The World
U.S. retail spending rose 0.6% in August for the fourth straight monthly increase, but at a slower pace as some extra unemployment benefits ran out. Consumers spent more on clothing, electronics and furniture as students went back to school. Spending fell on groceries and sporting goods. President Trump subsequently called for stimulus payments and massive economic relief bill, upending Republicans’ more limited approach. In the UK, Boris Johnson agreed to give MPs a final say on whether to rip up parts of the EU Brexit treaty to head off a rebellion, while the EU Commission chief said Brexit deal chances are fading every day. The OECD reports that the global recession will continue into 2021. (Wall Street Journal, Washington Post, The Times-1, The Times-2, Reuters)
Two Chinese state-owned firms labeled “Communist Chinese military companies” by the U.S. Defense Department are selling billions of dollars in bonds with the help of Western banks, including Bank of America, Goldman Sachs. JPMorgan Chase, Morgan Stanley, and various European and Chinese institutions. Meanwhile, the U.S. charged five Chinese and two Malaysian nationals in hacking more than a hundred targets, including telecommunications companies, universities, think tanks, and pro-democracy activists and politicians in Hong Kong. (Wall Street Journal, South China Morning Post)
President Trump presided over a White House signing ceremony of agreements establishing formal ties between Israel and two Arab states, the UAE and Bahrain, saying the accords would “change the course of history.” Israel Prime Minister Netanyahu: “The treaty could end the Arab-Israel conflict once and for all.” Meanwhile, Iran’s President Hassan Rouhani said that the Gulf countries will be responsible for any “consequences,” accusing them of planning to let Jerusalem set up military bases: “How could you reach out your hands to Israel?” (Washington Post, Jerusalem Post, Times of Israel)
Hurricane Sally slammed Alabama 16 years to the day after Hurricane Ivan, dumping two feet of rain. Behind Sally, more storms loom in the Atlantic. (Al.com, New York Times)
The crisis caused 40% of parents to change their job situation, with working mothers disproportionately affected: 63% were primarily responsible for childcare during the shutdown, compared to 43% of working fathers; 80% primarily handled their children’s online learning, compared to 31% of working fathers. 17% of working moms quit during the pandemic, compared to 10% of working dads. Meanwhile, JPMorgan Chase sent some Manhattan workers home this week after an equities trading employee tested positive for Covid-19. News was communicated to employees on Sept. 13 — just days after the biggest U.S. bank told senior traders they’d be required to return by Sept. 21. (CNBC, Bloomberg)
Restaurants may be a key component to Covid-19 Spread. In a controlled study, the CDC found that those who tested positive were 2.4 times more likely to have dined at a restaurant in the 2 weeks prior to falling ill. (Medscape)
Economy
Stripe plans to offer $20,000 to employees who opt to move out of San Francisco, New York or Seattle, but also cut their base salary by as much as 10%. Meanwhile, work-from-home employees are working longer days, with more meetings and emails than ever before. An analysis of emails and meetings of 3.1 million people in 16 global cities found that the average workday increased by 8.2 percent—or 48.5 minutes. (Bloomberg, Harvard Business School)
MBA application are soaring: Columbia Business School applications rose 18.6% to 6,971, crushing the old record of 6,188 set in 2016-2017. Rice University’s Jones Graduate School of Business saw a 63% jump in applications; University of Virginia’s Darden School of Business: 25%; Wharton’s MBA program: 21%; University of Oxford’s Saïd Business School: 35%; Imperial College Business School in London: 41%; Warwick Business School; 56%. (Forbes)
Colleges and universities that compete in the nation’s five major athletic conferences, known as the Power Five, have collected billions of dollars a year through ticket and merchandise sales, TV contracts and other revenue sources. But less than 7% of it has gone back to the athletes who play the two sports that bring in the bulk of that money — men’s basketball and football. In fact, these institutions use most of that revenue to fund less popular sports that tend to lose money and draw students from higher-income families, including women’s tennis and men’s golf. (Harvard Kennedy School, National Bureau of Economic Research)
Low mortgage rates have spurred a boom in home refinancing, which in turn has spurred a boom in the issuance of mortgage-backed securities. The value of single-family mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac totaled almost $322 billion in August, a new monthly record. (Wall Street Journal)
Technology
Cloud company Snowflake shares surged more than 120% in its market debut, in the largest ever software IPO. Stock began trading at $245 per share, before being briefly halted due to volatility. A day earlier, Snowflake priced shares at $120, higher than the $100 to $110 range it estimated on Monday, and a huge bump from the $75 to $85 range it proposed last week. (CNBC)
Apple event takeaways: 1) Apple One is a big deal and could be the beginning of Apple as a Service. 2) The Watch is the new entry device. For a long time it was Macs in schools, then it was iPods. Now, the Watch is going to be a lot of kids' first Apple device. 3) The iPad is Apple's favorite device; Apple even seems to build iOS (and increasingly macOS) with the iPad largely in mind. 4) Health allows Apple increasingly to sell niche tracking and sensors as upgrades on key devices, including measuring blood oxygen saturation. Fitness+ won't kill Peloton, but it will sell a lot of Watches. 5) Apple announced a new Family Setup feature that lets you manage multiple Apple Watches from a single iPhone. Fallout has already begun: Spotify has lashed out at Apple’s newly launched subscription bundle, saying it abuses its market position. (Protocol, The Verge, The Times)
Zoom is eyeing the messaging market—a major threat to Slack. Zoom has been quietly working on a major upgrade to the messaging functions inside its video conferencing product. While it currently has rudimentary text chatting capabilities, the new service seeks to offer more advanced messaging features like Slack. (The Information)
The FTC is gearing up to file a possible antitrust lawsuit against Facebook by year-end. The case preparations come after the FTC has spent more than a year investigating concerns that Facebook has been using its powerful market position to stifle competition. (Wall Street Journal)
AT&T is going big on ad-supported products: A lower-priced version of HBO Max is coming next spring with a "light ad load," and ad-subsidized cell phone plans are being considered. (Protocol, Bloomberg, Reuters)
Beijing is unlikely to block ByteDance’s deal with Oracle, as analysts believe the “technical partnership” will satisfy China since no data or code are being sold. While ByteDance would keep a majority stake in TikTok, being TikTok’s new “trusted technology partner” could be worth more than $1 billion in potential revenue annually for Oracle’s cloud business. Meanwhile, how did dark horse Oracle became TikTok’s leading suitor: The emergence of the oddball alliance between a business-software giant and social-media sensation was the latest twist in negotiations. (Financial Times, The Information, Wall Street Journal)
Smart Links
The Big Ten announced that the football season will resume the weekend of Oct. 24. (ESPN)
Professional investors turn to Reddit, Twitter to track retail. (Bloomberg)
Amazon Music now offers podcasts. (The Verge)
Calpers weighs curbs on investment chief’s personal holdings. (Wall Street Journal)
How platforms are pivoting during the pandemic. (MIT Sloan)