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 an estimate of 1.7%, thanks largely to strong exports, raising expectations that the central bank will start winding down its stimulus program as early as September. Weekly jobless claims are expected to fall.
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. Beauty products giant L’Oréal may be bogged down by currency headwinds, while cloud computing firm Salesforce.com is expected to report a drop in earnings as competition remains tough. Campbell’s Soup and Krispy Kreme will also report.
Wait and see on Syria. The United States is assembling evidence of the Assad regime’s use of chemical weapons, and will press for attacks before the UN Security Council. US Congressmen urged the White House to secure legislative approval before ordering a military strike.
While you were sleeping
The smoking spreadsheet. A probe into JP Morgan Chase’s hiring practices in China has uncovered a spreadsheet the bank made linking staff appointments 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. 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.
A key Google executive jumped 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 now involved with Google co-founder Sergey Brin, who has split with his wife.
The Philippine economy bucked the trend. GDP expanded 7.5% in the three months to June from the same period last year thanks to domestic spending, defying a regional slowdown caused by flagging exports and a capital flight. The main stock index traded up on the GDP news, after taking a beating during the recent emerging market rout.
raised interest rates 50 basis points to 7% in an effort to counter falls in the rupiah.
Zurich Insurance’s chairman resigned. Josef Ackermann left his post at Europe’s number three insurer under pressure from the family of the company’s chief financial officer, who was found dead on Monday from an apparent suicide. Ackermann will be the fourth senior person to leave Zurich in just over a year.
Qantas back in the black. The Australian airline returned to profit after cutting unprofitable routes and shedding jobs and assets, reporting full year net profit of A$6 million ($5.37 million), compared to a net loss last year of A$244 million.
Slash and sell is working in France. Carrefour reported first half net profit (paywall) of 902 million euros ($1.2 billion), compared to a loss of 31 million euros in the same period last year, after a restructuring and sale of several foreign assets to streamline operations. Meanwhile, Vivendi said its second-quarter net profit was 501 million euros ($665 million), up 7.5% from last year, boosted by the planned sale of an African mobile operator and the US game-maker Activision Blizzard. France’s Pernod Ricard, the maker of Martell cognac, also reported strong earnings thanks to sales in China and India.
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 US banking system isn’t fixed. Even Hank Paulson is disappointed with bankers’ actions since Lehman collapsed, and some fundamental problems remain.
Twitter could learn three important lessons from Facebook’s IPO. Balancing delay, hype and investor euphoria is a tough one, but it can be done (paywall).
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.
Putin doesn’t mind going shirtless in public, but lingerie is too far. An artist who painted the Russian leader in women’s underwear has fled the country.
There is water on the moon. A NASA spacecraft has found water on the lunar surface, which may offer insight into how the moon was formed.
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.
and shopping for deals.