The World
EU leaders approved a €750bn recovery fund after a marathon summit, the biggest joint borrowing ever agreed by the 27 nation bloc. The deal centers on €390bn of grants to member states hardest hit by the pandemic. Italy and Spain are expected to be the main recipients. A further €360bn in low-interest loans will be available to bloc members. (Financial Times, BBC)
A long-awaited report into Russian interference in British politics by the Intelligence and Security Committee concluded that Moscow’s influence is “the new normal” with senior figures linked to the Kremlin enjoying access to top business and political leaders. (Financial Times)
Just days after concluding operations in the closely watched region of the South China Sea, one of the U.S. Navy's largest ship formations, the Nimitz Carrier Strike Group, commenced joint exercises with defense partner India near another important maritime region: the Strait of Malacca, a narrow sea lane between Malaysia and Indonesia that is considered one of the world's most critical chokepoints. (Nikkei Asian Review)
As Washington ponders extending enhanced federal unemployment benefits as part of the next relief bill, JPMorgan Chase Institute and University of Chicago economists found that while all households on average slowed spending at the start of the pandemic, “unemployed households actually increased their spending beyond pre-unemployment levels once they began receiving benefits.” That unexpected outcome “has helped households to smooth consumption and stabilized aggregate demand.” (Finance 202, JPMorgan Chase)
Former Vice President Joe Biden will unveil a plan to invest $775 billion over 10 years to rebuild and fortify the nation’s caregiving economy, focusing on daycare in early childhood, in-home elder care and long-term care for the disabled. (CNBC)
Workplace PPE and symptom checks rise: In April, 46% of workers at companies doing on-site business said their employer "always" provided them with PPE; that figure is now 66%. Likewise, more on-site workers in early July than in April say their employer is "always" screening customers and employees for symptoms of COVID-19, 51% versus 35%. Most companies have undertaken more stringent cleaning procedures. However, the percentage doing so has been relatively flat over the course of the pandemic — 68% now vs. 69% in April. (Gallup)
U.S. voters in growing numbers believe that Black and Hispanic Americans are discriminated against, and a majority of 56% holds the view that American society is racist. 71% believe that race relations are either very or fairly bad, a 16-point increase since February. (Wall Street Journal/NBC News poll)
Economy
Wall Street and professional services firms consider moving jobs from NYC and may pare their presence in the city by at least 20%. About one in four office employers intend to reduce their footprint by at least a fifth, and about 16% expect to move jobs out of the city. Companies also expect only 10% of their employees to return to the office this summer and just 40% by year-end. In the UK, Royal Bank of Scotland told more than 50,000 staff to work from home until next year, while City firms have been urged to tackle gender imbalance with working from home and flexible hours. (Bloomberg, The Telegraph, Evening Standard)
The downtown L.A. skyscraper U.S. Bank Tower will be sold at a discount to the developer of NY’s One World Trade Center as office leasing falls nationally, raising questions about high-rise office buildings’ future appeal. In NY, Lower Fifth Avenue, running from 42nd to 49th streets, had the biggest 2Q20 drop in retail asking rents, sliding 30% from a year earlier. Soho and Madison Avenue were among areas with declines of more than 14%. Meanwhile, facing a $16 billion deficit, the N.Y. subway plans for deep cuts. (Los Angeles Times, Bloomberg, New York Times)
All of the S&P 500 index’s 2020 gains have taken place outside of regular trading hours. JP Morgan says that’s because U.S. investors were acting on market-moving news such as Chinese economic data or the latest developments on coronavirus vaccine candidates and therapeutics, all of which tended to arrive when U.S. markets were formally closed. (MarketWatch)
U.S. airlines face the end of business travel as they knew it: Airlines are confronting a once-unthinkable scenario — that this crisis will obliterate much of the corporate flying they’ve relied on for decades to prop up profits. Meanwhile, Southwest says 28% of workers seek leaves or exits, while Delta is reviewing pilot staffing after 2,234 bids for early retirement. (Bloomberg, Reuters)
While the UK economy has recovered half of the output lost during the lockdown, the average Britain household suffered a 4.5% drop in income in May compared with the outbreak start, the biggest hit to their finances since the mid-1970s oil crisis. (The Times, The Guardian)
Technology
Huawei’s 5G dominance is threatened in Southeast Asia, as the region becomes a battlefield as Singapore, Vietnam choose European rivals. (Nikkei Asian Review)
Next Monday, a House antitrust subcommittee will grill a quartet of CEOs from Apple, Amazon, Google and Facebook, but the committee has already prepped for a related investigation into the sector by quizzing a top executive from another tech giant: Microsoft. Several weeks ago, the subcommittee interviewed Brad Smith, president and chief legal officer of Microsoft, where he discussed concerns about the way Apple operates its App Store. (The Information)
Is Reliance Jio the world’s first ‘Super Operator’? India went from 14 operators down to 4, with two out of the remaining four already on a life support and a third one reeling under debt, instantly offering Reliance Jio a monopoly position. A monopoly position married with serious money muscle and a clairvoyant vision to build a digital platform to empower and democratize technology in a country of 1.3 billion people, making it the most attractive company for any investor or stakeholder to partner with. (Counterpoint Research)
Smart Links
With budgets under pressure, colleges cut ‘country-club’ staples like golf, tennis. (Wall Street Journal)
Apple, Google and Sony will be critical to MLB season. (CNBC)
FlexJobs CEO outlines what newly remote companies are getting right, and wrong, in the transition to virtual office. (TechCrunch)
The use of cash is declining faster than it did before the pandemic. (Deutsche Bank Research)