Quartz Daily Brief—Americas edition—US embassy closures, service data deluge, tainted Kiwi milk powder

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What to watch for today

Diplomatic lockdown. The US extended its closure of embassies in the Middle East and Africa by a week, citing an unidentified terrorist threat and chatter between militants that looks “very reminiscent of what we saw pre-9/11.” US security forces are stepping up security and a worldwide travel alert has been issued.

Trouble in Tunisia. Tensions are rising after the police shot dead an Islamist militant and two soldiers were killed in a blast near the Algerian border. Competing rallies over the weekend by the supporters of the moderate-Islamist government and the secular opposition have also raised concerns over the growing political crisis.

Turkey awaits an important verdict. The trial of more than 270 people including the country’s former army chief who are accused of plotting to overthrow the government is expected to conclude on Monday.

Service data from the US. Service industries are forecast to have expanded at a faster pace in July than in June, due to improvements in the jobs market and the rebound in the housing industry.

EADS under pressure. Activist hedge fund TCI is demanding that the company, which is changing its name to Airbus, sell its €4 billion ($5.3 billion) stake in French defense firm Dassault Aviation.

Over the weekend

HSBC earnings miss. Europe’s biggest bank’s profits rose 10% but fell half a billion dollars short of analyst expectations, sending shares down 3.4%.

European services data deluge. The Euro zone’s service sector posted slow but significant growth—the first rise in activity since January 2012. Downturns eased in Italy, France and Spain, and Germany reported moderate growth. The UK notched its best performance since the financial crisis began, with its primary services index smashing forecasts at 60.2 (a score over 50 indicates expansion). Sweden also swept back into growth, and Russia performed slightly worse in July than June.

China services inched higher. The official non-manufacturing index showed the first pick-up in growth since March, rising to 54.1 in July from 53.9 in June. Meanwhile, Taiwan reported inflation at a surprise three-year low in July, driven by deflating food prices, and India’s service sector shrank for the first time since October 2011.

Berlusconi stood by his coalition. The former Italian prime minister relieved some political tension amid fears that his tax fraud conviction would drive a wedge in the country’s fragile ruling coalition. In an emotional statement, he assured a party rally that the government must “forge ahead.”

Hassan Rouhani was sworn in as Iran’s president. The moderate cleric who won a landslide victory in the June 14 elections called on the West to abandon the “language of sanctions” in dealing with his country. The US responded saying that it would be a “willing partner” if Iran engages seriously on the international concern over its nuclear program. Rouhani’s appointment of a US-educated foreign-minister has encouraged skeptics.

Obama administration came to Apple’s rescue. The White House overturned the International Trade Commission’s ban on the import and sale of some iPhones and iPads, handing Apple a significant victory in the patent battle with South Korea’s Samsung. The administration said its ruling was due to the ban’s “effect on competitive conditions in the U.S. economy and the effect on U.S. consumers.”

A fire sale for print publications. The New York Times Company sold the Boston Globe to John Henry, the principal owner of the Boston Red Sox baseball team, for $70 million, a fraction of the $1.1 billion New York Times paid for it 20 years ago. IAC/InterActive Corp agreed to sell Newsweek to IBT Media, the publisher of the International Business Times website.

China and Russia banned New Zealand milk powder. Kiwi dairy exporter Fonterra recalled up to 1,000 metric tons of baby formula and other products after discovering a strain of bacteria that can cause botulism. The tainted batches were produced in May of last year, prompting New Zealand Prime Minister John Key to angrily accuse the Fonterra of taking undue risks with one of the country’s biggest exports. Despite several incidents of tainted baby formula, most Chinese women still shun breastfeeding.

Quartz obsession interlude

Christopher Mims on why Google must come to grips with how it enables the surveillance state. “Google, more than perhaps any other company, is aggressively putting sensors and the software to activate them into our environment. The just-unveiled Moto X phone from Google subsidiary Motorola has a custom microchip that allows it to listen for voice commands literally all the time, even when the phone is “asleep”. Google’s Chrome web browser now supports voice commands; that means it’s also rolled into every Chrome OS notebook computer, which run Google’s answer to Windows. Google’s face-based computer, Google Glass, responds to voice commands. Even though it was Apple that took voice control mainstream with the Siri system on its iPhone, voice is a dominant theme in the future of Google, and is clearly slated to make its way into every product the company makes.” Read more here.

Matters of debate

Marijuana belongs at farmers’ markets. It’s a vegetable like any other, and should be sold next to tomatoes and arugula in US states where it’s been legalized.

There isn’t much point in economic analysis. Politicians and the pundit class don’t listen to it.

The state, not the private sector, drives innovation. History shows that government-funded early-stage research produces the biggest breakthroughs.

Al Qaeda just terrorized the US with nary an ounce of C4. Embassy closures and travel warnings scream loud and clear: the war on terror is far from won.

$7 trillion in forex reserves are complicating economic policy making in Asia. It’s time to consider ways to bring more of those funds home.

Millionaire teachers and a bidding war for education. Lessons the world must learn from South Korea’s rise as an academic superpower.

Surprising discoveries

Shakespeare invented over 1,700 commonly used words. They include “bedroom,” “torture,” “rant” and “amazement.

Some politicians start young. A four-year old boy won the race for mayor in a small Minnesota town—for the second time.

EADS and Rolls Royce are working on hybrid aircraft. The “Prius of the skies” is some way off, but getting closer.

The human brain has a GPS. Scientists identify the cell grid that helps people to keep track of their location while navigating an unfamiliar environment.

Our best wishes for a productive day. Please send any news, comments, Shakespeare coinages and untainted milk powder to You can follow us on Twitter here for updates during the day.

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