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TECH REBOUND PROPS UP WALL STREET, BUT GLOBAL GROWTH CONCERNS WEIGH

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US FINANCIAL MARKET | US ECONOMY & POLITICS
 EUROPE & WORLD | TODAY IN HISTORY

DAILY MARKET REPORTS

  • The S&P 500 and the Nasdaq rose on Tuesday, boosted by a rebound in technology stocks, but gains, including on the blue-chip Dow Jones Industrial Average, were kept in check by concerns on slowing global growth.
  • The International Monetary Fund lowered its global economic growth forecasts for 2018 and 2019, and its 2019 estimates for U.S. and China, saying the two countries would feel most of the impact of their trade war next year.
  • The materials index slid 1.66%, weighed down by a drop in chemical companies after PPG’s results and paper packaging companies following BMO’s negative comments on capacity and stock valuations.
  • Energy stocks were up 0.34% as oil prices rose on growing evidence of falling Iranian crude exports.
  • The heavyweight technology sector rose 0.36%, with gains in Microsoft and other software companies more than offsetting a drop in chipmakers, who count Chinese companies among their main clients.
  • Alphabet continued its losses from Monday when it said it would shut down its social network Google+ and tighten its data sharing policies after finding that data of at least 500,000 users may have been exposed to hundreds of external developers.

US FINANCIAL MARKET

IMF cuts its global growth forecasts, citing trade tensions between the US and its trading partners

  • The International Monetary Fund has cut its global growth forecasts as trade tensions between the U.S. and trading partners have started to hit economic activity worldwide.
  • The IMF said the global economy is now expected to grow at 3.7% this year and next year — down 0.2 percentage points from an earlier forecast, according to the fund’s latest World Economic Outlook report released on Tuesday.
  • The IMF maintained that the U.S. and China will grow by 2.9% and 6.6%, respectively, this year but said both would slow more than expected to 2.5% and 6.2%, respectively, in 2019.
  • The fund said that downward revisions were notable in several countries: Argentina, Brazil, Mexico, Iran and Turkey.

Alphabet to shut Google+ social site after user data exposed

  • Google will shut down the consumer version of its failed social network Google+ and tighten its data sharing policies after announcing that private profile data of at least 500,000 users may have been exposed to hundreds of external developers.
  • The issue was discovered and patched in March as part of a review of how Google shares data with other applications, Google said in a blog post. No developer exploited the vulnerability or misused data, the review found.
  • The Wall Street Journal reported earlier that Google opted not to disclose the security issue due to fears of regulatory scrutiny, citing unnamed sources and a memo prepared by Google’s legal and policy staff for senior executives.
  • Google said none of the thresholds it requires to disclose a breach were met after reviewing whether it could identify users to inform, establish any evidence of misuse, and whether there were any actions a user could take to protect themselves.

Google goes global with 10 events for new Pixel phones

  • Alphabet’s Google will unveil the third edition of its Pixel smartphone at 10 media events across the world on Tuesday, a hint that it is prepared to expand geographic distribution of a device it hopes someday is as popular as Apple Inc’s iPhone.
  • Google shipped 2.53 million Pixel 2 and 2 XL devices through the nine months ended June 30, garnering less than 1% of the global market for smartphones, according to research firm Strategy Analytics.
  • Privacy and security features also could be top talking points about the Pixel 3 as Google and other big U.S. tech companies try to bounce back from recent data breach scandals.

Google drops out of bidding for $10 billion Pentagon data deal

  • Google said on Monday it was no longer vying for a $10 billion cloud computing contract with the U.S. Defense Department, in part because the company’s new ethical guidelines do not align with the project, without elaborating.
  • Google said in a statement “we couldn’t be assured that the JEDI deal would align with our AI Principles and second, we determined that there were portions of the contract that were out of scope with our current government certifications.”
  • But thousands of Google employees this year protested use of Google’s technology in warfare or in ways that could lead to human rights violations. The company responded by releasing principles for use of its artificial intelligence tools.

Microsoft expands cloud service in push for $10 billion Pentagon contract

  • Microsoft said on Tuesday its expanded Azure cloud service to help government clients save data on their own servers would be available by the end of the first quarter of 2019, as it battles with Amazon.com for a $10 billion Pentagon contract.
  • The two companies are left in the fray for the lucrative contract after Alphabet’s Google dropped out on Monday, saying the company’s new ethical guidelines do not align with the project.
  • Pentagon’s JEDI, or Joint Enterprise Defense Infrastructure, cloud computing solution contract is part of the Department of Defense’s efforts to modernize its IT infrastructure.

Microsoft to invest in Southeast Asian ride-hailing firm Grab

  • Microsoft is investing in Southeast Asian ride-hailing firm Grab as part of a partnership that the two companies said will allow them to collaborate on technology projects, including big data and artificial intelligence.
  • Grab will work with Microsoft to explore mobile facial recognition, image recognition and computer vision technologies to improve the pick-up experience, the companies said in a statement on Tuesday.
  • Grab has taken its ride-hailing business to 235 cities in eight countries in Southeast Asia in the past six years.

Unions accuse Chevron of ‘massive’ tax avoidance via the Netherlands

  • International and Dutch unions filed a complaint with a global trade body on Tuesday accusing Chevron of funneling billions of euros through letter box companies in the Netherlands to avoid taxation.
  • In a rare step, the federation of Dutch trade unions, the International Transport Workers’ Federation and Public Services International lodged the complaint with the Organisation for Economic Co-operation and Development (OECD) in The Hague.
  • In their 35-page complaint the unions alleged Chevron had used its Dutch subsidiaries to breach OECD disclosure guidelines in respect of their operations with Chevron’s Nigerian, Argentinian, and Venezuelan businesses.

Trian Fund evaluates takeover bid for Papa John’s

  • Nelson Peltz’ Trian Fund Management is evaluating a takeover bid for Papa John’s, the Wall Street Journal reported on Monday.
  • Papa John’s has come under pressure from founder John Schnatter, who resigned as chairman in July following reports that he used a racial slur on a media training conference call.
  • The activist hedge fund recently contacted the pizza chain to collect information as it explores a possible bid.

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US ECONOMY & POLITIC

U.S. Ambassador to United Nations Nikki Haley quits: source

  • U.N. Ambassador Nikki Haley has resigned, a person familiar with the situation said on Tuesday, and the White House said she would appear with President Donald Trump at an event later in the morning.
  • Haley discussed her resignation with Trump last week when she visited him at the White House, these sources said.
  • Earlier this year, Haley said that, “Every day I feel like I put body armor on,” to protect U.S. interests at the United Nations.
  • Haley, who has been one of Trump’s most trusted advisers, would not confirm the report to Reuters when asked about it during a visit to the White House on Tuesday.

‘Monster’ Hurricane Michael strengthens on its way to Florida

  • Hurricane Michael strengthened to a Category 2 storm on Tuesday as it headed for the Florida Panhandle, where residents were ordered to get out of harm’s way ahead of life-threatening waves, winds and rains.
  • Tens of thousands of people were told to evacuate the coastal areas in nine counties as the storm moved over the Gulf of Mexico, carrying winds of 100 miles per hour (155 km per hour) and disrupting oil production.
  • Michael could grow to a Category 3 storm on the five-step Saffir-Simpson scale before it makes landfall on Wednesday, forecasters said, potentially the most powerful storm to strike the Panhandle in at least a decade.
  • After striking Florida, Michael is forecast to move up the East Coast on Wednesday and Thursday through the Carolinas, which are still recovering from Hurricane Florence.

Kavanaugh fight at center of Indiana Senate debate

  • The bitter fight over the confirmation of Supreme Court Justice Brett Kavanaugh spilled over into a key U.S. Senate race in Indiana on Monday, as the Republican challenger, Mike Braun squared off against Joe Donnelly, the Democratic incumbent.
  • Donnelly, who is seeking a second Senate term, has been a top target of Republicans in a state Trump won by almost 20 percentage points two years ago.
  • Braun, a businessman, hammered Donnelly over his opposition to President Donald Trump’s latest nomination to the top court, seeking momentum in a race that polls show to be tight a month before Nov. 6 elections that will determine control of Congress.
  • A Democrat in a Republican-heavy state, Donnelly has shown staying power, with polls largely showing him keeping a slight edge over Braun and Libertarian candidate Lucy Benton, who also participated in Monday’s debate.

Banks back Democrats in bid to rebuild bipartisan support

  • Banks are going to bat for Democrats in the U.S. November midterm congressional elections as part of an ambitious strategy to rebuild the bipartisan support they enjoyed before the 2007-2009 financial crisis.
  • Commercial banks have so far donated a total of $2.5 million to U.S. Senate Democrats in the 2018 election cycle, the largest sum since 2008, according to data from the Center for Responsive Politics.
  • Of the 20 Senate candidates receiving the most money from banks during the 2018 cycle, 15 are Democrats, according to the Center for Responsive Politics data which tracks donations made by political action committees and individuals.
  • The backing of Democrats marks a shift for banks, which have kept a low profile in Washington since the crisis. Democrats had all but abandoned the financial industry in the aftermath, wary of appearing to do favors for Wall Street.

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EUROPE & WORLD

China’s HNA lists property assets worth $11 billion for sale

  • Chinese conglomerate HNA Group has put up for sale property assets worth at least $11 billion, according to documents seen by Reuters, accelerating a push to cut its large debt and restructure.
  • Since January, HNA has sold or agreed to sell over $20 billion worth of assets, including real estate in Sydney, New York and Hong Kong, according to Reuters calculations and media reports.
  • HNA’s total debt stood at 657.41 billion yuan ($94.96 billion) at the end of the first half, down 10.7% from end-2017.

China slashes U.S. LPG imports amid trade war

  • China has choked back on imports of liquefied petroleum gas (LPG) from the United States, traders and analysts said, turning to the Middle East for extra supplies amid the two countries’ trade dispute.
  • Consultancy IHS Markit estimates U.S. imports fell to barely 1 million tonnes during the first eight months of 2018, down from about 2.1 million tonnes for the same period last year.

Turkey tells Saudis to prove missing journalist left consulate, U.S. urges Saudis to support inquiry

  • President Tayyip Erdogan called on Riyadh to prove its claim that journalist Jamal Khashoggi, who has been missing since last week, left the Saudi consulate in Istanbul, while Washington called to support an investigation into his disappearance.
  • The disappearance of Khashoggi, previously a prominent newspaper editor in Saudi Arabia, has sparked global concern, particularly after Turkish sources said over the weekend that authorities believed he was killed inside the consulate.
  • Khashoggi entered the consulate in Istanbul last Tuesday to get documents for his forthcoming marriage. Saudi officials have said that he left shortly afterwards but his fiancée, who was waiting outside, said he never appeared.
  • A Saudi source at the consulate has denied that Khashoggi had been killed at the mission and said the accusations were baseless.

Indonesians step up search for quake victims to beat deadline as toll exceeds 2,000

  • Rescue workers in Indonesia stepped up their search for victims of an earthquake and tsunami on Tuesday, hoping to find as many bodies as they can before this week’s deadline for their work to halt, as the official death toll rose to 2,010.
  • The national disaster mitigation agency has called off the search from Thursday, citing concern about the spread of disease.
  • Perhaps as many as 5,000 victims of the 7.5 magnitude quake and tsunami on Sept. 28 have yet to be found, most of them entombed in flows of mud flows that surged from the ground when the quake agitated the soil into a liquid mire.

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TODAY in HISTORY

  • Aviator Laura Ingalls became the first woman to make a solo transcontinental flight across the United States. (1930)
  • Che Guevara was executed in Bolivia. (1967)

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