Good morning. We have updates on yesterday’s bad day for US stocks and a deep dive into Canary Wharf’s challenges.
But first we head to Washington, where Joe Biden has just given a rare national address from the Oval Office. The US president framed his decision to “pass the torch” as a bid to save democracy, saying: “I revere this office, but I love my country more.”
In his first public remarks since announcing he would not seek a second term, Biden also praised vice-president Kamala Harris, who is set to face Donald Trump at the polls in November.
“America is going to have to choose between moving forward or backward, between hope and hate, between unity and division,” he said.
Biden also vowed to press ahead with his domestic and foreign policy agenda, including calling for significant reforms to the US Supreme Court, during his remaining six months in the White House. Here’s more from his speech.
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Politics and M&A: Dealmakers are reconsidering their electoral strategies, with Harris seen as potentially more moderate on antitrust policies than Trump’s populist running mate, JD Vance.
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Bidenomics: The president’s industrial intervention and import tariffs will probably continue under Harris if she wins in November, writes Alan Beattie.
Biden will meet Benjamin Netanyahu later today after the Israeli leader’s controversial address on Capitol Hill — scroll down for more details. Harris will meet Netanyahu separately after missing the joint session of Congress yesterday. And here’s what else I’m keeping tabs on:
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Economic data: The US reports second-quarter GDP, while the Institute for Fiscal Studies publishes its report on UK living standards, poverty and inequality.
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G20: Finance ministers and central bank governors begin a two-day meeting in Rio de Janeiro.
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Results: Anglo American, Lloyds Banking Group, British American Tobacco AstraZeneca, Nasdaq, Nestlé, Northrop Grumman and Unilever report results, while BT Group has a trading update.
Five more top stories
1. US stock indices recorded their worst day in more than 18 months yesterday after lacklustre results from index heavyweights Tesla and Alphabet deepened a technology sector sell-off. The blue-chip S&P 500 fell 2.3 per cent, its worst day since December 2022, while the tech-heavy Nasdaq Composite fell 3.6 per cent, its worst day since October 2022. Here’s why analysts warn “the macro picture appears to be cracking”.
2. Exclusive: Citigroup inaccurately reported to regulators the details of tens of billions of dollars of loans, errors that could complicate its ability to fund dividends and buybacks. The flawed loan files were a primary reason regulators slapped the Wall Street bank with a $136mn fine this month and has damaged the bank’s close relationship with McKinsey, said people with direct knowledge of the matter.
3. Investors and bankers are lining up to raise billions of dollars for new special purpose acquisition companies, defying predictions the asset class would be wiped out after a series of scandals and a regulatory crackdown. New data shows fundraising has been improving slowly this year, rising about 20 per cent over the same period in 2023 to $3.1bn. Read the full story.
4. Benjamin Netanyahu urged the US to stand with Israel in a speech to a joint session of Congress that was boycotted by a number of Democrats and drew thousands of protesters to the streets near the Capitol. The Israeli prime minister defended his country’s war in Gaza and laid out a postwar vision for the enclave. Here’s more from his speech.
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Opinion: Israel’s occupation needs to end, but the region’s problems will not be magically resolved if and when Palestine gains statehood, writes Kim Ghattas.
5. The UK’s fledgling state-owned energy company will focus on offshore wind power and other clean technology projects, working with the Crown Estate. Ministers claim the partnership will help leverage up to £60bn of private investment for GB Energy, which is due to be set up in the coming months under new legislation. Here are more details on the Labour government’s plan.
Visual story
Canary Wharf is entering a new era. Millions of square feet of London office space is becoming available as big tenants depart and landlords face a world of hybrid work. The crux of the challenge is not just the vacant space, but the number of buildings that are due to empty out over the next few years. Our latest visual story explores how Europe’s best-known office district will adapt — and at what cost.
We’re also reading . . .
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The Texas miracle: The US state has attracted hundreds of companies with its low-tax, light-touch approach, but the strains are starting to show.
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‘Heatflation’: Businesses are counting the cost of mitigating the effects of climate change on their workforce, and not all of them will be able to afford it, writes Leo Lewis.
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War in Ukraine: With Russian attacks reducing electricity to a few hours a day, Ukrainians are stripping out Tesla batteries to keep the lights on.
Chart of the day
Economists and officials expect the Olympics to contribute to an expansion in France’s output this year. But ahead of the Games, tourists and ticket holders have yet to make up for an exodus of locals, with brasseries, shops and other small businesses in Paris suffering from a sharp drop in sales as footfall dwindles.
Take a break from the news
In Macau, the influence of former colonial ruler Portugal is in everything from the legal system to the territory’s black-and-white cobbled streets. But as the casino city approaches the 25th anniversary of its handover to China, its Lusophone population faces a new set of challenges, writes William Langley.
Additional contributions from Benjamin Wilhelm and David Hindley
