8 The EconomistSeptember 5th 2020
The world this week Business
Another raft of data under-
scored the toll that covid-19 is
taking on economies, as more
countries reported record-
breaking contractions in quar-
terly gdp. India’s economy was
around a quarter smaller in
April to June than in the first
three months of the year.
Australia’s gdpshrank by 7%,
Brazil’s by 9.7%, and Turkey’s
by 11%. Those countries are in
recession, in Australia’s case
for the first time in nearly three
decades.Thedollarfelltoanother
two-year low against the euro,
notching up a fourth consec-
utive month of losses, after
Jerome Powell announced a
major shift in policy at the
Federal Reserve. The central
bank’s chairman said that
“maximum employment” and
a “strong labour market” would
guide future decisions, in
effect suggesting the Fed will
not raise interest rates for years
to come. It will now allow
inflation to run above 2%
sometimes, rather than strictly
target that figure as a goal.A first estimate showed that
the annual rate of inflation in
the euro zonefell to -0.2% in
August, the first time in four
years that the currency bloc
has slipped into deflation.
Cheaper energy was the main
factor behind shrinking prices.Teslaannounced that it would
sell new shares “from time to
time” to raise up to $5bn on
capital markets. This came
after the electric-car maker
completed its stock split,
which provided existing in-
vestors with more shares but at
a lower price. Before the split
Tesla’s stock traded above
$2,210 a share, up by 500%
since the start of the year. Itreopenedat$496.Afterthe
splitElonMusk,Tesla’sboss,
joinedtheclubofjustfivemen
intheworldwhoareworth
over$100bn.Stockmarketshadtheirbest
Augustsince1986.Themsci
WorldIndexofshareprices
roseby6.6%overthemonth.
Fuelledbya rallyintech
shares,andbyquarterlyearn-
ingsfromcompaniesthatwere
morepositivethanhadbeen
expected,thes&p 500 and
nasdaqareatrecordhighs.Scrubbing up nicely
Unileverbecame the first big
provider of everyday house-
hold goods to commit to green
sourcing for its cleaning and
laundry products. The con-
glomerate, which sells a wide
range of familiar brands, in-
cluding Persil (in Britain), Surf
and Domestos, said that it
would shift to renewable or
recycled sources of carbon, and
by 2030 no longer use chemi-
cals derived from fossil-fuel
feedstocks, such as petroleum
and natural gas.With food allergieson the rise,
Nestlé struck a deal to buy
Aimmune Therapeutics, which
makes the only approved
remedy in America to treat a
reaction to peanuts amongchildren. Up to 240m people
worldwide suffer with food
allergies, peanut allergy being
the most common.Lee Jae-yong, the de facto boss
of Samsung, was indicted on
new charges in South Korea,
including manipulating share
prices. The latest claims focus
on the merger in 2015 of two of
the conglomerate’s affiliates.
Mr Lee is already being retried
in a related bribery case.Zoom’scustomer base (firms
with at least ten employees)
rose by 458% in the three
months ending July compared
with the same quarter last year,
generating soaring profits.India’sSupreme Court com-
promised and gave the coun-
try’s mobile-phone operators
ten years to pay a collective
$13bn in retrospective licence
fees and penalties that an
earlier ruling found were owed
to the government. The court
had been insisting on immedi-
ate payment, which threatened
to wipe out Vodafone’s venture
in the country.In a surprise announcement,
SoftBanksaid it would sell
$14bn-worth of shares in its
telecoms business, which it
bought from Vodafone in 2006,
reducing its stake from 62% to40%. Proceeds of the sale will
go some way towards shoring
up the debt-laden conglomer-
ate’s balance-sheet.Appleremoved Epic Games’s
access to its app store in a
dispute over the fees that Apple
levies. It had already removed
“Fortnite”, Epic’s most popular
game. Deleting the firm’s ac-
count means its other games
are also unavailable; iPhone
users who have installed “Fort-
nite” can continue to play, but
not with Android or pcgamers.
People claiming that “Fortnite”
is already on their iPhone are
selling their devices for
thousands of dollars online.Pomp and circumstance
Britain’s public broadcaster,
the bbc, did a u-turn and will
allow the lyrics to “Rule, Bri-
tannia!” and “Land of Hope and
Glory” to be sung on the last
night of a popular festival of
music that it broadcasts. The
decision to rearrange the patri-
otic songs without words was
criticised for being soppy and
woke. Restoring them is a wise
move by Tim Davie, the bbc’s
new boss, as he negotiates
funding with the government.
It reportedly wants the bbc,
which is funded by a house-
hold television-tax, to look for
alternative sources of revenue.Dollars per euro
2020, inverted scaleSource:DatastreamfromRefinitiv1.1.1.1.1.SAJJMAMFJ