The World
The Federal Reserve’s landmark shift to a more tolerant stance on inflation will be a drag on the dollar for years and will raise hard questions about the role of central banking. Such a reinterpretation of the Fed’s mandate could be seen as a foray into social policy, a vital precedent for others as they reexamine their own roles after years of unconventional moves that already impact wealth and income distribution. The second, more immediate concern will be the dollar's weakness, which hurts exporters from Europe to Asia. (Reuters)
Corporate America has a major coronavirus trust crisis, based on a new Edelman Trust Barometer survey: 1) Only half of employees believe that office spaces are safe. 2) There is no agreement on essential measures that would enable a safe return to workplace. 3) Employees feel confident that they can work from home; 4) There is little appetite for return to everyday activities. 5) We have a plethora of information, little of it credible. 6) We face another potentially catastrophic dichotomy: a deep fear of a second wave but alarming resistance to vaccination. Tomorrow: How businesses should respond. (Edelman Trust Barometer)
The chief executives of nine drug companies pledged not to seek regulatory approval before the safety and efficacy of their experimental coronavirus vaccines have been established in Phase 3 clinical trials, an extraordinary effort to bolster public faith in a vaccine amid President Trump’s rush to introduce one before Election Day. In the UK, tougher restrictions on socializing are imminent as ministers are considering effectively banning two families meeting indoors in England after two successive days of almost 3,000 cases being confirmed. In Greece, flight prices to the UK are skyrocketing: Tens of thousands of holidaymakers have under 24 hours to return to England, as seven Greek islands yesterday lost their ‘travel corridor’ and had a quarantine reimposed. In India, infections spread from cities, as it surpasses Brazil to become country with world’s second-highest number of cases. (Washington Post, The Times, The Telegraph, Financial Times)
China is launching its own initiative to set global standards on data security, countering U.S. efforts to persuade like-minded countries to ringfence their networks from Chinese technology. Meanwhile, President Trump raised the prospect of ‘decoupling’ US economy from China, vowing to end reliance on Beijing, ratcheting up anti-China rhetoric, as U.S. border agents are turning up the heat on Chinese students, who say they are being harassed. Separately China accused Indian troops of illegally crossing a disputed Himalayan border and firing "provocative" warning shots at patrolling soldiers. India rejected the allegations and accused Chinese troops of firing in the air during the face-off. (Wall Street Journal, Financial Times-1, Financial Times-2, BBC News)
Boris Johnson’s attempt to change the Brexit deal relating to Northern Ireland prompted the head of the government’s legal department to resign, as ministers admit the overriding divorce deal may ‘break international law.' Meanwhile, former European Commission President Jean-Claude Juncker said U.K. and EU negotiators are unlikely to reach a trade agreement in the coming months. (The Times, The Telegraph, CNBC)
Senate Republicans plan to move forward with a scaled-back stimulus package, which is expected to reinstate lapsed federal unemployment benefits at $300 per week — half their previous level — and allocate $105 billion for schools and funds for testing and the Postal Service. Meanwhile, U.S. stocks are continuing their drop following the tech slide, and oil fell 5% to below $40 a barrel, its lowest since June. (New York Times, Wall Street Journal, Reuters)
As CA wildfires raged on a third day of excessive heat, the National Forest Service announced unprecedented closures of eight forests, shutting all trails, campgrounds and roads within them amid the largest fire season on record: 7,563 wildfires have burned across 2,178,015 acres this year, killing eight people and destroying or damaging 3,867 structures as of Monday — the most land burned by wildfires in California on record. (Los Angeles Times, Axios)
The stock market is a strong Election Day predictor: Since 1928, the incumbent party has won nearly 90% of presidential elections during an S&P 500 upswing. (Wall Street Journal)
Economy
The mortgage market recorded its best quarter in years this spring. Refinancings, up more than 200% from a year ago, drove the increase. Mortgage rates hit new lows multiple times this year, falling below 3% for the first time in July. The low rates have made millions more Americans eligible to save money on their monthly payments. Purchase mortgages, though, fell 8% from a year earlier. (Wall Street Journal)
The euro has climbed 5.6% against the dollar this year, its biggest advance since 2017. On Sept. 1, it surpassed $1.20 for the first time since May 2018. The currency is near an all-time high on what is known as a trade-weighted basis. That means the euro has also strengthened against the currencies of other major trading partners, including China and the U.K. (Wall Street Journal)
Ireland is officially in recession as its economy contracted by over 6% in 2Q20. Meanwhile, Google backed out of new Dublin office that would have housed 2,000 workers and bolstered the Irish capital's economy. (Irish Post, The Telegraph)
4 ways to design employee experience in the remote work era: 1) Shift from survival to redesign; 2) Move from a “culture of heroics” to processes and systems; 3) Use empathetic leadership to make connections; 4) Enable empowered teams. (MIT Sloan School)
Technology
As America transitions to 5G wireless networks, the U.S. intelligence community sees the Chinese telecom giant Huawei as a systemic security risk. Few, however, are asking why there is no American telecom equipment company. After all, in the 1970s the two largest telecom equipment manufacturers were U.S. companies: Western Electric and ITT. Even in the late 1990s, the two largest were still based in North America: Lucent and Nortel (headquartered in Canada but employing tens of thousands of workers in the United States). In 1999, Lucent was almost three times larger than its next two rivals and was the sixth largest company in America in terms of capitalization. Nortel accounted for over one-third of the capitalization of the Toronto Stock Exchange. By 2008, however, Nortel was bankrupt, and Lucent was a sliver of its former self, having been sold off to Alcatel, a French company, which was later bought by Finland’s Nokia. What happened? How did America go from the world’s leader to not even an also-ran in the span of just two decades? Equally troubling, why did no one sound the alarm bell when there was still time for action? (American Affairs)
Apple announces Sept. 15 event where it’s expected to announce new iPhones. (CNBC)
Shopify, suddenly worth $117 billion, is one of the biggest pandemic winners: The E-commerce platform has tapped into small businesses needing websites, doubling its revenue. (Wall Street Journal)
Xbox Series S design and $299 price are reportedly revealed in leaked image. (Cnet)
Smart Links
Despite deep cuts at tech firms, many keep hiring. (The Information)
The pandemic is reshaping the holiday shopping season. (Axios)
Beyond Meat builds China presence with new production facility — the first foreign plant-based meat specialist to launch manufacturing operations there. (Financial Times)
Peloton rides Covid-19 wave, adding products, cutting bike price. (Wall Street Journal)
French Open to allow spectators despite coronavirus surge. (ESPN)