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The markets await a new testInflation fears are like a zombie menace stalking the markets this summer. Concerns that the Fed’s battle with rising prices may not be finished have roiled stocks and bonds this month, and investors will be glued to the release of Fed meeting minutes for July at 2 p.m. Eastern on Wednesday for clues on what’s next for rates. Since the last rate-setting meeting in July, economic data has showed that inflation is cooling, but that’s hardly calmed the markets. Tuesday’s strong retail sales data, and hawkish comments from some central bankers, have put the markets on edge. He said on Tuesday that he was seeing “positive signs” that inflation was easing, but warned: “I’m not ready to say that we’re done.”

Persons: Mary Ann Bartels, DealBook, ” Neel Kashkari, “, ” Organizations: Fed, “, Federal, Minneapolis Fed

Shares in Hong Kong and Shanghai closed lower again, but, unlike on Monday, the damage didn’t spread across Asia. China’s economy, the world’s second biggest, is in a prolonged slump. That poses a challenge for global growth. has previously forecast that China would account for 35 percent of global growth this year, but that’s looking less likely. The slowdown is hitting everything from commodities to construction, and some big U.S. companies that operate in China don’t expect a rapid turnaround.

Locations: China, Beijing, Hong Kong, Shanghai, Asia

But that bullish prediction is doing little to restore investors’ optimism, as concerns mount about consumer confidence and the health of global economy. Now, concerns are growing about China’s domestic property market after Country Garden, one of the country’s biggest developers, missed debt payments. Those ructions have sent the prices of global commodities, including Brent crude, tumbling on Monday. The group’s woes have sparked contagion fears for China’s shadow banking sector, and hit U.S. business. Despite better-than-expected corporate earnings and signs that inflation is cooling, investors have dumped stocks and bonds this month.

Persons: Goldman Sachs, Brent, Bonds Organizations: Deutsche Bank, Silicon Valley Bank, Treasury Locations: U.S, Stocks, Asia, Hong Kong, Silicon Valley

American luxury-goods companies have long wanted to build a multibrand rival to take on the European giants that dominate the industry. Tapestry and Capri said the deal could lower their costs by $200 million over the next three years. Tapestry is taking on a lot of debt via an $8 billion bridge loan — the largest M.&A. And Capri depends heavily on Michael Kors, which generates 70 percent of its revenue. By comparison, Versace, Capri’s only real luxury brand, accounts for just a fifth of sales.

Persons: Kate Spade, Michael Kors, Versace, Tapestry, Salvatore Ferragamo, They’ve, Capri, Capri’s Organizations: Burberry, Street

Disney’s next moveEven if Bob Iger, Disney’s C.E.O., didn’t have much to reveal about big-ticket M.&A. Streaming is Disney’s future, Mr. Iger said, but the era of pursuing breakneck growth in the business is over. The strategy now is to extract more money from subscribers via hefty price increases for Disney+, and hoping that those efforts don’t drive them away. While the latest figure was less than analysts had expected, that performance is still untenable in the long term, leading Mr. Iger to follow Netflix’s example and raise prices for Disney+ and Hulu. “We grew this business really fast, really before we even understood what our pricing strategy should be or could be,” he told analysts.

Persons: Disney’s, Bob Iger, Iger, don’t, ” Organizations: Disney

Dentons, the largest Western law firm in China in terms of staff, said yesterday it would separate from Dacheng, its unit there. The two firms merged in 2015, and Dentons even added Chinese characters to its logo to signal its commitment to the country. That made it impossible to follow legal industry standards and best practice, a person familiar with Dentons’ decision-making told DealBook. “Standards are diverging between China and Western economies,” Eswar Prasad, a trade policy professor at Cornell and a former head of the I.M.F.’s China division, told DealBook. Employees at financial firms operating in China have reportedly been forced to attend lessons in the ideology of President Xi Jinping.

Persons: Dentons, DealBook, Eswar Prasad, “, Xi Jinping Organizations: Cornell Locations: China, Western, ’, Sequoia

Goldman makes a big executive changeThe man who has been perhaps the most influential executive inside Goldman Sachs for more than a generation has begun to hand over some of his responsibilities. John Rogers, who over his quarter-century at the Wall Street bank has been known as a board and C.E.O. whisperer, will give his role as chief of staff to Russell Horwitz, his onetime deputy, Andrew and DealBook’s Lauren Hirsch are first to report. Rogers has an outsized influence and an intentionally understated public profile. He also wielded considerable influence outside the firm, helping Paulson become Treasury secretary in 2006.

Persons: Goldman, Goldman Sachs, John Rogers, Russell Horwitz, Andrew, DealBook’s Lauren Hirsch, Rogers, David Solomon, Reagan, George H.W, Bush, ” Rogers, Jon Corzine, Hank Paulson, Lloyd Blankfein, Solomon, Paulson Organizations: Goldman Locations: Washington

Mr. Gensler outlined some of his biggest concerns in an interview with DealBook’s Ephrat Livni. could be the next big systemic risk to the financial system. In 2020, Mr. Gensler co-wrote a paper about deep learning and financial stability. Mr. Gensler expects that the United States will most likely end up with two or three foundational A.I. “This technology will be the center of future crises, future financial crises,” Mr. Gensler said.

Persons: Gary Gensler, Gensler, DealBook’s Ephrat Livni, A.I, Mr Locations: United States

But the tech giants provided a snapshot of the state of the global economy: Consumers and companies are cutting back on some costs, but refusing to stop spending on increasingly essential services. Much of the revenue decline was caused by a drop in iPhone sales, which comprise half of Apple’s overall revenue. But revenue from services — including Apple Music, Apple TV+ and App Store sales — grew 8 percent, reaching a record $21 billion. In India, the company set a record for iPhone sales. The company enjoyed a surge in its core online retail business, showing that customers are still spending despite headwinds like rising interest rates.

Persons: they’re, Apple Organizations: Apple, Apple Music Locations: China, India

The fallout from Fitch’s downgrade continuesStocks appear set to open lower today, after falling yesterday in the wake of Fitch Ratings downgrading the United States’s AAA credit rating. But others have said Fitch’s move, while largely symbolic, still points to long-term troubles for the nation and its fiscal health. “There is no willingness on any side to really tackle the underlying challenges,” Mr. Francis said. But “it doesn’t really matter much,” Jamie Dimon, JPMorgan Chase’s C.E.O., told CNBC yesterday, echoing a common refrain to Fitch’s move. Critics of the move noted that according to criteria laid out last year by Fitch itself, including debt-to-G.D.P.

Persons: Richard Francis, Fitch’s, standoffs, ” Mr, Francis, ” Jamie Dimon, JPMorgan Chase’s, Fitch Organizations: Fitch, United States’s AAA, Wall, U.S, Times, JPMorgan, CNBC Locations: U.S

It’s unlikely that the move — only the second downgrade in American history — will dent investor appetite for Treasury notes. But the decision is another sign that Wall Street is worried about political chaos, including brinkmanship over the debt limit that is becoming entrenched in Washington. The move came two months after Washington narrowly avoided a U.S. default, following a prolonged argument over the debt ceiling. (That said, some on Wall Street remain skeptical that the country is headed for a so-called soft landing.) Fitch’s own model shows the U.S. economy deteriorating during the Trump administration and recovering under President Biden.

Persons: Fitch, “, Trump, Biden Organizations: Fitch, United States ’ AAA, Washington, Social Security Locations: U.S, Washington

Mr. Jobs will still be dedicated to fighting cancer. “My dad succumbed to cancer when I was in college at Stanford,” Mr. Jobs said. “I was pre-med because I really wanted to be a doctor and cure people myself. But he returned to the field after completing his master’s degree and led Emerson’s health care division, which has invested in companies and given grants to labs. Of his career path, Mr. Jobs said: “I had never ever wanted to be a venture capitalist.

Persons: Jobs, “, ” Mr, you’re, — Organizations: Stanford Locations: Yosemite

has brought back two former heirs apparent, Kevin Mayer and Tom Staggs, to advise on the future of Disney’s legacy TV businesses were sure to get Hollywood talking. Mr. Mayer and Mr. Staggs will help Iger think about “linear” TV properties like ABC, according to Puck. Both men had once been tipped as potential successors to Iger — Mr. Mayer as head of M.&A. (Mr. Iger chose Bob Chapek to take over, but he was ousted after two years and replaced by … Mr. Mr. Mayer and Mr. Staggs now run Candle Media, an investment company that has bought an array of production studios.

Persons: Robert Iger, Kevin Mayer, Tom Staggs, Iger’s, Mayer, Staggs, Puck, Iger, Mr, Bob Chapek, … Mr Organizations: Disney, ESPN, Media

Twitter has flown awayBye-bye, blue bird: Twitter overnight began rebranding itself as X, replacing its longtime logo with a stylized symbol that was projected onto its San Francisco headquarters. X!” wrote Linda Yaccarino, the company’s C.E.O., as the social network starting rolling out its new branding. Gone is the stylized bird, once dubbed Larry T. Bird by the Twitter co-founder Biz Stone, which became one of the most famous internet logos — and which the company has described as its most recognizable asset. The platform’s about page hasn’t yet been updated, but Ms. Yaccarino repeatedly referred to X in a series of tweets outlining the company’s ambitions. Expect X to more fully pervade the company: Mr. Musk described an internal message to employees over the weekend as the last he’d send from Twitter, and he told a user that a post should be called an “x” instead of a tweet.

Persons: Elon, ”, Linda Yaccarino, Larry T, Stone, Yaccarino, Musk Organizations: Twitter, San Locations: San Francisco

The White House brokers an A.I. The commitments are voluntary, but industry watchers see the move as an important first step toward protecting consumers and businesses. The White House wants the companies to commit to “responsible” development. The White House said it would work with overseas allies, including Britain, Germany, Japan and South Korea, to develop common groundwork on A.I. It comes as China is developing its own guidelines for A.I.

Persons: Biden, White, “ Organizations: White House, Microsoft, Google, White Locations: Britain, Germany, Japan, South Korea, China

Netflix’s focus on streaming has also helped it dodge some of the other problems bedeviling its peers, including weaker-than-expected box office results for expensive blockbusters. (That was also evident in China, which some in Hollywood had hoped could make up for underperformance at home.) While the company will save on content spending in 2023, it will have to pay for American productions at some point. “This strike is not an outcome that we wanted,” Ted Sarandos, the company’s co-C.E.O., told analysts yesterday. In more strike news: Film production in Los Angeles during the second quarter fell to lows not seen since the middle of the pandemic.

Persons: Hollywood, underperformance, Disney’s Robert Iger, Ted Sarandos, Elon Musk Organizations: Netflix Locations: China, Hollywood, Los Angeles

Regulators under administrations dating to President Lyndon Johnson have set out new guidelines, which serve largely as a matter of policy intent because they are not enforced by law. But the sweeping proposals introduced by Lina Khan, the F.T.C. The guidelines broaden the scope for evaluating deals. The regulators say that current laws are not fit for the contemporary age. (Critics of this approach argue that it is nearly impossible to know what threat young technologies may pose in the future.)

Persons: Lyndon Johnson, Lina Khan, Jonathan Kanter, Ms, Khan Organizations: Justice Department, Federal Trade Commission

Parts of Europe and the southern United States are expected to experience record-breaking highs, with consequences for human health and economic activity. As China faces sweltering heat, John Kerry, the U.S. climate envoy, met with the country’s premier to urge cooperation in fighting climate change. Microsoft and Activision reportedly plan to extend a deadline for their deal. The Competition and Markets Authority, which had previously moved to block the transaction, has set an Aug. 29 deadline for the talks. Under new rules negotiated by the Treasury Department, American businesses now have until 2026 before other countries can start imposing new levies on corporations deemed to have paid too little in the United States.

Persons: Fink, Jamal Khashoggi, John Kerry, isn’t, Elizabeth Warren, Tesla, Elon Musk, Biden Organizations: Investment Initiative, Northern, Microsoft, Activision, Bloomberg, The, Markets Authority, Massachusetts Democrat, Elon, Twitter, Treasury Department Locations: Saudi, Europe, United States, China, U.S, Massachusetts

But last week, Chinese state media slammed Goldman Sachs after the Wall Street firm recommended selling shares in local banks because of their exposure to risks in the domestic economy. Group of 20 central bankers and finance ministers are meeting this week in India, with this data adding to their worries about the state of the global economy. Some pessimists say the Chinese economy has peaked and a significant slowdown is coming. But, Mr. Pettis added, international investors need to look at China differently than they once did. “When China was growing at double-digit rates, even poor parts of the economy were growing,” he said.

Persons: ” George Magnus, DealBook, Xi, Goldman Sachs, Covid, Michael Pettis, Pettis, ”, “ Organizations: Oxford University’s China Center, UBS, West, Street, Peking University Locations: China, Beijing, India, Russia, Ukraine, Moscow, Kyiv

Ms. Battle has been leading an effort to have businesses pledge not to finance seabed mining or source seafloor materials in their supply chains. Similarly, prominent banks in Britain, such as Lloyds and Standard Chartered, are refusing to do business with deep-sea mining entities. But critics say that the expense and logistics of mining in the remote ocean — and transporting metals back to land — raise doubts about whether deep-sea mining can be profitable. “This industry could start without being needed,” she said of deep-sea mining. But seabed mining supporters say that existing mining is worse for the environment, and deep-sea mining could help wrestle control of critical metals from China and Russia.

Persons: Barron, DealBook, it’s, Jessica Battle Organizations: ” Regulators, United Nations, World Wildlife Fund, BMW, Google, Samsung, Volvo, Volkswagen, Lloyds, Standard Chartered, International Energy Agency Locations: Britain, China, Russia

Trouble in TinseltownIt’s happening: America’s $134 billion movie and TV industry has ground to a halt after the Hollywood actors’ union voted to strike, joining screenwriters and shutting down virtually all productions. The move reflects the growing aggressiveness of the American labor movement, which has been battling against Starbucks, Amazon, UPS and others. The actors’ union blasted studios for refusing to bend on key issues, including higher payouts from streaming titles and clear limits on the use of artificial intelligence. Shame on them!”The studios argue that the unions’ demands are unrealistic, given the challenges the entertainment industry faces, from streaming to fallout from the pandemic. “This is the worst time in the world to add to that disruption,” Bob Iger, Disney’s C.E.O., said on CNBC yesterday.

Persons: ’, ” Fran Drescher, Bob Iger, Disney’s Organizations: Hollywood, Starbucks, SAG, CNBC Locations: Amazon, —

Musk and Meta enter the A.I. ringThe rivalry between Mark Zuckerberg and Elon Musk won’t be confined to social media posts or a cage fight. Meta is further along than Mr. Musk in developing a commercial A.I. The social media giant is set to release an open-source version of its A.I. Well before Meta took a turn into the metaverse, the firm’s programmers developed LLaMA, an A.I.

Persons: Mark Zuckerberg, Elon Musk, Meta, Yann LeCun Organizations: Meta, Microsoft, Google, Financial Times, OpenAI Locations: buzziest

A reckoning for Lina KhanA federal judge’s decision to let Microsoft close its $70 billion takeover of the video game maker Activision Blizzard didn’t just represent a win for the tech giant. Microsoft is close to clinching the deal. In her 53-page ruling, Judge Jacqueline Scott Corley wrote that the F.T.C. had failed to show that Microsoft buying the maker of Call of Duty would substantially reduce competition in the video game market. That means the Activision deal, the largest tech acquisition ever, could close as soon as next week.

Persons: Lina Khan, Jacqueline Scott Corley Organizations: Microsoft, Activision, Britain’s, Authority

Ramaswamy rethinks political givingAs a biotech entrepreneur, investor and conservative activist, Vivek Ramaswamy cuts a different profile from the veteran politicians who are also seeking the Republican presidential nomination. With the plan that he announced on Monday — in which fund-raisers will get 10 percent of what they drum up for him — Mr. Ramaswamy told DealBook that he’s trying to shake up the business of politics now, too. How it works: Called “Vivek’s Kitchen Cabinet,” the system will give participants a personal link they can share with others, and the campaign will pay them as independent contractors. Mr. Ramaswamy said he’s taking aim at a political norm. After announcing his candidacy in February, he said he had met with professional fund-raisers who promised that they could find wealthy donors in Palm Beach, Fla., in Silicon Valley, and on Wall Street.

Persons: Ramaswamy, Vivek Ramaswamy, DealBook Locations: Palm Beach, Fla, Silicon Valley

‘Serious concerns’ at the PGA TourJust days before Tuesday’s PGA Tour hearing before the Senate Permanent Subcommittee on Investigations, a prominent tour board member, Randall Stephenson, has resigned. His reason? He said he cannot support the golf organization’s proposed tie-up involving LIV Golf, its Saudi -backed rival, DealBook’s Lauren Hirsch and The Times’s Alan Blinder report. In a scathing resignation letter obtained by DealBook, Mr. Stephenson, the former AT&T chair, said that he — like most of the board — was left out of the loop as the tour negotiated a deal with Saudi Arabia’s sovereign wealth fund that jolted the sports world. (In fact, he had already lately taken to attending most board meetings via videoconference, save for last month’s meeting in Michigan.)

Persons: Randall Stephenson, LIV Golf, DealBook’s Lauren Hirsch, Alan Blinder, DealBook, Stephenson, —, Mr, Jamal Khashoggi, ” Mr Organizations: Investigations, AT Locations: Saudi, Michigan

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