The Economist - USA (2020-10-17)

(Antfer) #1

8 The EconomistOctober 17th 2020
The world this week Business


Theimfnowthinksthatthe
world economywill shrink by
4.4% this year, an improve-
ment on its previous estimate,
and grow by 5.2% next year.
The fund warned that although
the outlook is improving,
“prospects have worsened
significantly” in some emerg-
ing and developing economies,
with extreme poverty rising for
the first time in two decades. It
echoed the World Health Orga-
nisation in calling for a multi-
lateral approach to distributing
vaccines for covid-19 when
they become available.

Chineseexports and imports
in September rose at the fastest
rate in 2020, year on year and
in dollar terms. And sales of
cars have rebounded in China,
registering a quarter of growth
for the first time in two years,
according to the passenger-car
association. Forthcoming data
are expected to show that
China’s gdpgrowth rate has
returned to pre-covid levels.

Singapore’s economyshrank
by 7% in the third quarter, year
on year. But compared with the
second quarter it grew by 7.9%,
rebounding from a sequential
contraction of 13%.

As the initial covid jobs-reten-
tion scheme in Britainwinds
down, and a new, leaner plan is
put in place, the outlook for
jobseekers is grim. Unemploy-
ment claims have doubled
since the initial lockdown, to
2.7m. Areas hit hardest by the
new restrictions tend to have
higher unemployment rates.
Liverpool, which is under the
severest controls, already has a
claimant count of 9%.

The Democrats in America’s
House of Representatives,
rejected an improved offer on

stimulusspendingfromthe
WhiteHousethatwouldhave
provided$1.8trnforvarious
measures.Democratshave
passedtheirown$2.2trnbill.A
dealseemsoutofreach;most
RepublicansinCongresswant
thelegislationtobecappedat
around$1trn.

America’sbigbanksan-
nouncedtheirearningsforthe
thirdquarter.JPMorganChase
reporteda surprisebumpin
netprofitcomparedwiththe
samequarterlastyear,to
$9.4bn.Citigroup’snetincome
of$3.2bnwasbetterthan
expected,aswasBankofAmer-
ica’s$4.9bn.Surgingrevenues
droveanalmostdoublingof
profitatGoldmanSachs,to
$3.6bn.Mostbankshavebene-
fitedfromtradinginequities.

Passive pleasure
BlackRockis also having a
good pandemic. Revenue
surged in the third quarter at
the world’s biggest fund man-
ager, generating a sharp rise in
profit. The company’s assets
under management leapt to a
record $7.8trn.

The London Stock Exchange
Group agreed to sell Milan’s
Borsa Italiana, which it took
over in 2007, to Euronext. The
lsehopes the divestment will

smooththethornyregulatory
pathofits$27bnacquisitionof
Refinitiv,a dataandtrading
company,whichwasan-
nouncedinAugust2019.

Losing Cruz control
Alex Cruz was ousted as chief
executive of British Airways,
to be replaced by Sean Doyle,
the boss of Aer Lingus. Mr
Doyle spent 20 years in man-
agement roles at babefore
moving to the Irish airline. The
shake-up comes a month after
Luis Gallego took charge at iag,
the parent company of both ba
and Aer Lingus. Mr Cruz’s
tenure at bawas marked by
cutbacks that soured relations
with workers, especially
during the pandemic.

Passenger revenue slumped by
83% at Delta Air Linesfor the
three months ending Septem-
ber 30th, year on year. Like ba
and others it has been hit
particularly hard by the loss of
lucrative business travel.
United Airlinesreported a
bigger-than-expected quarter-
ly loss of $1.8bn.

Scientists created a material
that can conduct electricity
with perfect efficiency at ambi-
ent temperatures, around 15oC.
Superconductorsthat are
available today, used in medi-

cal scanners and maglev trains,
need to be cooled to hundreds
of degrees below zero and are
thus expensive to build and
operate. The downside of the
new substance, a combination
of sulphur, carbon and hydro-
gen, is that it needs to be com-
pressed to 267 gigapascals,
about a million times the
pressure of a typical car tyre.

amc, the world’s biggest chain
of cinemas, which also owns
the Odeon and ucibrands,
warned that it was running out
of cash. Attendance is down by
85% at its American venues
compared with a year ago
because of social distancing.
Cinemas remain shut in some
cities, notably New York. The
industry has also taken a hit
from the delayed release of
blockbuster films, which may
be postponed again after the
dismal performance of “Tenet”,
which cost $205m to produce
but has made just $50m over
seven weeks in North America.

With cinemas facing a daunt-
ing future, Disneyreorganised
its media and entertainment
business to give priority to
streaming, noting the “rapid
success” of its Disney+ service.
“There is a seismic shift hap-
pening” in how content is
viewed, said Bob Chapek,
Disney’s chief executive.

GDP
2020 forecast, % change on a year earlier

Source: IMF

Britain

Euro area

Brazil

Japan

World

United States

China

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