Classes from the market meltdown

As we speak’s prime tales

• Ukrainian drones hit a navy 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 to this point.

• Beijing hit again towards proposed EU tariffs on Chinese language electrical car exporters through a grievance with the World Commerce Group, escalating the commerce dispute with Brussels.

• Hargreaves Lansdown, the UK funding platform that pioneered promoting shares and funds on to retail traders, has agreed to a £5.4bn takeover by a gaggle 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 knowledge has supplied classes a lots for world traders and introduced a brand new give attention to the state of the US economic system forward of November’s presidential election.

International 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 traders’ issues however the market stays delicate and might be nonetheless weak to any antagonistic information.

Postmortems are all over the place. Classes from a manic Monday embody to not belief funds that are supposed to supply safety from volatility and for skilled merchants to not all take summer time holidays on the identical time. Pores and skin within the Recreation columnist Stuart Kirk has extra on what bizarre traders can take away from this week’s occasions, whereas actual markets nerds ought to take a look at this take from FT Alphaville.

The prognosis for the US economic 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 must be cautious of touting her celebration’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 customers reducing spending, whereas on jobs, there may be ample proof that positive aspects for low-paid employees haven’t been shared equally, as columnist Soumaya Keynes notes on this evaluation of kitchen employees’s wages at McDonald’s.

And as Washington bureau chief James Politi notes right this moment, voter discontent about the price of residing 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 “middle 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 problem 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 evening stated it had “gotten it wrong a lot” and that US presidents ought to have a larger say in financial coverage.

With attribute modesty, Trump stated he had “a better instinct than, in many cases, people that would be on the Federal Reserve or the chairman”.

Be a part of Robert Armstrong of Unhedged and different FT specialists 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 economic system

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

The EU and Serbia have agreed a partnership in crucial uncooked supplies 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: International economic system

China’s shopper costs rose quicker than anticipated in July, easing issues over persistent deflation on this planet’s second-largest economic system. The nation’s leaders are grappling with considered one of its most vexing financial issues — the best way to 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 towards 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: Business

Barclays grew to become the primary British financial institution to inform employees it’s going to scrap the EU bonus cap, following the UK’s post-Brexit determination to take away the boundaries final yr. JPMorgan and Goldman Sachs have already instructed regulators they intend to elevate bonuses.

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

A brand new Massive 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 grew to become the newest worldwide airline to cut back 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 will probably 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 House Station after issues with the Boeing CST-100 Starliner spacecraft they took to get there.

The primary mind implant product of graphene, hailed as a “wonder material” after its discovery on the College of Manchester 20 years in the past, is about to start a medical trial within the metropolis. Researchers hope it’s going to result in interfaces between the human mind and exterior computer systems which can be extra delicate than right this moment’s gadgets.

Pharma corporations wish to safe radioactive supplies for radiopharmaceutical oncology medicine. 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 components reminiscent of microplastics, writes commentator Anjana Ahuja.

New instruments have lastly arrived that would stop digital assaults from next-generation quantum computer systems. Issues have been rising that quantum machines will at some point be capable of crack codes defending delicate knowledge 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 grew to become 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 bags” strapped to their modern-day counterparts’ backs as they traverse the reserve, sowing as they go.