Good morning, Quartz readers!
What to watch for today
Jacob Zuma secures another term. His ANC party is on track to take 64% of the vote in the South African election, despite discontent about inequality and corruption. The election marks South Africa’s 20th year of democracy.
Janet Yellen faces some unscripted questions. Market players are itching to know when the US Federal Reserve will raise interest rates, and the Fed chair might drop a few clues in testimony before Congress—particularly in light of last week’s surprisingly strong jobs data.
Vietnam and China are in a naval face off. Ships from the two nations collided in the South China Sea, as Vietnam tried to stop China from setting up a deep-water oil rig near the disputed Paracel Islands. No casualties were reported, but the risk of further violence is escalating.
Twenty-First Century Fox struggles to impress. Poor ratings for broadcast TV will drag on the company’s results. Fox has been pushing its sports coverage but investors will be hoping to see concrete growth opportunities after a weak second quarter.
While you were sleeping
Thailand’s prime minister was ousted. The country’s constitutional court ordered the removal of Yingluck Sinawatra for abuse of power in a 2011 personnel reshuffle. The decision will provoke protests by her supporters, who believe the courts are biased towards an urban elite.
Russian aggression spurred a Finnish-Swedish defense pact. The two non-NATO countries announced they are looking in to pooling their defense resources. Finland shares an 830-mile border with Russia, while Sweden’s armed forces are insufficient to defend the country.
Siemens announced a major overhaul. The company is buying energy assets from Rolls Royce, transferring a majority stake in its Austrian metals business to Mitsubishi Heavy Industries, streamlining its divisional structure, and spinning off its hearing aids business. It also said it would not be forced into buying Alstom.
HSBC can’t cut costs fast enough. The British banking giant reported a 20% drop in its first-quarter profit, as the woes in its investment bank outpaced efforts to restructure and simplify the sprawling group. The bank has cut more than 40,000 jobs over the past three years.
China’s service industry expansion slowed… The Markit/HSBC purchasing managers’ services index fell to 51.4 in April, from 51.9 in March, but stayed above the 50 mark that separates expansion from contraction. Although services are still growing, it’s not enough to offset the worsening slowdown in manufacturing.
…And Standard & Poor’s warned over local government debt. Budgetary strains created by China’s slowing property market could have “very wide-ranging implications for the entire economy and also credit markets,” said the ratings agency. There is already plenty of evidence that the country’s property bubble may already be bursting.
Quartz obsession interlude
Gwynn Guilford, Lily Kuo and Nikhil Sonnad explain Alibaba’s vast empire. “Alibaba, which is expected to file for its IPO any day now, isn’t just the ‘Amazon of China’—it’s also the Dropbox, PayPal, Uber, Hulu, ING Direct, and more. Though Google has its fingers in a similarly high volume of pies, its enterprises, unlike Alibaba’s, are exclusively digital. Alibaba’s distinct businesses resemble more than a dozen major Western companies, by our count—a phenomenon we’ve sketched out in the graphic below. In the text that follows, we unravel some of that complexity—and explain how Alibaba has expanded on its way to a New York listing.” Read more here.
Matters of debate
The US doesn’t scare its foes or reassure its friends anymore. With Russia bullying its neighbors and Syria killing its people, what ever happened to Globocop?
Business and politics do mix. Global business leaders should use next week’s St. Petersburg economic forum to speak up to Vladimir Putin (paywall).
Robot cars need moral programming. Minimizing harm to others might mean hitting the motorcycle driver with a helmet, instead of the one without.
The US needs to choose its approach to immigration reform. It can either be like Sweden or Qatar, but not both.
We should stop looking for life on Mars. The oceans of Jupiter’s moon Europa would be a much more likely place to search.
Breeding mosquitos is a crucial but awful job. A malaria researcher has to feed the mosquitos with her own blood.
Legal weed is putting cartels out of business. Mexican cannabis farmers are closing up shop, as legal US supply is drastically lowering marijuana prices.
India found a solution to its public peeing problem. A masked group is spraying wayward urinators with a water cannon.
Ten hedge fund managers made $15 billion last year. That’s more than the GDP of Jamaica or Iceland.
China plans to reverse-engineer breast milk. The $1.6 million project will attempt to create a more natural form of baby formula.