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The World
The IMF turned slightly more positive on the global economy, but warned of a “long, uneven and uncertain” recovery. The global economy is now projected to contract by 4.4% in 2020 — an upward revision from an estimate of -4.9% in June. However, it added that the pandemic will cause “lasting damage” to living standards, and tourism and commodity-dependent economies will be hard-hit in a “long, uneven” recovery. Meanwhile, the IEA warned of the slowest decade of worldwide energy demand growth since the 1930s, as OPEC again cut its 2021 oil demand forecast. In the U.S., President Trump is facing an unusual barrier to new stimulus aid: GOP allies. And with no bill in sight, the entertainment and travel industries have started laying off furloughed workers permanently. (CNBC, Financial Times, Reuters, Financial Times, IEA World Energy Outlook, The Hill, Reuters-2)
As the Senate Judiciary Committee begins questioning Judge Amy Coney Barrett amid Covid infections and quarantines, the committee confirmed it will vote Thursday. Barrett told senators that courts aren’t designed to “right every wrong” — a responsibility reserved for elected officials. All 22 committee members will have a chance to direct questions to the nominee for 30 minutes at a time. Separately, VP Biden said he’s “not a fan of court-packing.” (New York Times, Washington Post, Washington Post-2)
Johnson & Johnson’s Covid-19 vaccine study was paused due to an unexplained illness in a study participant. A document sent to outside researchers running the 60,000-patient clinical trial states that a “pausing rule” has been met, that the online system used to enroll patients in the study has been closed, and that the data and safety monitoring board would be convened. (StatNews)
With the first U.S. case of Covid-19 reinfection, researchers found it can occur swiftly and the second bout of illness can be more severe. Wisconsin reports all-time high with 950 people hospitalized, and Minnesota recorded its fifth straight day of more than 1,000 infections, while Russia reported its highest daily fatalities since the start of the pandemic. In Europe, schools are reporting thousands of cases in some of the continent’s biggest hot spots. In China, State-owned drug maker China National Biotec Group has offered its experimental vaccines to students heading overseas. New Zealand’s influenza cases were reduced to just 6 this last season — “near extinction” — a 99.8 drop that experts attribute to mask wearing and social distancing for Covid-19. (Bloomberg, The Lancet, Milwaukee Journal Sentinel, Star Tribune, Wall Street Journal, The Guardian, RNZ)
At least 60 American warplanes conducted close-up reconnaissance flights near China in September, and a Chinese think tank said the U.S. may be preparing for future long-distance missions in the South China Sea. Meanwhile, China's top diplomat urged Asian countries to be "vigilant" for a rise in tension as a result of U.S. seeking influence there. The warning comes as the White House moves forward with three arms sales to Taiwan. (South China Morning Post, Reuters, Reuters-2)
China’s imports posted its biggest surge since before the pandemic, as trade recovery gathers head of steam: Exports grew by 9.9% in September YoY, while imports surged by 13.2%, the first growth of inbound shipments since June. China’s car market recorded its first quarter of YoY sales growth in two years. Meanwhile, Beijing released a plan to turn Shenzhen, the hi-tech hub neighbouring Hong Kong, into a “core engine” of reform to power growth and innovation in the Greater Bay Area. President Xi Jinping will deliver an “important address” tomorrow during his visit there, marking 40 years since it was set up as a special economic zone. (South China Morning Post, Wall Street Journal, South China Morning Post-2)
Belarus security forces could fire on protesters if they deem it necessary, a first deputy interior minister warned, as EU foreign ministers agreed to impose sanctions personally targeting President Lukashenko. Meanwhile, a huge fire has broken on Kilimanjaro, Africa’s highest peak and a key attraction for tourists in Kenya and Tanzania. The fire broke out Sunday and is yet to be contained. (Agence France-Presse, The Guardian)
African Americans still pay more than any other group to own a home, a disparity that over 30 years contributes to roughly half the current $130,000 gap between Blacks and whites in savings at retirement. (MIT/Reuters)
More than 10 million Americans have already cast votes, compared to 1.4 million who had voted by Oct. 16 in 2016. In California, more than 279,000 mail ballots had been returned as of Sunday — more than 20 times the turnout at a comparable point in 2016. (Reuters, Los Angeles Times)
Economy
European private equity funds outperform listed equities over the long-term, new research shows. The data analysis found that European buyouts delivered an internal rate of return of 15% since inception to end-2019, beating the MSCI Europe index return of 5.84%. It also found that European venture capital returned an IRR of 16.79% over a 10-year horizon, close to that of North American funds. (Private Equity News)
JPMorgan Chase’s 3Q20 profit rose 4%, a surprising result for the nation’s biggest bank. JPM set aside just $611 million for potential future loan losses, far less than expected and the $10.47 billion it booked in the second quarter. Profit doubled 2Q20. Meanwhile, Citigroup’s 3Q20 profit fell 34% as it set aside $2.26 billion for loan-loss provisions. BlackRock’s 3Q20 profit rose 22%, while its assets climbed to record $7.8tn. (Wall Street Journal, Wall Street Journal-2, Financial Times)
The prospect of a Democratic sweep is helping to push U.S. government-bond yields higher. For debt investors, the key is whether one party or another has unified control of government, making it easier to expand the federal budget deficit through tax cuts or spending programs. (Wall Street Journal)
July is the new January, as more companies delay a return to the office. From Ford to Microsoft, white-collar companies are increasingly extending working from home through next summer. Meanwhile, new U.S. Postal Service data shows that while temporary moves were up 27% between February and July 2020 compared to the same period last year, permanent changes of address increased by just 1.9% year over year. (New York Times, Bloomberg)
China’s digital yuan tests leap forward in Shenzhen, issuing 10 million yuan worth of digital currency to 50,000 randomly selected residents who applied. The government doled out the money through mobile “red envelopes,” a tool designed to digitize the custom of gifting money in red packets and first popularized by WeChat’s e-wallet. (TechCrunch)
Technology
PC demand during the pandemic fueled the strongest U.S. market growth in a decade, riding a surge in remote work, study and home entertainment. Much of the growth came from Chromebooks, with a roughly 90% boost in 3Q20. World-wide PC shipments rose around 9% year over year in the quarter, with Chromebooks representing about 11% of the combined PC/Chromebook market. (Wall Street Journal)
Google’s internal data show that engineers found it harder to code from home. One internal survey found that in the three months ended in June, only 31% of the company’s engineers polled felt they had been highly productive, down 8 percentage points from a record high in the March quarter. That decline and more recent data on engineers’ coding output from the third quarter caused its head of engineering productivity to email senior managers and executives, drawing attention to the data. (The Information)
Disney is restructuring its media and entertainment divisions, as streaming becomes the most important facet of the company’s media business. To further accelerate its direct-to-consumer strategy, it will centralize its media businesses into a single organization responsible for content distribution, ad sales and Disney+. (CNBC)
Facebook will remove all content on its platform that “denies or distorts the Holocaust.” The company says this expansion of its hate speech policies is a response to what it calls “the well-documented rise in anti-Semitism globally and the alarming level of ignorance about the Holocaust, especially among young people.” Facebook has faced strong criticism for letting Holocaust denial content spread freely on its platform. (The Verge)
While Facebook continues to take heat over being a tinderbox for conservative media, data shows that liberal, civically engaged voices are winning out on Instagram — and the engagement is even higher there than on Facebook — reflecting a younger, more progressive generation that has left Facebook to their parents. (Axios)
What to expect from Apple’s ‘Hi Speed’ iPhone event today: Four new iPhone models, a debut of the HomePod mini, new MagSafe wireless chargers, and more. Apple’s official “Hi, Speed” tagline for the event suggests that one of the iPhone 12’s main features could be support for fast 5G cellular speeds. In Asia, Apple is ramping up iPhone production. Watch live at 1 pm ET/10 am PT. (TechCrunch, 9to5Mac, The Verge, Nikkei Asian Review)
Smart Links
Best places to retire in the U.S. in 2020-21. (U.S. News & World Report)
SoftBank plans to launch a SPAC. (Crunchbase)
Inside Singapore’s huge bet on vertical farming. (MIT Technology Review)
Wisconsin denies Foxconn tax subsidies after contract negotiations fail. (Milwaukee Journal Sentinel)
Baseball’s first fans of 2020 see Dodgers-Braves NLCS opener. (Associated Press)
Learn More:
Today, 4:30 pm ET: Managing Diversity — Harvard Business School Dean Nitin Nohria interviews James Cash, the first black faculty member to receive tenure at HBS. (HBS Live Event)
Through Oct. 21: 23rd annual Milken Institute Global Conference — Watch live & on-demand. (Milken Institute)