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Good morning, Quartz readers!
Here’s what you need to know
China’s central bank cut a key lending rate by 10 basis points. It hadn’t signaled any immediate plans for rate cuts, and oil prices plunged on the news of the country’s slowing economy. (See more below).
Walmart and Paramount+ struck a streaming deal. The entertainment company’s content will be a perk for Walmart’s subscribers in what’s largely seen as a challenge to Amazon. (More on Walmart’s upcoming earnings below).
Narendra Modi pledged to turn India into a developed country in 25 years. On the 75th anniversary of India’s independence from British rule, the prime minister said the world’s view of India is changing.
China’s airlines could exit US stock markets. The possible departure added skepticism that both countries can reach an agreement on disclosure rules.
Thailand said it’ll invest 2.2 trillion baht ($62 billion) in industry over the next five years. The investments will target electric vehicles and medical technology as the country aims to boost economic growth.
Vladimir Putin offered to expand relations with North Korea’s Kim Jong Un. The Russian president’s message to North Korea comes as the Kremlin looks to increase weapon supply for its war in Ukraine.
The Taliban has ruled in Afghanistan for a year. Women continue to be denied their basic rights, including access to higher education, and tens of thousands of Afghans looking to leave remain in limbo.
What to watch for
Walmart and Target report earnings today and tomorrow, respectively. The US retail giants are considered to be bellwethers not just of the state of their industry, but overall American spending habits.
Both Walmart and Target have issued profit warnings as excess inventory forced a reduction in the prices of goods like apparel, which the retailers had stocked up on to avoid supply disruptions. Walmart, the largest private employer in the US, also cut about 200 corporate roles this month.
Analysts expect Walmart to report a higher revenue but lower earnings on a year-over-year basis. A similar scenario is expected for Target. A closer look at the retailers’ areas of growth can show how customers’ habits are adapting to inflation. While US inflation didn’t grow in July, food prices were still rising—which should boost Walmart and Target’s revenue in the grocery aisle, but might do little to lower those other inventory piles.
China can’t afford to worry about inflation
The about-face China’s central bank did on rate cuts caught markets and analysts off guard. It’s a strategy shift that indicates just how challenging an economic situation Beijing faces as it battles covid flare-ups, imposes pandemic lockdowns, and contends with a real estate meltdown.
The real question is if the rate cuts will actually do anything to boost China’s economy. If new economic data for July published yesterday is any indication, it’ll be a steep uphill battle. Retail sales, industrial output, and fixed asset investment last month all missed expectations by a wide margin.
As inflation rocks economies globally, for China’s central bank, recovery is still its top priority. Any worries banking authorities have about inflation will have to take a backseat to the more urgent task of trying to rev up the country’s economic engine.
Redbox’s wild ride ends quite predictably
Redbox, one of the strangest meme stocks of the retail-trading era, came to its utterly unsurprising, yet somehow still inexplicable, conclusion last week when it sold to Chicken Soup for the Soul Entertainment for $370 million.
While Redbox—the money-losing DVD vending machine company—may have been one of the dumbest meme stocks, there’s no denying it had many of the typical ingredients that have made companies like GameStop and Blackberry meme stalwarts. Redbox’s stock was cheap; it had some customer-facing nostalgia; and there was a lot of short-selling going on.
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