What to watch for today
Strong economic data strengthen the Fed’s hand. Second-quarter US growth is expected to be revised upwards to 2.2% from a first estimate of 1.7%, thanks largely due to strong exports, raising expectations that the central bank will start winding down its stimulus program as early as September. Weekly jobless claims too are expected to fall.
An emergency rate hike in Indonesia. The central bank has called for special policy meeting and will probably raise rates to support its currency, which has fallen 12% this year. Rates are already up 75 basis points since June, but slowing growth forced the central bank to keep them steady at its last scheduled meeting in August.
Diplomacy in the South China Sea. Defense ministers from across Southeast Asia, China, Japan and the US will meet again on Thursday (paywall) in an attempt to defuse tension over disputed territory in the South China Sea, while creating a diplomatic framework designed to avoid conflict.
Earnings medley. The world’s second biggest retailer, Carrefour, is expected to post improved performance (paywall) on the back of a strong showing in its home country, France. Advertising giant WPP’s earnings are likely to be overshadowed by what the management has to say about the merger between its rivals Publicis and Omnicom. Beauty products giant L’Oréal will probably be bogged down by currency headwinds, while cloud computing firm Salesforce.com is expected to report a drop in earnings. Campbell’s Soup, Krispy Kreme, Pernod Ricard and Vivendi are some of the other companies that will report.
While you were sleeping
David Cameron was forced down on Syria. The British prime minister’s attempt to seek parliamentary approval for military action in Syria backfired in the face of domestic and international pressure, all but forcing him to wait for a report from the UN chemical weapons team in Syria and an almost certainly doomed attempt to win approval from the UN Security Council.
The smoking spreadsheet. A joint probe by US regulators and internal investigators into JP Morgan’s hiring practices in China has uncovered a spreadsheet indicating that the bank appointed new staff to curry political favor linked to specific deals. Over 200 hires are under scrutiny in an attempt to establish whether JP Morgan violated bribery laws.
Verizon is gearing up, again, to buy out Vodafone. The two companies are preparing for a split as Verizon seeks funding to buy out Vodafone’s 45% share in their Verizon Wireless joint venture, a deal worth around $130 billion which would make Verizon the sole owner of the most profitable mobile phone company in the US.
Google founder splits with wife… Co-founder Sergey Brin and his wife of six years, 23AndMe co-founder Anne Wojcicki, are living apart following Brin’s alleged involvement with a Google employee. Although the couple’s joint assets and projects are substantial, AllThingsD reports that a prenuptial agreement ensures no impact on Google if the couple divorces.
…as a key executive jumps ship. Top Android executive Carlos Barra is defecting to China’s fast-growing smartphone company Xiaomi. According to AllThingsD, Barra was formerly dating the woman who is now involved with Brin.
Brazil raised interest rates. Its central bank set the key rate at 9%, up half a per cent for the third straight meeting, in an attempt to stem a fall in the country’s currency that has further undermined efforts to tackle stubbornly high inflation.
The Philippine economy bucked the trend. GDP expanded 7.5% in the three months to June from the same period last year, in defiance of a regional slowdown caused by flagging exports and a flight of capital. Domestic spending has propped up the economy, although Manila has not been spared from a recent Asian markets rout.
A US city gets bankruptcy protection. The Californian city of San Bernardino was granted protection by a US federal judge, a decision closely watched by other financially troubled cities including Detroit.
Quartz obsession interlude
Steve LeVine on why, though Syria is roiling oil markets, the real story is the chaos in Libya and Nigeria. “The Syrian oil trade—in which investors are betting on expected US-UK-French retaliation for a suspected Aug. 21 chemical attack by Damascus—is exceptionally speculative (paywall). There are almost no repercussions for oil in the actual theater of war: To affect global oil, hostilities would have to spill into Iraq (a bombing of the Kirkuk-Ceyhan oil pipeline), the Strait of Hormuz (which channels 17 million barrels of oil a day, a fifth of the world’s oil supply) or Saudi Arabia (a roiling of local Shias)… The real threat to oil prices—which has already caused a 16% price surge since April despite a reasonable global surplus of crude—comes from other geopolitical chaos in two key supplier nations: Libya and Nigeria.” Read more here.
Matters of debate
The price of immigration is mostly borne by other migrants. New arrivals rarely compete with the indigenous population. Instead, they compete with each other.
Bombing Syria isn’t about helping Syrians. The West doesn’t want to get dragged into Syria’s conflict; it just wants to send the message that no country can use chemical weapons with impunity.
An unlikely alliance is defending solar power. Hippies and libertarians who see independent power generation as a right are joining forces.
3D Skype calls are on the way. The company is developing a system to create “body doubles” for when you can’t make it to meetings.
Gin and tonic was the British Empire’s secret weapon. It was used as an effective anti-malaria medicine.
The internet is killing brothels. Clients in Nevada are going online instead and looking for deals.
Mini human brains grown from stem cells. The pea-sized structures aren’t conscious, but the breakthrough could help treat rare disorders like autism and schizophrenia.