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Quartz Daily Brief—Europe edition—Baidu buys app store, Loblaw buys drug store, UK inflation in store

Published This article is more than 2 years old.

What to watch for today

The UK could notch its highest inflation in more than a year. The consumer price index is expected to have risen by 3% in June, driven by higher fuel costs. If inflation exceeds the 3% mark, Bank of England governor Mark Carney will have to write an open letter to chancellor George Osborne explaining why inflation deviated more than one percentage point from the central bank’s 2% target.

The Bank of Canada’s lack of haste to raise rates. New governor Stephen Poloz could signal a longer period of ultra-low interest rates as the economy hasn’t yet seen the lift-off that the central bank has been anticipating since last year.

Political uncertainty in Spain. Prime minister Mariano Rajoy rejected calls for his resignation after his party’s former treasurer testified that Rajoy had accepted bribes. Rajoy is facing increasing pressure from the opposition, media, and even his own People’s Party to step down.

A flurry of earnings from big US companies. Goldman Sachs is expected to report strong profits, as investors look for strength in investment banking and additional upside in trading. Analysts are anticipating weak display advertising revenue (paywall) from Yahoo, as Marissa Mayer’s internet company faces competition and struggles to establish a leading position in the fast-growing mobile area. Coca-Cola’s profits may rise slightly on flat revenue, as poor weather and soft economic conditions dented demand. Johnson & Johnson is expected to report a 7% increase in profits thanks in part to the success of new drugs such as blood-thinner Xarelto.

While you were sleeping

Baidu bought an app store for $1.9 billion. The Chinese internet giant, which has struggled with a new wave of mobile and social media competitors, bought 91 Wireless from part-owner NetDragon Websoft and other shareholders.

Mexican drug boss captured. Notoriously brutal Zetas boss Miguel Angel Trevino “Z-40” Morales, head of Mexico’s most violent drug trafficking cartel, was apprehended by Mexican marines in a major victory for President Enrique Pena Nieto.

Details emerge in GlaxoSmithKline’s China bribery probe. Chinese authorities say the drugmaker used travel agencies and consulting firms to funnel 3 billion yuan ($162 million) in illicit payments to doctors and hospitals, and received “sexual kickbacks” in return. Four GSK executives have been detained.

Loblaw bought a pharmacy chain for $12 billion. Canada’s biggest retailer will acquire Shoppers Drug Mart in a cash and stock deal. The acquisition will give Loblaw a foothold in smaller, urban markets and access to the fast-growing health and wellness market.

Citigroup’s profits soared 42%. Increases in trading revenue and loan demand from emerging markets helped push second-quarter profits to $4.2 billion (paywall.) Citi said, however, that emerging markets are growing more slowly than it had initially expected.

 How do you say “I’m lovin’ it” in VietnameseMcDonalds will open its first restaurant in Vietnam next year.

Quartz obsession interlude

Gwynn Guilford on why it is a bad idea for foreign investors to buy indexes that track Chinese markets: ”Over the past 20 years, the MSCI China Index—the first index to allow a broad base of foreign investors to buy into the Chinese stock market—has performed dismally compared with the S&P 500 index, as Bloomberg points out. The Hang Seng China Enterprises Index, which tracks Chinese stocks listed on the Hong Kong Exchange and is another avenue for foreigners to invest in China, has also performed poorly.” Read more here.

Matters of debate

American men are the worst free riders at work. Assigning individual responsibilities and reducing the size of teams can help tackle the problem.

An estimated 380 million Arabs derive their income from the shadow economy. Giving them the right to do business and the protection of law is the answer to the growing unrest.

The Middle East beats the West in female tech founders. But that’s not necessarily a good thing—educated women often can’t get jobs elsewhere.

Latvia could destabilize Europe. New laws that will take effect in 2014 could make it the EU’s latest tax haven.

African-Americans should move to Africa, as their safety can no longer be guaranteed in the US. So says Senegal-born music star Akon in the wake of George Zimmerman’s acquittal.

Surprising discoveries

The most expensive home for sale in the US is also the most heavily mortgaged. A Connecticut estate with a $190 million price tag is linked to $120 million in debt.

South Korea’s family-owned conglomerates are becoming even more dominant. Exports by the top 30 chaebols accounted for 82% of South Korea’s GDP in 2012, up from 53% in 2002.

There’s a secret message in the new Wendy’s logo. The US fast-food chain included an homage to “Mom”—unintentionally, it says.

Tyrannosaurus rex wasn’t just a scavenger. Researchers discovered the dinosaur’s tooth in the spine of an animal that survived an attack, which they say proves that the T. rex was a hunter.

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