The World
Business groups — including the Business Roundtable, U.S. Chamber of Commerce, and Goldman Sachs’ 10,000 Small Business Voices — are urging Congress secure a legislative economic fix. Meanwhile, "there are two Americas out there:" Consumers are paying off credit cards at a surprising clip; personal income grew in 2Q20; investors are reveling in stellar market performance; total household debt fell in 2Q20 for the first time since 2014. And yet, joblessness remains "alarmingly high;" food pantries are overwhelmed; homelessness is swelling; people are even surrendering pets they can't afford. Today, Wall Street stocks are nearing a record peak after Europe’s rally, while U.S. online shopping is forecast to beat 2019 total by October. (Finance 202, Axios, Financial Times, Financial Times)
Beijing extended Hong Kong’s Legislative Council term by at least one year to plug the gap created by the postponement of polls, but didn’t decide how disqualified lawmakers can continue their duties. Meanwhile, yesterday’s multiple Hong Kong arrests underscored the speed with which political freedoms are being curtailed. All those arrested were taken on suspicion of colluding with foreign powers — a charge that could yield life sentences in prison. Meanwhile, Next Digital, founded by arrested media mogul Jimmy Lai, saw a 1,200% rally as traders answered a social media call to snap up his shares. (South China Morning Post, Washington Post, South China Morning Post)
Belarus shut off internet access in the country after its disputed election, as the main opposition candidate Svetlana Tikhanovskaya left the country and clashes between heavily armed police and demonstrators escalated. Russia moved swiftly to congratulate President Alexander Lukashenko for his electoral win and press for stronger ties. (Wired, The Guardian, Wall Street Journal)
Russia hails 'Sputnik moment': Russian President Vladimir Putin claimed that Russian scientists achieved a breakthrough in the global vaccine race, announcing the country has become the first to approve an experimental vaccine and that his own daughter has already taken a dose. Officials pledged to vaccinate millions of people, including teachers and front-line health-care workers this month — before even finishing clinical trials. In June, Russia registered 18.6% more deaths from the same month last year. (BBC News, Washington Post, Reuters)
The Bank of England will do more and faster quantitative easing if the economy slows and markets wobble again. Meanwhile, sunny weather and the reopening of non-essential UK shops fueled a consumer spending increase close to pre-pandemic levels. (The Times, The Guardian)
Pakistan repaid a $1 billion Saudi loan that was called in after Pakistan began insisting that Saudi Arabia allow it to marshal the Islamic world's support on the Kashmir issue. The $1 billion to repay the loan came from China in the form of another loan. (Nikkei Asian Review)
Americans are renouncing their citizenship at the highest levels on record, as 5,816 Americans gave up their citizenship in 1H20 — a 1,210% increase on the prior six months. It seems the pandemic has motivated U.S. expats to cut ties and avoid the current political climate and onerous tax reporting. (The Independent)
Economy
Four-fifths of CEOs expect COVID-19 to entrench remote working (PwC), as the world’s biggest coworking companies close locations, signaling an end to years of expansion in one of real estate’s hottest sectors. Meanwhile, Oxford Economics expects a $2tn surge in trade in services over the next five years with more countries adopting technology and switching to remote working. (Reuters, Wall Street Journal, The Telegraph)
The U.S. Federal Reserve announced how much each large bank that underwent its 2020 stress tests will have to hold in additional capital, marking the first time the Fed has given out custom capital requirements for each bank under its new “stress capital buffer.” Goldman Sachs and Morgan Stanley were ordered to hold the most capital of the 34 firms tested. (Reuters)
Thousands of commercial-mortgage borrowers have been struggling to meet payments. One potential reason: aggressive lending practices that overstated borrowers’ ability to repay. A study of $650 billion of commercial mortgages originated from 2013 to 2019 found that even during normal economic times, the mortgaged properties’ net income often falls short of the amount underwritten by lenders. Meanwhile, grocery stores might be the next big thing to move into malls (Wall Street Journal, CNBC)
Home builders shares have been on a tear, boosted by a recovery in the housing market amid record-low mortgage rates. The S&P 500’s home-building subindustry index is up 23% this year and closed Monday at its first record in 15 years. The S&P 500, in comparison, has risen 4% and is within 1% of its February high. (Wall Street Journal)
Technology
Several tech companies — including Apple, Facebook, Amazon and Microsoft — joined the court battle against the U.S. ban on new visas for temporary foreign workers. Meanwhile, Trump’s WeChat ban threatens Apple's smartphone sales in China, as users say they would rather give up their iPhones than the 'crucial' app. Seaparately, Facebook and gaming firms are bracing for Apple’s restrictions on ad targeting domestically. (Bloomberg, Nikkei Asian Review, The Information)
A California judge granted a preliminary injunction requiring Uber and Lyft to stop classifying their drivers as independent contractors. Meanwhile, Uber ridership has cratered, with gross bookings on rides down 75% in 2Q20. Further, Uber could be forced out of the UK as it faces the prospect of being banned in London. (CNBC, Washington Post, Wired UK)
Walmart and Instacart are partnering for same-day U.S. delivery in their fight against Amazon’s Whole Foods, while tech antitrust groups have a new target: Food delivery apps. (CNBC, Morning Consult)
Smart Links
Boeing order cancellations outpace new sales for 6th-straight month; Heathrow Airport passenger numbers fall 88%. (CNBC, Reuters)
Top NY employers vow to hire more disadvantaged students: 100,000 young people over next decade. (Financial Times)
Edtech’s 2Q20 venture totals rose jumped more than 60% from 1Q20 (TechCrunch)
86% of podcast listeners in Saudi Arabia listen to brand-funded podcasts. (PodNews)
Online payments group Stripe poached GM’s finance chief. (Financial Times)
Universities are hitting bond markets for cheap cash (Reuters)