version of ChatGPT that runs faster and offers more security and privacy assurances than the basic paid version of the chatbot. Dubbed ChatGPT for Enterprise, the service will also eventually let customers tweak ChatGPT using their own proprietary data so the chatbot can answer questions using business terms employees are already familiar with, such as the specific names of their internal units or products. OpenAI’s move puts it in direct competition with Microsoft, which also offers an OpenAI-powered chatbot to its business customers. (Microsoft invested billions of dollars in OpenAI and uses the startup’s technology in its own products.) OpenAI said the price of ChatGPT for Enterprise will vary, depending on the customer, while Microsoft’s Bing Chat Enterprise is $5 per user per month. (The Information)
There is a growing chorus of complaints that Google is not as accurate, as competent, as dedicated to search as it once was. The rise of massive closed algorithmic social networks like Meta’s Facebook and Instagram began eating the web in the 2010s. More recently, there’s been a shift to entertainment-based video feeds like TikTok — which is now being used as a primary search engine by a new generation of internet users. For two decades, Google Search was the largely invisible force that determined the ebb and flow of online content. Now, for the first time since Google’s launch, a world without it at the center actually seems possible. We’re clearly at the end of one era and at the threshold of another. (The Verge)
Japan’s cyber security agency suffers months-long breach: The organisation responsible for Japan’s national defences against cyber attacks has itself been infiltrated by hackers, who may have gained access to sensitive data for as much as nine months. According to three government and private sector sources familiar with the situation, Chinese state-backed hackers were believed to be behind the attack on Japan’s National Center of Incident Readiness and Strategy for Cybersecurity (NISC), which began last autumn and was not detected until June. (Financial Times)
New Zealand will introduce legislation this week that enables a digital services tax on large multinational companies, though the levy won’t be imposed until 2025. The proposed tax would be payable by multinational businesses that make over €750 million ($810 million) a year from global digital services and over NZ$3.5 million ($2 million) a year from digital services provided to New Zealand users, Finance Minister Grant Robertson said. (Bloomberg)
Smart Links
Visitors to France to spend record sum in boon for tourism industry. (Financial Times)
Google DeepMind has launched a watermarking tool for AI-generated images. (MIT Technology Review)
Chinese robot waiters fuel Korean anxiety over labour shortages. (Financial Times)
The Clock Is Ticking: 3 Ways to Manage Your Time Better. Tl;dr — cut meetings! (Harvard Business School)