The World
U.S. employers added 1.4 million jobs in August and the unemployment rate fell to 8.4%. The jobless rate’s decline put it below the peak of 10% during the 2007-2009 recession and is in line with unemployment seen in past major recessions. All three major market indices fell after the jobs report. Meanwhile, Americans' 65% approval of labor unions is once again the highest it has been since 2003. Public support for labor unions has been generally rising since hitting its lowest point of 48% in 2009, during the Great Recession. (Wall Street Journal, CNBC, Gallup)
The Trump administration and Congress have agreed to pass a bill to avoid a government shutdown without tying funding to separate measures such as coronavirus relief. Approving a so-called continuing resolution, which would temporarily set federal spending at current levels, would not inject the heated politics of pandemic aid into efforts to keep the government running. (CNBC)
The White House has asked agencies to detail all China-related funding that seeks to counter China’s global influence and business practices, or supports Beijing. Meanwhile, China could gradually cut its holdings of U.S. Treasury securities by about 20% to US$800 billion, the state-backed Global Times reported, as Beijing continues to weigh options to insulate itself from tensions with Washington. Separately, the Philippine military said it will maintain close ties with the U.S. and train with its forces even as it gets closer to China. (South China Morning Post-1, South China Morning Post-2)
Russian scientists report modest amount of antibodies in volunteers given the vaccine for the virus. Writing in the Lancet, they reported that volunteers produced a relatively modest amount of antibodies to the coronavirus. Meanwhile, President Trump’s vaccine chief sees a ‘very, very low chance’ of a vaccine by Election Day. Separately, the W.H.O. said it does not expect widespread vaccinations until the middle of next year, stressing the importance of rigorous checks on their effectiveness and safety. (New York Times-1, New York Times-2, The Guardian)
Greece pulled back from NATO eastern Mediterranean talks, as Athens refuses to join in unless Ankara withdraws naval ships from contested maritime areas. (Financial Times)
The U.S. Department of Justice updated its merger remedies guidelines for the first time in nearly a decade. The big winner is private equity, which for the first time received explicit and positive mention as a viable "divestiture buyer" of assets that merging companies may be required to sell. (Axios)
Roughly three-quarters of U.S. adults say it is very (37%) or somewhat (36%) likely that social media sites intentionally censor political viewpoints that they find objectionable. Just 25% believe this is not likely the case. (Pew Research Center)
Helping companies prioritize their cybersecurity investments: In an economy where most industries are tightening their belts, many organizations don’t know which types of attacks lead to the largest financial losses, and therefore how to best deploy scarce security resources. But a new platform from MIT’s Computer Science and Artificial Intelligence Laboratory (CSAIL) aims to change that, quantifying companies’ security risk without requiring them to disclose sensitive data about their systems to the research team, much less their competitors. (MIT News)
Economy
Private equity companies could now target European telecom operators, after a dip in transactions in 2019. As demand for telecom services increased during the pandemic, the industry offers cash flow visibility, as well as some potential bargains. (S&P Global Market Intelligence)
Cliffwater’s Zadra sees private-equity investors staying the course: Veteran consultant to limited partners says private-equity firms and their investors are responding differently to the current economic challenges than they did to the financial crisis. (Wall Street Journal)
Investment-banking and trading revenues hit an eight-year high in 1H20. Revenue in the traditional Wall Street businesses was 32% higher than in the same period last year. Global banks raked in fees from companies scrambling to raise cash and panicky investors scrambling to sell, then buy again as markets surged. (Wall Street Journal)
Macy’s CEO Jeff Gennette said he sees $10 billion in market share up for grabs because of the shakeout in retail, explaining that wealthier customers are rewarding themselves with luxury items since the pandemic has curtailed their ability to travel. (CNBC)
The pandemic is threatening the creditworthiness of many municipal securities long seen as safe investments—bonds for higher education, health care, tourism and travel. Moody’s lowered its outlook to negative on all municipal bond sectors except for housing-finance agencies and water, sewer and public power. Meanwhile, emerging-markets bond funds are facing a reckoning. (Wall Street Journal-1, Wall Street Journal-2)
The Covid-19 crisis accelerated the shift to online retail at an unprecedented pace, resulting in a 4.3 point jump in the online portion of total retail sales. E-commerce sales amounted to $212 billion in the 2Q20, which is equivalent to 16.1% of total retail sales. That's up from just 10.8% in Q219. (Statista)
Child-care centers see costs jump 47% due to the pandemic. Home-based family child care is seeing costs increase an average of 70%. (CNBC)
Technology
The Justice Department plans to bring an antitrust case against Google as soon as this month, after Attorney General William P. Barr overruled career lawyers who said they needed more time to build a strong case against one of the world’s wealthiest, most formidable technology companies. (New York Times)
China is planning a sweeping set of new government policies to develop its domestic semiconductor industry and counter Trump administration restrictions, conferring the same kind of priority on the effort it accorded to building its atomic capability. Beijing is preparing broad support for so-called third-generation semiconductors for the five years through 2025. A suite of measures to bolster research, education and financing for the industry has been added to a draft of the country’s 14th five-year plan, which will be presented to the country’s top leaders in October. (Bloomberg)
Apple is putting off until next year a controversial change to its mobile operating system that would make it harder for marketers to run targeted digital ads. The change, and particularly Apple’s timing, had brought protests from developers who felt they didn’t have enough time to prepare for the change that was expected with iOS 14 this month. The impact of the changes is expected to be widespread. Facebook last week warned it could kill its business that delivers ads for developers in non-Facebook apps. Morgan Stanley said last week it would hurt ad revenue growth across the industry. (The Information)
VW one-ups Tesla with a revolutionary battery breakthrough. After 10 years in stealth mode, QuantumScape launches an IPO, becoming the first U.S. battery company to go public in a decade. (Marker)
Smart Links
Brand/agency podcast ad consideration and intention soar to record levels. (PodNews/WestwoodOne)
Global Entry processing centers are reopening. (Washington Post)
Remote work is killing the hidden trillion-dollar office economy. (Marker)
Columbia University hires Kim Lew to run its $11 billion endowment. (Bloomberg)
How unlimited information is transforming society. (Scientific American)
WeChat is China’s everything app, and the “We” is looking suspicious. (Bloomberg)
New mathematical method shows how climate change led to fall of ancient civilization. (Science Daily)