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Equity markets eased on Thursday on mounting concerns about the outlook for the global economy, after days of violent movement in government bonds pointing to slower growth and inflation than previously expected.
Stocks fell first in Asia before negative sentiment spread to Europe and then to Wall Street – a move that analysts traced back to expectations that US economic growth would peak while signs of a slowdown in China emerged .
Everywhere on Wall Street, investors are suddenly being forced to reposition themselves in light of what Jim Caron, a portfolio manager at Morgan Stanley Investment Management, called “the growth peak, inflation peak and policy stimulus”.
The US S&P 500 index closed 0.9 percent lower, while the technology-oriented Nasdaq Composite fell 0.7 percent. Both indices had set records in the past few days. In Europe, the continent-wide Stoxx Europe 600 lost 2 percent after the Hong Kong Hang Seng Index ended its trading session 2.9 percent lower. Spain’s Capricorn closed 2.3 percent and Italy’s FTSE MIB lost 2.6 percent. The FTSE 100 in the UK lost 1.7 percent.
Amid the choppy moves in government bond markets on Thursday, Robert Armstrong asks in our Unhedge newsletter: Why did it take so long for US government bond yields to plummet? Sign up here to receive the newsletter in your inbox every weekday.
Five more stories on the news
1. Senators call for investigation into Didi’s IPO Senators Bill Hagerty and Chris Van Hollen urged the Securities and Exchange Commission to investigate whether Didi Chuxing misled American investors prior to going public. They asked regulators to determine if Didi was sufficiently accommodating in relation to his contact with Chinese regulators prior to listing his shares.
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China’s crackdown on Didi reverberates: Keep, China’s most popular fitness app, pulled out of plans to go public in the US last week when Chinese regulators announced an investigation into Didi’s privacy concerns.
2. Biden defends US withdrawal from Afghanistan Joe Biden said Thursday that the US military mission in Afghanistan will end on August 31, defending his decision to withdraw American troops after more than 20 years of fighting despite the threat of a resurgent Taliban. Many Afghan specialists are fleeing the country before the US withdrawal. (FT, WSJ)
3. ECB changes inflation target The European Central Bank set a new inflation target of 2 percent and said it could tolerate temporary moves beyond that point to give policy makers the flexibility to keep interest rates at historic lows for longer.
4. The Malaysian coalition partner calls on the Prime Minister to resign Ahmad Zahid Hamidi, president of Umno, the party that has dominated Malaysian politics for decades, withdrew support from the ruling coalition, saying Prime Minister Muhyiddin Yassin “failed” to address an economic slowdown or fight the pandemic.
5. India’s Zomato goes public for $ 1.25 billion The Food Delivery Group announced it would launch its $ 1.25 billion initial public offering next week to capitalize on increased order demand as consumers migrated online during the pandemic. Zomato will lead a wave of technology IPOs in the country this year.
Coronavirus digestion
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The Tokyo Olympics will take place largely without spectators after the Japanese government declared a Covid-19 state of emergency in the capital.
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The Director General of the World Health Organization said the number of global Covid-19 deaths, which has exceeded 4 million, “probably underestimates the total”.
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In our new First Person series, florists, fishmongers, writers, oil towns and auto insurers show how they have cope with the effects of the pandemic.
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Increasing infection rates, driven by the Delta variant, have the Israel reintroduce restrictions for the first time since January.
Follow our live coronavirus blog and sign up for our coronavirus business update newsletter for more Covid-19 news.
The next days
G20 meeting Finance Ministers will open their two-day meeting in Venice today. The main item on the agenda will be the proposed global minimum corporate income tax, under the agreement 130 nations agreed last week at the OECD. Amid the talks, Ireland is concerned about losing its “sacred” low tax system.
Inflation data from China Today’s numbers show a sustained spike in the country’s factory gate prices, which have skyrocketed this year on a global commodities rally.
Euro 2020 final: England versus Italy England will play the first final of a major football tournament in 55 years on Sunday after beating Denmark 2-1. Scientists have warned England’s exploits could spark a surge in coronavirus cases.
Fans in London celebrate during the semi-final match between England and Denmark. © Leon Neal / Getty
Stay up to date on important business, economic, and political stories in the coming days with FT’s revamped Week Ahead newsletter. Subscribe here. And don’t miss our FT News Briefing audio show – a brief daily overview of top global stories.
What else we read
Hong Kong’s legal system bears the scars of security law After Beijing introduced its national security law in Hong Kong last year, many business people believed the changes would spare the territory’s courts, modeled on the UK’s common law legal system. But a year later, analysts said the law was quick to undermine legal norms in the city.
China’s rivals Boeing and Airbus will join the battle for the skies With the launch of China’s first passenger aircraft, the single-aisle C919, an industry dominated by Europe’s Airbus and its US competitor Boeing will face a new, deeply rooted and politically connected competitor: the state-sponsored aerospace champion Comac.
America’s history, wars, race, and the flag Should the story make you proud or ashamed? Apologetically nationalistic or penitent, iconoclastic, asks Simon Schama. History is not a self-congratulatory or self-flagellation business. It’s in the truth business. America’s founding myths didn’t start with “bright” activists, but were there from the start, he writes.
Tell me lies, tell me cute little VIEs In the happy days of October 2019, Alphaville conducted a thought experiment: Given the legal gray area in which variable interest companies (the structure that allows Chinese companies to list on US stock exchanges) operate, what would happen if China decided would just forbid them? directly? It was a crazy idea – until this week, writes Jamie Powell.
Here’s how to prepare for life after an intense career Assumptions about the traditional career path and its duration have been overturned. Retirement is an opportunity to develop skills. Here is a guide to help you prepare for “third age”.
beauty
Luxury brands are increasingly switching from couture to cosmetics in order to attract new, often younger, consumers who cannot necessarily afford a 3,000 euro handbag. However, the roots of this diversification go back a century to the introduction of Coco Chanel’s Perfume No. 5.
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