The Economist - 20 July 2024

Год выпуска: July 2024

Автор: The Economist Newspaper and The Economist Group

Жанр: Экономика/Политика

Издательство: «The Economist Newspaper Ltd»

Формат: PDF (журнал на английском языке)

Качество: OCR

Количество страниц: 76

A TICKET TO WHERE?

• Why J.D. Vance is more consequential than the average veep pick: leader, page 7.
• His selection means that Donald Trump's influence may linger longer, page 18.
• Vive Ie Vance! An honorary Frenchman in America sends Europe into panic mode: Charlemagne, page 42.

The bull market’s blind spot

• Euphoric investors are ignoring growing political risks: leader, page 8.
• Stocks are on an astonishing run. What could bring it to an end? Page 57.

Gaza’s grim post-war prospects

• There is too much magical thinking on Gaza. Time for grim realism: leader, page 10, and analysis, page 16.
• Will Binyamin Netanyahu's visit to America repair or weaken ties? Page 14.

Will bird flu cause a pandemic?

• As isolated human cases of H5N1 emerge, now is the time to prepare: leader, page 11.
• The science of avian flu, page 64.

Schools brief

• A primer on Al, page 55.

The world this week Politics

• The FBI began an investigation into why a 20-year-old man tried to assassinate Donald Trump. Questions were raised about how Thomas Matthew Crooks was able to get so close to Mr Trump at a campaign rally in rural Pennsylvania. His volley of shots from a nearby rooftop came close to killing the Republican, grazing his ear. One man was killed and two seriously injured. Secret Service snipers shot Crooks dead. The motive for the assassination attempt was not immediately clear. Crooks was a gun enthusiast and described as a quiet loner, but with no mentalhealth issues. Mr Trump left the stage exhorting his supporters to “Fight! Fight! Fight!”

“A working-class boy”

• Two days after the shooting Mr Trump, his ear bandaged, attended the Republican convention in Milwaukee and chose J.D. Vance as his running-mate. Mr Vance, a senator from Ohio for just 18 months, is best known for his “Hillbilly Elegy”, a memoir of growing up poor surrounded by drug-addicted relations. If Mr Trump wins in November Mr Vance, as vice-president, will have the deciding vote if the Senate is tied. He is notably a firm opponent of aid to Ukraine.
• The judge overseeing legal proceedings against Mr Trump over his misuse of classified documents dismissed the case, finding that the appointment of the special counsel who laid the charges was unconstitutional. The ruling could upend the Justice Department’s ability to appoint special prosecutors to investigate specific acts of misconduct.
• Adam Schiff, a prominent Democratic congressman, called on Joe Biden to withdraw from the presidential race. Democratic apparatchiks want to make Mr Biden’s nomination official before the party’s convention, even though two-thirds of Democrats want him to stand aside. Mr Biden, meanwhile, caught covid again and is self-isolating.
• Israel bombed a compound targeting Muhammad Deif,the commander of Hamas’s militaryforces in Gaza and mastermind behind the attack on Israel on October 7th. Israel said the strike killed Raafa Salamah, a Hamas commander, but it was not clear whether Mr Deif was also killed. According to the Hamas-controlled health authority, around 90 people died in the attack.
• Louisa Hanoune, an opposition leader in Algeria, dropped out of the presidential race citing “unfair conditions” in an election scheduled for September. She had been running against Abdelmadjid Tebboune, the incumbent, who is favoured to win.
• Rwanda’s president, Paul Kagame, won 99% of the vote in an election after several of his opponents were barred from the race. The 66-year-old has held power since the end of the Rwandan genocide in 1994.
• Gabriel Attal formally resigned as prime minister of France, as did his entire cabinet, following gains by the hard left and right in the recent parliamentary election. Mr Attal and his ministers are staying on in a caretaker role until a new government is formed. With parliament hung, the parties are bickering over who should get his job.
• Britain’s new Labourgovernment laid out 40 bills for its first parliamentary session. The ambitious agenda includes streamlining the planning process for housebuilding, boosting renters’ rights, creating a state-owned green energy company, re-nationalising the railways and new workers’ safeguards. Labour also announced an early-release scheme for prisoners to ease prison overcrowding.

No welcome in the valleys

• Labour’s Vaughan Gething quit as first minister of Wales four months into the job. His leadership came under strain over a campaign donation from a company run by someone convicted for environmental offences, and other issues. Mr Gething had refused to resign after losing a vote of confidence. The final straw came when several ministers in the Welsh cabinet resigned.
• It emerged that a North Korean diplomat defected to South Korea last November, an embarrassment for Kim Jong Un, North Korea’s dictator. The high-ranking official was based in Cuba.
• Six people were killed in Bangladesh amid protests against quotas for government jobs. Around a third of the jobs are reserved for the families of Bangladeshi veterans who fought for independence, which critics say is discriminatory. Schools and universities across the country were closed until further notice.
• The Pakistani government said it wanted to ban the political party of Imran Khan, the country’s former prime minister, who was imprisoned a year ago. The attempt to outlaw Pakistan Tehreek-e-Insaf comes after the Supreme Court ruled that it was eligible for 23 extra reserved seats in Parliament. Mr Khan’s aide said the ban was “a sign of panic”. Separately 28 people were killed by militants in two attacks on an army base and a health centre.
• The Central Committee of the Chinese Communist Party held a long-delayed four-day meeting in Beijing. A communique said the meeting decided to “place reform in a more prominent position.” It accepted the resignation from the Central Committee of Qin Gang, a former foreign minister who disappeared from public view a year ago.
• The Chinese and Russian navies held joint manoeuvres off China’s southern coast. The drills, including airdefence and anti-submarine exercises, followed a joint patrol by the two navies in the north Pacific.
• In Venezuela 77 opposition activists have been arrested since the start of official campaigning for the presidential election on July 28th according to Foro Penal, an NGO. Polls show that the opposition candidate, Edmundo Gonzalez, would easily defeat Nicolas Maduro, the authoritarian incumbent, in a fair vote. The detainees include the security chief of Maria Corina Machado, the opposition’s leader.
• A court in Ecuador sentenced two of the organisers of the murder last year of Fernando Villavicencio, a presidential candidate, to long jail terms. One was a leader of Los Lobos, a criminal gang. But Mr Villavicencio’s family believes others, including politicians, may have been involved.
• Argentina won the Сора America with a 1-0 victory against Colombia. The match was held in Miami and delayed for 82 minutes because of chaotic disorder in admitting football fans to the stadium. America will be a joint host of the World Cup in 2026. In Berlin Spain won the European championship, beating England 2-1.

The world this week Business

• America’s big banks released quarterly earnings. Net profit at JPMorgan Chase rose by 25%, year on year, to $18.1bn. At Morgan Stanley it surged by 41%, to $3.1bn. Goldman Sachs exceeded expectations (for once), more than doubling its profit to $3bn. Citigroup’s net income was up by 10%, but profit fell at Bank of America and Wells Fargo. Excluding Wells Fargo, fees for the other five big banks from investment banking jumped by a combined 40% amid a resurgence in the industry.
• Georges Elhedery was named as the new chief executive of HSBC and will take over from Noel Quinn in September. Mr Elhedery joined the bank in 2005 and has been its chief financial officer since early 2023. He grew up in Beirut and studied at the Ecole Polytechnique in Paris.
• Kaspersky Lab, a Russian cyber-security firm, decided to wind down its operations in America, a month after the Commerce Department determined that its products posed an unacceptable national security risk and the Treasury Department imposed sanctions on 12 of its executives. Kaspersky strongly denies claims that its anti-virus software collects private data for Russian intelligence. It has worked with numerous American companies in the past, including Microsoft, to root out threats from malware.
• China’s GDP grew by 4.7% in the second quarter, year on year, down from 5.3% in the first quarter. It was the slowest pace of expansion since the start of 2023, underlining weak domestic demand caused by the slumping property market and job insecurity. The sluggish economy has affected many industries, not least luxury-goods companies, which are slashing prices to tempt Chinese shoppers. Richemont, owner of the Cartier brand, Swatch and Hugo Boss released earnings that related various woes in China. Burberry issued a profit warning, in part because of a steep fall in Chinese sales. It replaced its chief executive.
• An equity analyst argued that Apple’s new artificial-intelligence platform will lead to a surge in demand for its products. Apple’s share price briefly jumped to a new high in response. Its stock has surged since its announcement in June of Apple Intelligence, pushing the tech company’s market value to as high as $3.6trn.

End of the sale

• Macy’s terminated discussions with two investment firms seeking to buy it out, claiming the deal was undervalued and financially uncertain. The takeover proposal first emerged in December. The retailer now wants to focus on its turnaround plan, which includes store closures.
• Investors weren’t buying it; the company’s share price plunged by more than 10%.
• Amid a general slowdown in demand for electric vehicles, the boss of General Motors, Mary Barra, said that the carmaker won’t now reach its aim of producing im EVs by the end of 2025 “just because the market is not developing, but it will get there”. For two years the company has stuck to a pro-duction-capacity target of im.
• The British government said it had no plans at the moment to impose tariffs on Chinese EV imports, a stark contrast with the EU, which has set stiff provisional duties on the cars. The EU is split, however, with Germany leading the opposition to the tariffs.
• Britain’s headline annual rate of inflation stayed at 2% in June, slightly above analysts’ forecasts. Services inflation remained sticky at 5.7%. The figures caused some traders to reduce their bets that the Bank of England will cut interest rates in August.
• Chip companies saw their share prices fall sharply, in part because Donald Trump cast doubt on his commitment to defend Taiwan. TSMC, one of the world’s largest chipmakers, is based in Taiwan. The NAS-DAQhad its worse day since December 2022. TSMC later reported a huge surge in quarterly revenue and profit.
• The price of gold reached a new record high of $2,465 a troy ounce. Goldbugs are betting that weaker inflation data will lead to interest-rate cuts in America, and that a Trump presidency will boost the precious metal’s status as a haven for investors.

Hissy-fit management

• Elon Musk threatened to move the headquarters of X and SpaceX from California to Texas because of a new law in the state that stops municipalities from forcing schools to tell parents if their child has changed gender identity. Mr Musk, who is estranged from his trans daughter, said it was the “final straw” in a series of laws attacking “families and companies”. Earlier in the week Mr Musk endorsed Donald Trump for president.

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