America’s Justice Department announced a broad antitrust review of the market power of online platforms in search, social media and retailing. That increases the pressure on Amazon, Apple, Facebook and Google to improve their behaviour 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 slapping Facebook with 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 the FTC has launched a separate antitrust investigation into its practices.
Boeing’s quarterly 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 MAX airliner following two fatal crashes.
Clash of the titans
Carl Icahn, an activist investor, stepped up his attack on Occidental’s offer to take over a rival oil company, Anadarko, calling it a “travesty”. Mr Icahn holds a 4.4% stake in Occidental and has nominated a slate of directors to sit on the company’s board. He has been highly critical of Warren Buffett’s backing of Occidental’s bid, which includes putting $10bn towards its financing.
Soon after ditching an IPO of its Asian business, which would have been the world’s most valuable stockmarket flotation this year, Anheuser-Busch InBev agreed to sell its Australian 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.
The IMF lowered its forecast of global growth this 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 EU without a deal. Still, the IMF expects British GDP to 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 agency, 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 Reserve took 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 Bank to 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 restructuring charge it will take as it retreats from trading and slashes 18,000 jobs over the next three years.
Nissan confirmed 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 robotaxis on 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.
In the week when Tesla dismayed investors with another disappointing quarterly 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 performance of his new vehicle.