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iAI unit tests Alphabet’s deep pockets
DeepMind, the AI arm of Google owner Alphabet,
saw its debts to its parent surpass £1bn as the
world’s big tech companies continue to pour huge
sums into research and development.— PAGE 11iGerman output-drop points to recession
A bigger-than-expected fall in industrial production
has compounded fears that Germany is heading
into a recession as the economy reels from a crisis
in carmaking and the US-China trade war.—PAGEiUK auditors set to cull risky clients
The UK’s largest accountancy firms are preparing to
purge risky or unprofitable clients after a string of
corporate collapses and scandals have increased
regulatory scrutiny of the sector.— PAGE 11iChat app Kik responds to SEC lawsuit
The messaging app has accused
the Securities and Exchange
Commission of “twisting” the
facts of a lawsuit that claims
Kik’s initial coin offering was
illegal.— PAGE 13; LEX, PAGE 10iBeijing warned over currency tactic
Letting the renminbi fall in retaliation to US tariff
threats was a political choice but “weaponising” the
currency would not be in China’s economic
interests, economists have said.—PAGEiChinese hackers profit from politics
A team of hackers has been carrying out espionage
operations for Beijing while attacking video games
for cash in an usual blurring of commercial cyber
crime and state-sponsored activities.—PAGEiBurford slides after Muddy Waters blast
The litigation financing specialist has lost about half
its market value after US short-seller Muddy Waters
described it as a “poor business masquerading as a
great one”.— PAGE 12; LEX, PAGE 10Datawatch
Don’t stop the music
Song copyright rulings are killing
creative freedom—JOHN GAPPER, PAGE 9
THURSDAY8 AUGUST 2019 WORLD BUSINESS NEWSPAPER EUROPE
World Markets
STOCK MARKETS
Aug 7 prev %chg
S&P 500 2853.62 2881.77 -0.
Nasdaq Composite 7785.75 7833.27 -0.
Dow Jones Ind 25697.57 26029.52 -1.
FTSEurofirst 300 1449.92 1446.36 0.
Euro Stoxx 50 3307.10 3291.66 0.
FTSE 100 7198.70 7171.69 0.
FTSE All-Share 3935.76 3920.70 0.
CAC 40 5266.51 5234.65 0.
Xetra Dax 11650.15 11567.96 0.
Nikkei 20516.56 20585.31 -0.
Hang Seng 25997.03 25976.24 0.
MSCI World $ 2109.20 2097.32 0.
MSCI EM $ 972.67 973.00 -0.
MSCI ACWI $ 503.97 501.47 0.CURRENCIES
Aug 7 prev
$ per € 1.122 1.
$ per £ 1.215 1.
£ per € 0.923 0.
¥ per $ 105.770 106.
¥ per £ 128.543 129.
SFr per € 1.092 1.
€ per $ 0.892 0.Aug 7 prev
£ per $ 0.823 0.
€ per £ 1.084 1.
¥ per € 118.627 119.
£ index 74.614 74.
SFr per £ 1.183 1.COMMODITIESAug 7 prev %chg
Oil WTI $ 51.09 53.63 -4.
Oil Brent $ 56.46 58.94 -4.
Gold $ 1465.25 1465.25 0.INTEREST RATES
price yield chg
US Gov 10 yr 130.28 1.63 -0.
UK Gov 10 yr 150.32 0.48 -0.
Ger Gov 10 yr -0.59 -0.
Jpn Gov 10 yr 121.79 -0.20 -0.
US Gov 30 yr 109.93 2.14 -0.
Ger Gov 2 yr 101.22 -0.86 -0.price prev chg
Fed Funds Eff 2.40 2.38 0.
US 3m Bills 2.12 2.10 0.
Euro Libor 3m -0.42 -0.41 0.
UK 3m 0.77 0.77 0.
Prices are latest for edition Data provided by MorningstarSHANNON BOND— SAN FRANCISCOFedExwill no longer deliverAmazon
packages in the US, as the ecommerce
group steps up competition in shipping
and logistics with the traditional carri-
ers it has long relied on.The delivery company said yesterday
that it would not renew its contract with
Amazon for ground delivery — bringing
packages to customers’ homes — when
it expires this month.
The decision followed FedEx’s
announcement in June to not renew its
Express air service contract to carry
Amazon packages between warehouses
and delivery hubs. FedEx will still
deliver packages internationally.
Shares in FedEx, which said the shift
was consistent with its strategy to focus
on the “broader ecommerce market”, fell
as much as 3 per cent in early trading.Amazon said: “We are constantly
innovating to improve the carrier expe-
rience, and sometimes that means re-
evaluating our carrier relationships.”
Relations between Amazon, which
sends billions of parcels to customers
every year, and its delivery partners
have grown more fraught in recent years
as the online retailer has expanded its
in-house delivery network.
It operates a fleet of leased cargo
planes as Amazon Air and is building a
$1.5bn air freight hub. Amazon also
owns freight trailers and vans and has
created a network of contractors that
carry items over the so-called last mile
to shoppers’ doorsteps. The company
said in June it planned to begin drone
deliveries in the coming months.
Amazon is moving to take more con-
trol of shipping as costs have ballooned
and it tries to deliver orders to custom-ers ever more quickly in the face of ris-
ing competition.
The “free and fast delivery” standard
it has set has been widely adopted by
other retailers trying to grab a larger
share of online sales. Amazon is spend-
ing hundreds of millions of dollars this
year to cut shipment times to one day
for members of its Prime subscription
programme. Walmart and Target have
also unveiled faster shipping options,
including same-day and next-day, in an
escalating delivery war.
Amazon spent $27.7bn on worldwide
shipping last year. It sends packages
through a number of delivery partners,
including UPS and the US Postal Service
as well as its own network.
FedEx, which has been trying to
expand its business with other ecom-
merce retailers, said Amazon accounted
for 1.3 per cent of revenue last year.FedEx calls time on Amazon deliveries
as retailer’s shipping ambitions grow
© THE FINANCIAL TIMES LTD 2019
No: 40,163★Printed in London, Liverpool, Glasgow, Dublin,
Frankfurt, Milan, Madrid, New York, Chicago, San
Francisco, Orlando, Tokyo, Hong Kong, Singapore,
Seoul, Dubai, DohaReportiPAGE 3India battles slowdown
with interest rate cutAustria €3.80 North Macedonia Den
Bahrain Din1.8 Malta €3.
Belgium €3.80 Morocco Dh
Bulgaria Lev7.50 Netherlands €3.
Croatia Kn29 Norway NKr
Cyprus €3.60 Oman OR1.
Czech Rep Kc105 Pakistan Rupee
Denmark DKr37 Poland Zl 20
Egypt E£42 Portugal €3.
Finland €4.50 Qatar QR
France €3.80 Romania Ron
Germany €3.80 Russia €5.
Gibraltar £2.70 Serbia NewD
Greece €3.60 Slovak Rep €3.
Hungary Ft1200 Slovenia €3.
India Rup220 Spain €3.
Italy €3.60 Sweden SKr
Latvia €6.99 Switzerland SFr6.
Lebanon LBP7500 Tunisia Din7.
Lithuania €4.30 Turkey TL
Luxembourg €3.80 UAE Dh17.The British food
industry has
warned that the
UK might face
food shortages
in the event of a
disorderly no-deal
Brexit. While
half the food
eaten in the UK
is produced
domestically,
30 per cent comes
from the EUCatered by Europe
of total imports to the UK, Dairy & eggs
Cereals
Live animals
Meat
Hot beverages
Sugar
Vegetables & fruit
Fish & shellfishEU Non-EUSource: ONSSeoul destroying
Korean anger runs deep as Japanese
boycott widens— ANALYSIS, PAGE 4
Bayer’s remorse
Can the group recover from botched
Monsanto deal?— LEX IN DEPTH, PAGE 7
PHILIP GEORGIADIS AND
ADAM SAMSON— LONDON
ALICE WOODHOUSE— HONG KONG
PETER WELLS— NEW YORKInvestors piled further into the safety of
government bonds yesterday as fears
deepened over the state of the global
economy after a trio of central banks cut
interest rates and data in Germany
raised concern that it was heading for
recession.
US Treasuries, which have benefited
from their “haven” appeal, extended
their rally, with the yield on the 10-year
note falling up to 11 basis points to 1.
per cent — the lowest level in nearly
three years. Bond yields fall when prices
rise.
German 10-year Bund yields, already
well below zero, fell as much as 5bp tominus 0.588 per cent, while UK 10-year
gilts fell more than 8bp to touch a fresh
record low of 0.440 per cent.
Gold, deemed another safe asset by
investors, topped $1,500 for the first
time in six years after rising 2 per cent.
The market moves came as central
banks in India, New Zealand and Thai-
land signalled worries over a slowing
global economy by cutting interest rates
by more than expected. A steep fall in
German industrial production also
exacerbated fears that the eurozone’s
largest economy could be heading for its
first recession in six years.
US Treasury yields have fallen about
40bp this month as trade tensions
between Washington and Beijing have
escalated.
Joachim Fels, global economic adviserat bond manager Pimco, said Treasuries
could go negative when the world econ-
omy entered its next prolonged slump:
“If trade tensions keep escalating, bond
markets may move in that direction
faster than many investors think.”
The market value of outstanding neg-
ative yielding bonds is now at a record
$15tn, according to Barclays.
In another sign of the global shift
towards negative rates, Nordea yester-
day became the first Danish bank to
offer a 20-year mortgage at0 per cent
interest — days after 10-year loans were
launched at minus 0.5 per cent.
US equities dropped about 2 per cent
after the market opened but regained
some losses, with the S&P 500 down
0.6 per cent in afternoon trading. Euro-
pean equity markets were stable.The price of oil took a battering with
brent crude at one point hitting a seven-
month low of $56 a barrel.
The moveinto bonds and gold and
away from riskier assets came amid a
wave of action from central banks. The
Reserve Bank of India cut rates by 35bp,
a bigger move than forecast; New Zea-
land aggressively cut its benchmark
rate to an all-time low; and Thailand
unexpectedly cut rates.
“These aren’t even terrible econo-
mies. Not like, say, Germany,” said Kit
Juckes,at Société Générale, in reference
to German industrial production data.
Additional reporting by Richard Milne
in Oslo
German data disappointpage 2
India bank battles slowdownpage 3
Marketspages 19 & 20Aggressive rate cuts and dismal
data accelerate dash into bonds
3 Three central banks signal global worries 3 German output slumps 3 Treasuries extend rally
Bridge of size
Venice steers
big ships away
After 13 years of protest, Venetians have
won their battle over the blight of the
giant cruise ship. Vast liners such as the
MSC Magnifica, right, will no longer
dominate the skyline of the picturesque
canals leading into the Italian city’s
lagoon.
Once famed as La Serenissima, or the
Serene One, Venice has been sinking
under a tidal wave of tourists as the dis-
placement of water from the ships dam-
ages the city’s ancient foundations.
Rome said yesterday that it would
begin rerouting the ships from next
month, with up to a third docking at
ferry ports away from the historic cen-
tre by next year. Longer term the liners
will be found new berths at a terminal
agreed by public consultation.
Miguel Medina/AFPGold topped
$1,500 per troy
ounce for the
first time in
six years as
investors fled
to safety
РЕ
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