The Economist UK - 27.07.2019

6 The EconomistJuly 27th 2019
The world this week Business

America’s Justice Department

announced a broad antitrust

review of the market power of

online platformsin search,

social media and retailing.

That increases the pressure on

Amazon, Apple, Facebook and

Google to improve their behav-

iour as the calls from some

Democrats to break up those

companies grow louder during

the election season.

Meanwhile, the Federal Trade

Commission confirmed that it

is slappingFacebookwith a

$5bn fine for violating privacy.

It ordered Facebook to change

its attitude to privacy “from the

corporate board-level down”,

and introduce mechanisms

that make its executives

accountable for decisions on

privacy. The firm disclosed that

theftchas launched a

separateantitrust investiga-

tioninto its practices.

Boeing’squarterly net loss of

$2.9bn was its biggest ever. The

aerospace company recently

disclosed an after-tax charge of

$4.9bn in connection with the

worldwide grounding of its 737

maxairliner following two

fatal crashes.

Clash of the titans

Carl Icahn, an activist investor,

stepped up his attack on

Occidental’soffer to take over

a rival oil company, Anadarko,

calling it a “travesty”. Mr Icahn

holds a 4.4% stake in Occiden-

tal and has nominated a slate

of directors to sit on the com-

pany’s board. He has been

highly critical of Warren Buf-

fett’s backing of Occidental’s

bid, which includes putting

$10bn towards its financing.

Soon after ditching an ipoof its

Asian business, which would

have been the world’s most

valuable stockmarket flotation

this year, Anheuser-Busch

InBev agreed to sell its Austra-

lian brewing division to Asahi,

a Japanese beermaker, for

$11.3bn. The world’s biggest

brewer still intends eventually

to list its Asian assets. It needs

the money to pay down the

huge debt pile it amassed

during a takeover binge.

Theimflowered its forecast of

global growththis year, to

3.2%, which would be the

weakest in a decade. In its

latest outlook the fund

described the world economy

as “subdued”; it is specifically

concerned about trade and

technology tensions between

America and China and the

prospect of Britain leaving the

euwithout a deal. Still, the imf

expects British gdpto grow by

1.3% this year, slightly above its

previous projection in April. It

sharply downgraded its growth

forecasts for many emerging

economies, notably Brazil,

Mexico and South Africa.

South Africa’s finance minister

laid out plans to provide

Eskom, which generates most

of the country’s electricity,

with another rescue, this time

worth 59bn rand ($4.2bn).

Moody’s, a credit-rating agen-

cy, said that because the

embattled utility is ever more

dependent on bail-outs it

would regard Eskom’s debt as

part of the government’s.

The Federal Reservetook the

unusual step of qualifying the

remarks of a senior official to

reassure markets that they had

not been made in relation to

the central bank’s forthcoming

decision on interest rates.

Speculation that the Fed might

cut its benchmark rate by half a

percentage point, rather than a

quarter, mounted after John

Williams, who heads the

Federal Reserve Bank of New

York, said that he supports

aggressive easing. Donald

Trump, a critic of the Fed’s

recent monetary tightening,

seized on the remarks, saying

they underlined its “faulty

thought process”.

Costs related to the overhaul of

its business pushed Deutsche

Bankto a €3.2bn ($3.5bn) net

loss in the second quarter, its

biggest quarterly loss in four

years. The German bank

booked about half of a restruc-

turing charge it will take as it

retreats from trading and

slashes 18,000 jobs over the

next three years.

Nissanconfirmed it would cut

12,500 jobs worldwide, or 10%

of its workforce, by 2022, as it

curtails capacity. The Japanese

carmaker has struggled in

recent years. Profit in the latest

quarter fell by 95% compared

with the same three months

last year, to ¥6.4bn ($58m).

General Motors delayed the

large-scale roll-out of its

autonomous-car ride-hailing

service, which it has developed

in collaboration with Cruise,

its self-driving-car unit. It had

hoped to deploy a fleet of

robotaxison the roads of San

Francisco by the end of this

year, but the launch has been

delayed indefinitely. gm, like

its competitors, is still dealing

with technical obstacles and

unresolved regulatory

questions.

Muscle cars

In the week when Tesla

dismayed investors with

another disappointing quarter-

ly earnings report, Ford

unveiled an electric-powered

prototype of its f-150 pickup

truck in response to a claim by

Elon Musk that Tesla’s rival

model would have better

“functionality”. Ford’s f-series

pickups are the best-selling

cars in America. In a show of

strength, its prototype pulled a

freight train for 1,000 feet, a

direct challenge to Mr Musk’s

boast about the better perfor-

mance of his new vehicle.

GDP forecasts

Source: IMF

2019, % increase on a year earlier

0246

China

World

United States

Euro area

Britain

Japan