Morning Market Commentary 31-Jul-2014

 

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Morning News

Headlines

▪ Merkel And Putin Discussed Secret Deal Could End Ukraine Crisis

▪ EU Names 8 Russians, Three Firms Subject To Asset Freeze

▪ Argentina Declared In Default By S&P As Talks Fail

▪ BoE’s Broadbent: ‘Edge Is Coming Off’ UK Housing

▪ UK House Prices Slow To 15-Month Low In July

▪ UK Consumer Confidence Falls For 1st Time In 6 Months – GFK

▪ French Producer Prices Rise Unexpectedly In June

▪ French Consumer Spending (YoY) Jun: 1.80% (est 0.40%; rev prev -0.70%)

▪ German Retail Sales: Stores Boost Turnover In June

▪ German June Labour Market Nearly Unchanged On May

▪ Moody’s: Outlook Changed To Negative For Swiss Banking System

▪ SNB H1 Profit Rises On Gold, Foreign Currency

▪ IMF: China Should Set Less Ambitious 2015 Growth Target

▪ Shell Quarterly Adjusted Earnings Rise 33%

▪ Siemens Outruns Q2 Bets As Restructuring Finally Bears Fruit

▪ Lloyds Bank Shrugs Off Libor Fines With Profit Increase

▪ Banco Santander Profit Rises On UK, Spain Recovery

▪ BG Group Operating Profit Up 11% On Higher LNG Volumes

▪ Samsung Electronics Downbeat On Q3 Prospects As Profits Slide

▪ HTC Forecasts Q3 Revenue Missing Analysts’Estimates

▪ AstraZeneca Smashes Forecasts In Q2 After Seeing Off Pfizer

▪ Centrica First-Half Profits Fall 35%

▪ BAE First Half Profit Falls 7%

▪ Sanofi Lifts 2014 Guidance After Q2 Earnings Beat Expectations

▪ Carrefour Profit Tops Estimates As European Sales Strengthen

▪ Euronext: BES Shares Have Been Suspended Until 10:00 BST

▪ BES Seeks Capital As Key Staff Suspended After Massive Losses

▪ Balfour Beatty Ends Merger Talks With Carillion

▪ Lufthansa Profit Below Expectations As Ticket Prices Fall

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Leaders and Laggers

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Commentary

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Land For Gas: Merkel And Putin Discussed Secret Deal Could End Ukraine Crisis
Germany and Russia have been working on a secret plan to broker a peaceful solution to end international tensions over the Ukraine.

The Independent can reveal that the peace plan, being worked on by both Angela Merkel and Vladimir Putin, hinges on two main ambitions: stabilising the borders of Ukraine and providing the financially troubled country with a strong economic boost, particularly a new energy agreement ensuring security of gas supplies.

More controversially, if Ms Merkel’s deal were to be acceptable to the Russians, the international community would need to recognise Crimea’s independence and its annexation by Russia, a move that some members of the United Nations might find difficult to stomach. (Independent – Continue Reading)

Argentina Braces For Market Reaction To Second Default In 12 Years
Argentina defaulted for the second time in 12 years after hopes for a midnight deal with holdout creditors were dashed, setting up stock and bond prices for declines on Thursday and raising chances a recession could worsen this year.

After a long legal battle with hedge funds that rejected Argentina’s debt restructuring following its 2002 default, Latin America’s third-biggest economy failed to strike a deal in time to meet a midnight deadline for a coupon payment on exchange bonds.

Even a short default will raise companies’ borrowing costs, pile more pressure on the peso, drain dwindling foreign reserves and fuel one of the world’s highest inflation rates. (Reuters – Continue Reading)

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Growth Rebound Stokes Fed Debate
Federal Reserve officials delivered a modestly more upbeat assessment of the economy Wednesday amid a second-quarter growth rebound and deepening debate inside the central bank about when to start raising interest rates.

U.S. gross domestic product, a broad measure of the nation’s output of goods and services, advanced at a seasonally adjusted annual rate of 4.0% in the second quarter, the Commerce Department said Wednesday, a significant rebound from a wintry 2.1% contraction during the first three months of the year.

Overall, the economy appears to be neither as weak as was recorded in the first quarter nor as strong as the latest numbers suggest in the second. Compared with a year ago, economic output was up 2.4% last quarter, in line with the modest pace of growth that has characterized much of this recovery. The economy only grew at about a 1% pace for the first half of 2014. (WSJ – Continue Reading)

Gross Says Time To Say ‘Good Evening’ To Asset Gains
Pacific Investment Management Co.’s Bill Gross said investors should say “good evening” to the prospect of future capital gains in asset markets as interest rates are set to rise while the economy grows at a slow pace.

“The global economy is left to depend on economic growth for further advances and it is growth that is now and has recently been historically deficient,” the manager of the world’s biggest bond fund wrote in a commentary on Newport Beach, California-based Pimco’s website. “As yields have bottomed and are now expected by the markets to gradually rise, it’s down to growth, and growth is a question mark.”

Investors should “own bonds and an average proportion of stocks too,” Gross wrote, adding that high quality Treasury and corporate bonds are fairly priced, although they are not cheap. (Bloomberg – Continue Reading)

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Global QE Ends As China Opens Second Front In Bond Tapering
The spigot of global reserve stimulus is slowing to a trickle. The world’s central banks have cut their purchases of foreign bonds by two-thirds since late last year. China has cut by three-quarters.

These purchases have been a powerful form of global quantitative easing over the past 15 years, driven by the commodity bloc and the rising powers of Asia.

They have fed demand for US Treasuries, Bunds and Gilts, as well as French, Dutch, Japanese, Canadian and Australian bonds and parastatal debt, displacing the better part of $12 trillion into everything else in a universal search for yield. Any reversal would threaten to squeeze money back out again. (Telegraph – Continue Reading)

Gold ETPs Halt Outflows As Buyers Return Amid Price Slump
Gold investors who pulled money out of U.S. exchange-traded products through the first half of 2014 rushed back in July, just as prices resumed a decline that Barclays Plc and Goldman Sachs Group Inc. say will get worse.

ETPs backed by precious metals took in $536.81 million this month as of July 29, a 1 percent gain for funds that saw a net outflow of $319 million in six months through June, data compiled by Bloomberg show. This month’s 2 percent drop in futures left prices down 7 percent from a 2014 peak in March.

The appeal of gold as a haven increased since Russia backed a rebellion in Ukraine and as violence escalated in the Middle East and North Africa. While the metal has outperformed equities and bonds so far this year — gains that Citigroup Inc. says will hold — analysts in a Bloomberg survey predict prices will drop in the fourth quarter as economic growth spurs a shift to U.S. equities already at all-time highs. (Businessweek – Continue Reading)

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Files and Links

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HEADLINES

EU Names 8 Russians, Three Firms Subject To Asset Freeze

Argentina Declared In Default By S&P As Talks Fail

BoE’s Broadbent: ‘Edge Is Coming Off’ UK Housing

Italy Spending Review Chief Cottarelli Plans To Quit: CorrieredellaSera

UK Nationwide House PX (MoM) Jul: 0.10% (est 0.50%; prev 1.00%)

UK GFK Consumer Confidence (Jul): -2 (est 2; prev 1)

French PPI (YoY) Jun: 0.50% (est -0.10%; rev prev 0.10%)

French Consumer Spending (YoY) Jun: 1.80% (est 0.40%; rev prev -0.70%)

German Retail Sales (YoY) Jun: 0.40% (Est 1.30%; Prev 1.90%)

German June Labour Market Nearly Unchanged On May

Moody’s: Outlook Changed To Negative For Swiss Banking System

SNB H1 Profit Rises On Gold, Foreign Currency

IMF: China Should Set Less Ambitious 2015 Growth Target, Refrain From Stimulus

Shell Quarterly Adjusted Earnings Rise 33%

Siemens Outruns Q2 Bets As Restructuring Finally Bears Fruit

Lloyds Bank Shrugs Off Libor Fines With Profit Increase

Banco Santander Profit Rises On UK, Spain Recovery

BG Group Operating Profit Up 11% On Higher LNG Volumes

Samsung Electronics Downbeat On Q3 Prospects As Profits Slide

HTC Forecasts Q3 Revenue Missing Analysts’ Estimates

AstraZeneca Smashes Forecasts In Q2 After Seeing Off Pfizer

Centrica First-Half Profits Fall 35%

BAE First Half Profit Falls 7%

Sanofi Lifts 2014 Guidance After Q2 Earnings Beat Expectations

Carrefour Profit Tops Estimates As European Sales Strengthen

BES Seeks Capital As Key Staff Suspended After Massive Losses

Balfour Beatty Ends Merger Talks With Carillion

Lufthansa Profit Below Expectations As Ticket Prices Fall

Boeing To Make Longest 787-10 Dreamliner Exclusively In South Carolina

MARKET DATA

 

Annunci

Quartz Daily Brief—Japan’s GDP growth, FIFA allegations, Russia’s RMB embrace, Twitter poems

Quartz - qz.com

Good morning, Quartz readers! 

Quartz India is here. Your digital, economic guide to India has launched—with founding partner, GE. Check out the new experience now.

What to watch for today

European leaders discuss the European Commission’s top job. David Cameron and Angela Merkel meet with leaders from Sweden and the Netherlands to discuss who should be the next president of the group. Cameron is urging the others not to appoint Jean-Claude Juncker, Luxembourg’s former prime minister.

The S&P 500 could hit a milestone. A 2.5% gain in the steadily ascending index would put it at 2000 for the first time ever, a very real possibility because there is no major economic news expected to rock the boat.

Gaming companies square off. Microsoft and Sony are among the major players to kick off this year’s E3 conference in Los Angeles. Microsoft’s task is to appeal to hardcore gamers (paywall) while touting its Xbox One as a multimedia living room device, and Sony needs to hold on to its sales lead.

FIFA finishes up its Qatar probe. Following months of investigation, Michael Garcia, a New York-based lawyer, will conclude the process, although his findings are not likely to be published for another six weeks. If he finds wrongdoing in Qatar’s bid, FIFA could vote again for the 2022 hosts.

Holidays in Europe. France and Germany are on holiday, so expect a quieter day of business in Europe—happy holidays if you are resting!

Over the weekend

Japan’s economy grew more than expected. Japan’s GDP growth for the first quarter was revised up to 1.6% from a previous estimate of 1.5%. The news is even more positive than it looks—analysts expected a downward revision for one, and the boost is not only from individuals spending ahead of the April 1 tax rise, but also from capital expenditure.

Domestic demand sagged in China. The country’s trade surplus almost doubled to $35.9 billion after its exports jumped to 7% in May, compared to April’s 0.9% increase, and imports unexpectedly fell by 1.6%, missing expectations of a 6.1% rise and fueling concerns about weakening domestic demand.

Russian companies moved to the renminbi. Fears that Western sanctions will freeze them out of the dollar market have led Russian companies to start writing contracts in China’s currency (paywall). Other Asian currencies have also been considered, and requests for bank accounts in Asia have surged, the head of Deutsche Bank in Russia told the Financial Times.

Bulgaria put its pipeline on ice. Following pressure from the EU and the US, Bulgaria said it would stop building its South Stream gas pipeline, a project funded by Russia’s Gazprom. The pipe would deliver gas to western Europe through the Balkans, avoiding Ukraine.

Egypt inaugurated its new president… Abdel Fattah al-Sisi, the former army chief who ousted Mohamed Morsi last year, was sworn in as president. He said defeating terrorism would be his top priority, and there would be “no acquiescence or laxity shown to those who resorted to violence.”

…And so did Ukraine. “Chocolate king” Petro Poroshenko was sworn in (paywall) as the country’s fifth president after his landslide victory last month. He made clear that Ukraine will not accept Russia’s annexation of Crimea, but agreed to start peace talks with Russia’s Vladimir Putin.

British business confidence reached a multi-year high. More manufacturers in the UK are confident about their growth prospects over the next quarter than at any time since the beginning of the financial crisis. All sectors of industry had a positive outlook, and domestic demand was a significant factor.

Quartz obsession interlude

Annalisa Merelli on how Italian soccer stickers turned kids into capitalists. ““Ce l’ho, ce l’ho, mi manca”—“Got it, got it, need it”—is the refrain that has introduced Italian kids to the joys of supply and demand for decades. It is the equivalent to the stock market’s “buy, sell,” but it accompanies the exchange of a very different, though similarly precious commodity: Panini stickers, which contain portraits of the soccer players taking part in the World Cup.” Read more here.

Matters of debate

Obama is an enemy of the free press. His administration has hounded and snooped on more journalists than any president since Nixon.

The UK in its present form is unacceptable. Whatever the result of the referendum on Scottish independence, much has to change.

Uber’s $18.2 billion valuation is crazy. Its investors are forgetting the company’s drivers have no loyalty to Uber (paywall), and competition is growing.

GM’s culture of “cost control” was the company’s tragic flaw. Engineers were told to deliver on time or take responsibility for the domino effect of delays.

The best hedge funds operate on secrecy. The “more important you are, the less you need to be liked, and the less you need to be seen”, one manager explains.

Surprising discoveries

This dating app could be safer for women. Women can join Wyldefire freely, but men have to be invited by a female friend.

You will be able to charge your iPhone 6 wirelessly. And other rumors.

A computer passed the Turing Test. Pretending to be a 13-year-old Ukrainian boy, the program convinced the judges that it was a human.

Nike sponsors most of the World Cup’s most marketable stars. That’s even though the tournament’s official sponsor is Adidas.

There’s poetry in Twitter. Bots are on the lookout for haikus, anagrams, and now pangrams (sentences that contain every letter of the alphabet).

Investors are gaining confidence. Hostile takeovers are at a 14-year high (paywall), while Wall Street’s “fear gauge” is at a seven-year low (paywall).

Our best wishes for a productive day. Please send any news, comments, Twitter poems, and intelligent computers to hi@qz.com. You can follow us on Twitter here for updates throughout the day.

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Quartz Daily Brief—MH370 search shifts, Japan’s inflation, Afghan telecoms, dirty t-shirt dating

Quartz - qz.com

Good morning, Quartz readers!

What to watch for today

Xi Jinping arrives in Germany. The Chinese president will talk trade with chancellor Angela Merkel. Despite earlier speculation, he won’t be visiting Berlin’s Holocaust Memorial Museum in an attempt to criticize Japan for its lack of post-war remorse.

BMW expands in South Carolina. The German carmaker is expected to unveil production of a new luxury X7 sports car, which could bring an additional $1 billion in investment to its US manufacturing facility.

BlackBerry runs low on juice. The troubled Canadian phone company will have to account for the poor take-up of its BB10 handset, after dismal sales led to a $1.6 billion writedown in the previous quarter. This quarter, BlackBerry is set to post a sharp decline in profit, revenue, shipments, customers…need we go on?

Oscar Pistorius takes the stand. The one-legged Olympian is expected to be the first witness called when the defense begins presenting its case in his murder trial. The South African athlete is charged with deliberately shooting his girlfriend, Reeva Steenkamp, through a bathroom door.

While you were sleeping 

The search for MH370 shifted locations. After a week of searching the Indian Ocean 2,500km southwest of Perth, newly obtained radar data suggested the plane may have been traveling faster than previously estimated, putting the new search area 1,100 km (685 miles) to the northeast. Separately, authorities said they found nothing of interest on the lead pilot’s homemade flight simulator.

Japanese inflation was unchanged. Consumer prices rose 1.3% in February, just as in January and December, as bad weather was counterbalanced by shoppers trying to beat a looming sales tax increase.

ANA went Dreamliner shopping. The Japanese airline splurged on 80 of the embattled 787 Dreamliner jets, giving Boeing a much-needed $16.6 billion vote of confidence in its battle against Airbus.

The British economy got some good news. UK consumers are more confident than at any time since the beginning of the financial crisis, according to polling firm GfK, suggesting stronger consumer spending in the months to come.

The Fed won’t hike rates this year. The US central bank will need to keep interest rates “near zero well into 2015,” Chicago Federal Reserve Bank president Charles Evans said in Hong Kong, citing low inflation and lingering high unemployment.

Quartz obsession interlude

Leo Mirani on how a homegrown Afghan telco prepared to expand into Africa. “In 2001, the year the war began in Afghanistan, some 80,000 of Afghanistan’s 21 million people had access to a telephone (pdf), and 25,000 of those used satellite phones, Roshan estimates. In 2002, when the first mobile company started operations, a SIM card cost $250, according to a USAID report on Afghan telecoms (pdf). Today, with its population around 30 million, Afghanistan has more than 20 million active SIMs, which can be picked up for under $1 and put in a $10 handset.” Read more here.

Matters of debate

Nate Silver can’t explain everything. You can’t use data without questioning your own underlying assumptions.

We should all be eating invasive species. If you want to help the ecosystem, consume your enemies.

Shenzhen is the new Silicon Valley. Three of the the world’s five largest mobile phone makers are from China.

Microsoft just entered its post-PC phase. Releasing Office for iPad shows the mobile audience that it means business.

Surprising discoveries

London daters are sniffing dirty T-shirts. It’s an attempt to match up singles by their pheromone preference.

Marinating meat with beer is good for you. It reduces the formation of carcinogenic material.

Mexican drug gangs have branched out into citrus fruit. Extortion rackets have caused lime prices to more than triple since December. 

In the future, water bottles will be edible. The water is contained in a double membrane a bit like an egg yolk.

The black market values stolen Twitter accounts more than credit cards. Watch out, @Target.

Our best wishes for a productive day. Please send any news, comments, spare limes, and stolen Twitter handles to hi@qz.com. You can follow us on Twitter here for updates throughout the day.

You’re getting the Europe and Africa edition of the Quartz Daily Brief. To change your region, click here. We’d also love it if you shared this email with your friends. They can sign up for free here.

Quartz Daily Brief—Merkel’s third term, NSA surveillance ruling, Boeing’s buyback, Neanderthal burials

Quartz - qz.com

Good morning, Quartz readers!

What to watch for today

Angela Merkel’s third term begins. Three months of haggling have yielded a coalition government focused on strengthening the EU and bringing energy prices under control. Merkel’s new cabinet includes Germany’s first female defense minister.

Muted inflation in Britain and US. Consumer prices are expected to have risen about 2.2% in the UK and to have barely increased in the US, shedding light on the US Federal Reserve’s two-day policy meeting, which starts today.

The UK opens up to shale gas, publishing a list of areas across the country where companies could explore for shale gas drilling, as well as new regulations and an assessment of the likely impact on water supplies.

A close call for the US budget deal. The Senate votes on a deal that would put an end, for a while anyway, to the paralyzing brinkmanship. Some Democratic senators complain that the deal doesn’t extend  long-term unemployment benefits.

Zimbabwean diamonds for sale. The first auction following the lifting of EU sanctions on the Marange diamond fields, where government troops allegedly killed over 200 workers in 2009, takes place in Antwerp.

Ukraine’s president meets Putin. After spurning the EU, Viktor Yanukovych travels to Moscow to ask for a $15 billion bailout as protestors continue to crowd the streets in Kiev.

While you were sleeping

A blow to NSA phone surveillance. The collection of telephone record metadata that Edward Snowden revealed earlier this year may be unconstitutional, a US district court judge ruled.

Japan is upping its military spending by 2.6% over five years for equipment such as beach assault vehicles and early-warning planes, against a backdrop of ongoing tensions with China.

North Korea marked Kim Jong-il’s death. Thousands of officials gathered in Pyongyang for a ceremony commemorating the second anniversary of the the former leader’s passing. Those on hand included his chosen successor, Kim Jong-un, who recently executed his own uncle in a purge of top leaders.

Singapore’s exports fell. Shipments excluding oil declined by a more than expected 9.3% in November (paywall) compared to the previous month due in part to a 47% drop in pharmaceutical exports.

Boeing’s $10 billion buyback. The company will raise its dividend 50% in its largest-ever share buyback, thanks to strong sales and improved cash flow.

Glaxo will stop paying doctors for promotions. In what could be a first for a major drug company, GlaxoSmithKline will cease its practice of compensating doctors for promoting its products, chief executive Andrew Witty said.

The SEC wants more than $1.1 million from Fabrice Tourre for the former Goldman Sachs employee’s involvement in a failed 2007 mortgage deal.

Quartz obsession interlude

Christopher Mims on how far the “internet of things” will go. “The next layer of the internet of things will require combining disparate streams of data ‘mined’ from reality—everything from your location to the members of your social network. This is called sensor fusion, a task that is basic to all big data projects. Knowing where you are throughout the day won’t mean much, but add in data about who else is present and a computer algorithm can tell you how likely you are to get the flu.” Read more here.

Matters of debate

Google is the new Bell Labs. With its investment in autonomous cars and acquisition of Boston Robotics, the company is investing in groundbreaking research that will benefit humanity. (Counterpoint: No, it isn’t.)

A 7.5% GDP growth target is bad for China. It will only make it harder for the country to reform.

Germany should expect a downgrade. The fact that the Netherlands lost its AAA rating is a warning that the German position isn’t so secure.

It’s time to ease up on the college essay. Requiring students to write long papers is a waste of everyone’s time.

Why have no high-level executives been prosecuted for the financial crisis? A US judge flags an “egregious failure of the criminal justice system.”

Surprising discoveries

Water may flow freely on Mars. Seasonal dark streaks have been detected near the red planet’s equator.

Neanderthals buried their dead. New research shows that contrary to earlier assumptions, our evolutionary relatives undertook careful burials some 50,000 years ago.

The best-selling book on Amazon this year is based on a questionnaire developed by Gallup.

There’s a strange new way to get a US visa—be really good at a video game.

Ben and Jerry have only ever really argued about one thing: how big the chocolate chunks should be in their ice cream.

Our best wishes for a productive day. Please send any news, comments, long-forgotten college essays, and chocolate chunk preferences to hi@qz.com. You can follow us on Twitter here for updates throughout the day.

 

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Quartz Daily Brief—Apple-Samsung suit, ICBC too big to fail, EU unemployment talks, atheist mega-churches

Quartz - qz.com

Good morning, Quartz readers!

What to watch for today

Apple and Samsung go head-to-head. The tech giants face off in US federal court—again—in a new trial to determine the damages Apple is owed after winning a patent infringement case against Samsung last summer. Samsung could also be in trouble for leaking confidential documents Apple disclosed in court.

Russia speeds up. Russia’s economic growth is expected to have accelerated for the first time in seven quarters, ending a year and a half of the worst slowdown the country has seen since its 2009 recession. That would lend credibility to a central bank policy of keeping inflation down rather than stimulating output.

Indian oil goes on sale. The Indian government begins its roadshow in the US and London to sell its 10% stake in Indian Oil Corp, the nation’s largest oil firm, which could fetch some 39 billion rupees ($616 million), part of a 400-billion-rupee divestment program. The shares would likely hit the market in early December.

EU leaders tackle youth unemployment. Germany’s Angela Merkel and France’s François Hollande will discuss how to deal with Europe’s soaring youth unemployment, which is as high as 50% in some countries.

While you were sleeping

A new entry on the “too big to fail” list. China’s Industrial & Commercial Bank of China was added to the list of banks that must hold extra capital because their failure would endanger the global financial system.

Australian business confidence fell. National Australia Bank’s survey for October showed confidence declined to normal levels after two month of increases, due to subdued sales.

The World Bank warned about services for the poor. The lender said in a new report that expanded access microcredit, micro-insurance, and low-fee accounts can lead to overextension and other risks.

A Mazda SUV with automatic braking crashed during a test drive at a dealership in Japan. The Mazda CX-5, which launched last year, uses a laser to detect obstacles and slow the vehicle when necessary. Two people were injured when the car crashed through a barrier while testing the system.

SEC staff are being investigated. The Securities and Exchange Commission’s inspector general’s office and US prosecutors have looked into some New York SEC staff’s financial holdings. Investigators are focusing on employees’ compliance with the agency’s internal trading rules (paywall), the Wall Street Journal reports.

The Philippines declared a state of calamity. More than 9 million people have been affected by Typhoon Haiyan’s rampage through the Philippines, with up to 10,000 believed dead and many more waiting for aid, which is arriving slowly due to damaged roads and airports.

News Corp’s revenues missed expectations in the publishing company’s first earnings report since it separated from the more lucrative entertainment businesses, now called 21st Century Fox, in July.

Quartz obsession interlude

Roberto A. Ferdman on what Typhoon Haiyan will do to Philippine agriculture. “The Philippines is the world’s largest per capita consumer of rice, but it’s been making strides towards self-sufficiency. Rice imports have declined in each of the past five years since hitting a record 2.6 million tonnes in 2008. Estimates for 2013/2014 were hovering around 1.5 million tonnes before the typhoon, but are likely to rise in its aftermath, pushing global prices up.” Read more here.

Matters of debate

The world shouldn’t save Congo. The defeat of the M23 rebel group by the UN and other foreign forces is just a temporary reprieve for the government, and does not address the causes of violent rebellion.

France gets a bad rap. It’s doing okay economically, but basing its fiscal policy on tax increases rather than spending cuts just isn’t fashionable.

Don’t blame people for buying soda with food stamps. The debate over junk food obscures the increasing difficulties that food stamp recipients face.

Sleep isn’t just for the weak. Western culture dismisses it as a waste of time, but lack of sleep undercuts productivity and contributes to expensive health problems.

Surprising discoveries

A goal celebration no-no. Egyptian soccer club Al Ahly has excluded striker Ahmed Abdul Zaher from upcoming games for scoring and then giving a salute supporting ousted President Mohammed Morsi.

A church of non-believers. Atheist mega-churches are springing up around the US, creating communities for people who don’t believe in God.

Google’s creepiest patent yet. It’s an electronic neck tattoo meant to eliminate background noise on phone calls. But it also turns orange when you sweat, revealing when you’re lying.

Hong Kong banker babies. A Hong Kong pre-school is tracking the financial markets on a whiteboard in its playroom.

Our best wishes for a productive day. Please send any news, comments, neck tattoos and study tips for kiddie bankers to hi@qz.com. You can follow us on Twitter here for updates during the day.

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Quartz Daily Brief—Merkel celebrates, China thrives, Nairobi siege, audacious oil thieves

Quartz - qz.com

Good morning, Quartz readers!

What to watch for today

Angela Merkel celebrates her third term as German chancellor. Exit polls showed that Merkel’s Christian Democratic Union won 42% of the vote in Sunday’s election. Her coalition partner, the Free Democratic Party, did not win enough to gain representation in parliament, but Merkel could still form a “grand coalition” with her closest rival, the left-leaning Social Democratic Party.

Kenyan shopping mall siege continues. Most hostages have been rescued, but Kenyan security forces are still battling the al-Qaeda-linked Somali militant group al-Shabaab, whose fighters stormed an upscale Nairobi mall on Saturday. At least 68 people have been killed and 175 injured; 10 to 15 guerrillas are still holding an unspecified number of people.

Diplomatic wrangling at the UN. The General Assembly in New York City will be dominated by developments in the Middle East: A diplomatic solution to the Syrian crisis, thawing of US-Iran relations, and the US-brokered peace talks between Israel and Palestine.

Microsoft plays catch up.  The company will unveil its next generation Surface tablets aimed at challenging Apple’s dominance in the tablet market. The response to Microsoft’s tablets has so far been underwhelming, forcing the company to take a $900 million inventory loss in its most recent earnings report.

Please switch off some electronic portable devices. The US aviation regulator is expected relax restrictions on portable gadgets during takeoff and landing after an advisory panel meets this week, but email, phone calls and Wi-Fi will still be forbidden.

Over the weekend

Recovery signposts. China’s flash manufacturing index rose to a six-month high, indicating the country’s rebound is strengthening due to increased domestic and foreign demand. The flash Purchasing Managers Indexes for the euro zone and the US, due later today, are expected to show an uptick as well.

Typhoon Usagi lashed southern China. After causing flooding and throwing Hong Kong flight schedules into disarray, the year’s most powerful typhoon slammed into southern China, killing 21. The fatalities occurred in Guangdong province, after the storm veered away from nearby Hong Kong.

China makes a point with Bo Xilai’s sentence. The former Communist Party Politburo member was sentenced to life in prison for bribery, embezzlement and abuse of power, ending China’s most politically charged trial in decades. Bo has pledged to clear his name and return—somehow—to politics.

Was the Fed’s no-taper decision leaked? Nanex LLC, a Chicago-based research firm that monitors trading activity, says large orders for gold ETFs and gold futures—placed at the exact millisecond the news was officially made public—represented “overwhelming” evidence of a leak.

Greece sits down with creditors… again. Representatives from the troika are reviewing austerity measures to decide if Athens should get its next installment of cash. Unions have planned strikes on Tuesday and Wednesday, as public sector workers in Greece face further cuts.

LinkedIn sued for hacking email address books. Four customers accused the professional networking site of accessing their e-mail accounts without permission,downloading contacts’ addresses, and spamming those people with invitations to join the service.

Mexico could adjust its 2014 budget after massive rains hit the country. President Enrique Pena Nieto said Mexico’s national disaster fund wouldn’t cover the damage after twin storms triggered flooding and landslides that have killed 110.

Venezuela arrested soldiers in a blockbuster cocaine bust. Authorities have detained three national guard officials after some 1.3 tons of the drug—worth about $270 million—was found crammed into 30 suitcases on an Air France flight from Caracas to Paris.

Quartz obsession interlude

Steve Levine on why even the Chinese government can’t command progress on electric cars. “On Sept. 17, Beijing renewed subsidies for electric cars, plug-in hybrids and fuel cell vehicles. They are substantial—a buyer of an electric car receives a direct payment of $9,800. (The payment is $5,700 for a plug-in hybrid and up to a whopping $81,000 on the purchase of a hydrogen fuel-cell vehicle.) But analysts doubt the renewed subsidies will finally trigger a buying binge; the cars will still cost more than pure gasoline-fueled vehicles, and will cover less ground and lack the convenience of quick refueling. In short: Despite the new subsidies, China still faces an uphill battle to get motorists to embrace electrics.”Read more here.

Matters of debate 

A world of higher interest rates looms. Emerging economies should heed the Indian central bank’s warning and hike rates to deter investment in unsustainable activities.

What the Middle East should learn from the birthplace of the Arab Spring. Tunisia has its problems, but its rational, systematic approach to its transition should serve as a model for others in the region.

The actual US poverty rate is about zero. Certain benefits and aid through the tax system are not counted in the current definition of poverty.

The Bitcoin crackdown is the right move. Regulations will help integrate Bitcoin into the financial system and make virtual currencies more dependable.

Surprising discoveries

One surrogate per family? Wealthy Chinese are signing up American surrogates to avoid one-child restrictions and eventually obtain US green cards.

How to steal 100,000 barrels of oil a day. Thieves in Nigeria are puncturing pipelines, using taps to ply oil from hoses, and even stealing from export terminals.

Microwaves can double up as power sources. Energy that escapes through the microwave doors can power gadgets like cooking timers and digital scales.

Being a judge is no laughing matter. A judge in New Jersey resigned after being told that he can’t moonlight as a stand-up comic.

Our best wishes for a productive day. Please send any news, comments, judicial stand-up routines, and oil heist movie plots to hi@qz.com. You can follow us on Twitter here for updates during the day.

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Quartz Daily Brief—Egypt’s new leader, Libor trial, indignant Bolivians, HIV cure hope

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Good morning, Quartz readers!

What to watch for today

Egypt’s new leader is sworn in. Adly Mansour, the head of Egypt’s constitutional court, will be sworn in as interim president in the aftermath of a military takeover that ousted president Mohamed Morsi. Here’s what we know about Mansour.

Status quo on interest rates. The European Central Bank is expected to hold its policy rate unchanged at a record low of 0.5%. The Bank of England’s monetary policy committee will also announce its interest rate decision.

First criminal case on Libor opens. Tom Hayes, the former UBS and Citigroup derivatives trader accused of manipulating the benchmark interest rate, will appear in a London court. Hayes is charged with eight counts of conspiracy to defraud.

US celebrates independence day. And Chinese fireworks manufacturers will celebrate too.

While you were sleeping

Tough questions for Obama. In the wake of European outrage earlier this week at news that the US spied on EU diplomatic offices, Barack Obama agreed to hold talks with Germany’s chancellor, Angela Merkel.

The last chapter of the Dish-Sprint-SoftBank-Clearwire saga. US regulators are said to have approved SoftBank’s acquisition of Sprint-Nextel and Sprint’s buyout of the part of Clearwire it does not already own. It’s bad news for Dish Network, which tried everything from counter-offers to security scare-mongering in the attempt buy Sprint and Clearwire for itself.

Ecuador said its London embassy was bugged. The hidden microphone technicians found seems to have been meant for listening to the ambassador’s conversations, rather than spying on Wikileaks founder Julian Assange, who is sheltering there in a bid to avoid extradition to Sweden.

Bolivia complained to the UN. It said that president Evo Morales had been “kidnapped by imperialism” when his flight from Moscow was re-routed to Vienna on suspicions that US whistleblower Edward Snowden was on it. Austrian authorities said he wasn’t.

South Korea proposed new talks with the North. Just three weeks after the last attempt failed, South Korea wants to try to persuade its troublesome neighbor to re-open a jointly operated factory park at the Kaesong industrial zone.

Quartz obsession interlude

Gwynn Guilford on how “flag-hopping” enables a multibillion-dollar illegal fishing trade. “More formally known as using “flags of convenience” (FOC), the practice of flag-hopping involves Country A allowing a vessel from Country B to sail under Country A’s flag, for reasons explained further below. Flag-hopping is a time-honored way of slashing operating costs and dodging taxes and home-country regulations, but the practice has picked up in recent years in part because of overfishing. Flag-hopping vessels bring in roughly 15% of global fishing industry earnings each year […] Because FOC vessels seldom report their catches to the country whose flag they’re sailing, they can exceed fishing quotas without restrictions.” Read more here.

Matters of debate

Morsi’s downfall was the result of unemployment. But a coup won’t help create jobs.

Abe’s “fourth arrow” should be delayed. Tax increases are due in Japan next year, but that’s too soon.

Hillary Clinton has a problem with age. She’s not too old to campaign—her potential advisors are.

The secret to M&A success. Spurn suitors initially, and wait for them to increase their bids.

You won’t be in any doubt about global warming after looking at this chart. Says it all, really.

The shale gas boom has made the US energy-rich. But outdated infrastructure and policies are holding it back.

Surprising discoveries

HIV cured? Scientists don’t want to use the word yet, but two men who had bone marrow transplants now show no sign of the virus.

North Korea has a YouTube account. It’s all about hearts and minds.

The average Silicon Valley wage more than doubled in one quarter. And it was all because of Facebook’s IPO.

China opened the world’s largest building. It’s four times as big as Vatican City and has an artificial sun.

These are the new-age business gurus. They’re celebrity economists.

No more snoozing on the train. A new device will play ads straight into the heads of commuters leaning against windows.

Our best wishes for a productive day. Please send any news, comments, North Korean propaganda videos and novel advertising techniques to hi@qz.com. You can follow us on Twitter here for updates during the day.

You’re getting the Europe and Africa edition of the Quartz Daily Brief. To change your region, click here. We’d also love it if you shared this email with your friends. They can sign up for free here.