What to watch for
Respite for Taiwan’s exporters? Exports orders are expected to have stabilized in June after falling for four consecutive months. The government in May cut Taiwan’s growth outlook as it grappled with slowing demand from China, its largest export market.
The US and India work on boosting business ties. US vice president Joe Biden arrives in New Delhi on a four-day visit, also aimed at tackling climate change and defense cooperation issues.
Growing strength in US residential real estate. Existing home sales are forecast to have increased in June to the highest level since November 2009, as buyers rush to lock in mortgages before rates head higher.
Earnings to watch: Netflix is expected to post robust earnings driven by strong subscriber additions and measures to control costs. The US video streaming service is riding high after bagging 14 Emmy nominations for its original programming last week. Fast food chain McDonald’s could struggle to meet investors’ expectations as global economic weakness continues to crimp demand (paywall).
A wave of US IPOs. Eleven companies are on tap to price stock market offerings this week, including energy firms Phillips 66 Partners, which is looking to raise as much as $315 million, and Jones Energy, which is looking at a $252 million issue. The spike in IPO activity is primarily due to the spillover from the July 4th holiday, when companies generally don’t do roadshows or price issues.
Over the weekend
Japan’s ruling party won a sweeping victory. Prime minister Shinzo Abe’s ruling coalition won at least 76 of the 121 seats up for grabs in the 242-seat upper house of parliament. The victory will put the coalition in charge of both houses of parliament for the first time since 2007, and gives Abe the mandate to continue with his ambitious plan for economic growth.
The US central bank mulls restricting banks’ activities. The Federal Reserve is reviewing a 2003 decision that let deposit-taking banks trade physical commodities such as aluminum. The top 10 banks generated about $6 billion in revenue from commodities, directly and through related financial products, last year. Critics of that practice allege it’s too risky and creates conflicts of interest.
Deutsche Bank will shrink to meet leverage targets. Germany’s largest lender by assets is reportedly looking to trim its balance sheet by up to 20% (paywall) to about €1 trillion in the next two and a half years. The move will help Deutsche meet European regulations that call for a minimum leverage ratio of 3% in five years’ time.
Egypt starts amending constitution. A 10-member panel of legal experts, appointed by interim President Adly Mansour, will submit draft changes within 30 days. The previous constitution framed by the government of ousted Islamist President Mohammed Morsi has been suspended and the new changes are a vital first step in the road to elections that the military has promised to hold in six months.
Dropbox bought a shopping loyalty app maker a month after it shut down. The US online storage company acquired Endorse, maker of a mobile app that offered cash-back deals to shoppers when they bought products from brands including PepsiCo and Procter & Gamble.
Quartz obsession interlude
Gina Chon on how Microsoft and Steve Ballmer have a major shareholder problem: “Activist investor ValueAct has been in talks for a few months about getting a seat on the technology company’s board, according to sources. Microsoft had been resisting, but its recent performance—it lost $33.7 billion in market value on Friday—puts more pressure on Microsoft and its CEO Steve Ballmer to answer to investors.” Read more here.
Matters of debate
China’s interest rate reforms may serve to shield indebted state firms and local governments. Giving banks the freedom to set lending rates may be less about issuing new loans than about keeping old loans from going into default.
Media bosses are undermining democracy in Turkey. The protests in Istanbul were downplayed by news channels run by media bosses who have other business interests and are submissive to the government.
Australia is passing the buck by paying Papua New Guinea to take refugees asking for asylum. Diverting asylum seekers arriving by boat is an act of ruthless electioneering.
Online shopping boosts in-store sales. Customers often use “Buy Online, Pick Up in Store” option not as a way to buy goods, but as a dependable way to check brick-and-mortar inventory.
Black boxes in cars can compromise owners’ privacy. Data recorders in cars can be used to find safety problems and as evidence in accidents and criminal cases, but also raise privacy concerns.
750 million phones could be vulnerable to attacks. A flaw in the encryption technology used in some SIM cards could enable cyber criminals to take control of a person’s phone.
Lose weight to earn gold! Dubai’s government will give residents a gram of gold, worth about $45, for each kilogram (2.2 pounds) lost as part of a month-long campaign to fight obesity.
Later retirement could lower risk of dementia. Scientists in France found that those who retired at 65 were 14% less likely to be diagnosed with dementia than those who retired at 60.
The US dropped unarmed bombs on the Great Barrier Reef. Two American fighter jets dropped four unarmed bombs into Australia’s Great Barrier Reef Marine Park last week when a training exercise went wrong.
What Bill Gates is reading this summer. There isn’t a single book about computing or technology in the Microsoft co-founder’s reading list.
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