Lessons from the market meltdown

At this time’s prime tales

• Ukrainian drones hit a army airfield in Russia’s Lipetsk area whereas Moscow declared a state of emergency in two areas as Kyiv continued its largest assault on Russian soil so far.

• Beijing hit again in opposition to proposed EU tariffs on Chinese language electrical car exporters through a criticism with the World Commerce Group, escalating the trade dispute with Brussels.

• Hargreaves Lansdown, the UK funding platform that pioneered promoting shares and funds on to retail buyers, has agreed to a £5.4bn takeover by a bunch of personal fairness companies.

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Good night.

The market meltdown could also be over, however the tumult that started and ended with contrasting units of jobs information has supplied classes a a lot for international buyers and introduced a brand new concentrate on the state of the US financial system forward of November’s presidential election.

World shares have now recovered most of their losses from Monday’s mayhem, which was sparked by a disappointing US jobs report final Friday. Extra encouraging figures on unemployment claims yesterday appear to have soothed buyers’ issues however the market stays delicate and could possibly be nonetheless susceptible to any hostile information.

Postmortems are in every single place. Classes from a manic Monday embrace to not belief funds that should supply protection from volatility and for knowledgeable merchants to not all take summer season holidays on the same time. Pores and skin within the Sport columnist Stuart Kirk has extra on what ordinary investors can take away from this week’s occasions, whereas actual markets nerds ought to try this take from FT Alphaville.

The prognosis for the US financial system can be on the forefront of the race for the White Home.   

As FT commentator Chris Giles has famous, Democratic presidential contender Kamala Harris ought to be cautious of touting her occasion’s report in authorities on the stump. Though headline indicators are encouraging, a lot is topic to a way of nuance and ambiguity ill-suited to a vicious political marketing campaign, Giles argues.

Earnings updates from US corporations have been filled with warnings about shoppers cutting spending, whereas on jobs, there’s ample proof that positive aspects for low-paid staff haven’t been shared equally, as columnist Soumaya Keynes notes on this evaluation of kitchen workers’s wages at McDonald’s.

And as Washington bureau chief James Politi notes right this moment, voter discontent about the price of dwelling has the capability to finish the “sugar rush” of optimism Harris has loved since she joined the presidential race.

Harris has centered on defending the “center class” from rising prices and bolstering the social security web, whereas criticising her opponent Donald Trump’s plans for brand spanking new tax cuts for large corporations and rich households. She has been bolstered by economists, who’ve warned that Trump’s plans would push up inflation.

The position of the Federal Reserve can be a difficulty within the marketing campaign. Some Democrats are crucial of the Fed for ready too lengthy to chop rates of interest, whereas Trump in his press convention final night time mentioned it had “gotten it mistaken so much” and that US presidents ought to have a greater say in financial coverage.

With attribute modesty, Trump mentioned he had “a greater intuition than, in lots of circumstances, individuals that might be on the Federal Reserve or the chairman”.

Be part of Robert Armstrong of Unhedged and different FT consultants to debate this week’s buying and selling turmoil in a subscriber-only webinar subsequent Wednesday, August 14 at (12:00 BST/07:00 EST). Register right here on your subscriber move at ft.com/marketswebinar and put your inquiries to our panel now.

Have to know: UK and Europe financial system

As these concerned within the latest UK riots start going to jail, tutorial evaluation highlights how public opinion on immigration is at odds with actuality: it grows the financial system and has little or no effect on jobs and wages. Separate FT evaluation reveals how the disturbances centred on deprivation hotspots.

The EU and Serbia have agreed a partnership in critical raw materials to assist the manufacture of batteries and EVs. Serbia has one of many largest lithium deposits in Europe, sufficient for an estimated 1mn EV batteries a yr.

Have to know: World financial system

China’s client costs rose faster than expected in July, easing issues over persistent deflation on the planet’s second-largest financial system. The nation’s leaders are grappling with one among its most vexing financial issues — how you can get households to spend extra.

Venezuela’s President Nicolás Maduro, enraged by challenges to his election victory final month, has instigated a wave of repression in opposition to opponents, together with encouraging residents to denounce their neighbours.

Right here’s our profile of Muhammad Yunus, the micro-lending pioneer and Nobel laureate who has the “job from hell”: the duty of restoring peace in Bangladesh.

Have to know: Enterprise

Barclays turned the primary British financial institution to inform workers it would scrap the EU bonus cap, following the UK’s post-Brexit choice to take away the bounds final yr. JPMorgan and Goldman Sachs have already instructed regulators they intend to raise bonuses.

The FT revealed that Google and Meta made a secret deal to focus on advertisements for Instagram to youngsters on YouTube, skirting the search firm’s personal guidelines for a way minors are handled on-line.

A brand new Huge Learn tells the inside story of how Microsoft rethought its AI technique after OpenAI, the start-up it has poured billions into, made a failed effort to oust its chief Sam Altman final yr.

British Airways turned the newest worldwide airline to reduce flights to China amid indicators of weakening demand and the excessive value of the diversions wanted to keep away from flying over Russian airspace. London Heathrow to Beijing flights might be “paused” from October 26 for a minimum of a yr.

Is the music streaming period over? Music corporations look like pinning their hopes on superfans shopping for vinyl albums after a marked slowdown in income progress.

Science spherical up

Nasa is contemplating asking SpaceX to retrieve two astronauts caught on the Worldwide Area Station after issues with the Boeing CST-100 Starliner spacecraft they took to get there.

The primary mind implant fabricated from graphene, hailed as a “surprise materials” after its discovery on the College of Manchester 20 years in the past, is ready to start a clinical trial within the metropolis. Researchers hope it would result in interfaces between the human mind and exterior computer systems which can be extra delicate than right this moment’s units.

Pharma corporations want to safe radioactive supplies for radiopharmaceutical oncology drugs. Radiopharmaceuticals or radioligands work by combining a radioactive isotope with an antibody cocktail, delivering a extra poisonous dose on to most cancers cells and shrinking tumours extra successfully.

Most cancers charges are rising among the many younger, prompting a seek for environmental causes together with elements similar to microplastics, writes commentator Anjana Ahuja.

New instruments have lastly arrived that would prevent digital attacks from next-generation quantum computer systems. Issues have been rising that quantum machines will in the future be capable of crack codes defending delicate information which have for many years proved unbreakable.

Some excellent news

Native canine within the British city of Lewes are being requested to “act like wolves” to assist reseed native wildflowers in an area nature reserve. Earlier than wolves turned extinct within the nation, they’d roam giant areas, carrying wild flower and grass seeds of their fur, depositing them throughout the land. The brand new initiative includes leaky “doggy baggage” strapped to their modern-day counterparts’ backs as they traverse the reserve, sowing as they go.