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For the third time in three months, economists at Goldman Sachs have lowered the odds of a recession and now put the risk of a downturn in the United States at 15 percent. Yet despite the upbeat outlook, which follows other votes of confidence from Wall Street in recent weeks, global stocks and U.S. futures are in the red on Tuesday morning as inflation fears persist.<\/p>\n
The strong labor market is propping up U.S. households<\/strong>. \u201cReal disposable income looks set to reaccelerate in 2024 on the back of continued solid job growth and rising real wages,\u201d Jan Hatzius, Goldman\u2019s chief economist, wrote in a client note. On Friday, the Labor Department reported that wage gains had cooled in August, but real wages, adjusted for inflation, are trending higher.<\/p>\n Goldman is far more bullish than others.<\/strong> In March, the bank raised its recession odds to 35 percent in the wake of Silicon Valley Bank\u2019s collapse and worries that contagion could hurt other lenders. But fears of a bank-led downturn have all but disappeared. Still, a Bloomberg survey of economists puts the likelihood of a U.S. recession in the next 12 months at 60 percent.<\/p>\n Voters aren\u2019t feeling so confident either.<\/strong> Poll numbers released on Monday by The Wall Street Journal showed that President Biden\u2019s popularity is still sagging, partly because of his track record on the economy. (Voters also say he\u2019s too old to run for re-election.) It\u2019s the latest indication that the White House\u2019s summer P.R. offensive, playing up the gains reaped from Bidenomics, is not resonating with Americans.<\/p>\n Investors aren\u2019t feeling bullish.<\/strong> After last week\u2019s rally, the S&P 500 looks set to start the week on a down note, as rising oil prices drive inflation concerns. Another potential storm cloud: Investors are questioning whether the benchmark index can hold onto its 18 percent year-to-date gains if inflation rises this autumn.<\/p>\n Brent crude oil hit a high for the year on Monday. <\/strong>Markets are bracing for the OPEC+ cartel, led by Saudi Arabia and Russia, to announce this week that it will continue to pull back on production. Rising energy prices could force central banks to stay hawkish on interest rates.<\/p>\n On the good-news front: The futures markets see the chances of the Fed or the European Central Bank raising rates this month as increasingly unlikely.<\/p>\n Jill Biden tests positive for Covid, and President Biden doesn\u2019t.<\/strong> The first lady will stay at the family home in Delaware, while Biden, who will be tested regularly ahead of a trip to the Group of 20 meeting in India on Thursday, has returned to Washington. Jill Biden\u2019s illness is the latest reminder of an uptick in coronavirus infections that experts say should not be as dangerous as previous ones.<\/p>\n North Korea\u2019s leader will hold talks with Vladimir Putin about supplying weapons to Russia.<\/strong> Kim Jong-un is expected to discuss the possibility with his Russian counterpart in person this month, according to American and allied officials. Meanwhile, oil and gas platforms in the Black Sea are increasingly becoming military targets in the Ukraine conflict.<\/p>\n An embattled Chinese real estate giant avoids default.<\/strong> Country Garden, the nation\u2019s biggest property developer, told investors it had made a late $22.5 million interest payment before a 30-day grace period expired. The move buys the company some breathing room, but China\u2019s real estate industry remains in crisis and is a huge drag on the economy \u2014 and Country Garden still must repay $15 billion in debt over the next 12 months.<\/p>\n Tech moguls and others escape Burning Man.<\/strong> Thousands who had flocked to the annual festival in the Nevada desert were finally able to leave on Monday, after heavy rain reduced the only road in and out of the event to mud. Among those affected were venture capitalists and well-known tech executives like Sergey Brin, the Google co-founder. The corporate lawyer and former Obama administration official Neal Katyal recapped his escape on social media.<\/p>\n As of today, 15 million Americans are still unable to watch the U.S. Open and other programming live on their TVs, thanks to a dispute between Disney and the cable giant Charter that has blacked out Disney channels like ESPN in major markets like New York City and Los Angeles.<\/p>\n Most of the time, so-called carriage fights get resolved quickly and quietly. But this battle could reshape the media landscape, as the two companies tussle over core issues like streaming.<\/p>\n The back story: <\/strong>Like most carriage disputes, this is about money. Disney wants to charge more for its channels, which also include FX and the Disney Channel (and, in some markets, the ABC broadcast station).<\/p>\n Meanwhile, Charter wants to include Disney\u2019s streaming services \u2014 Disney+, ESPN+ and Hulu \u2014 in its cable packages at essentially no charge, according to Disney. Charter says much of the programming on streaming also airs on TV; Disney counters that it also produces exclusive content for those platforms.<\/p>\n It\u2019s a clash of the future versus the past. <\/strong>Content providers like Disney have been increasingly shifting their focuses to streaming platforms, as customers flock to watching stuff online.<\/p>\n But such companies are also dependent on the huge, high-margin fees that cable companies fork over to carry their traditional channels \u2014 payouts that cable providers understandably don\u2019t want to make, especially since they\u2019re losing subscribers to cord cutting.<\/p>\n Charter says it\u2019s mulling a radical move: <\/strong>getting out of the pay-TV business altogether. \u201cWe\u2019re either moving forward with a new collaborative video model, or we\u2019re moving on,\u201d Chris Winfrey, the company\u2019s C.E.O., told analysts on Friday. (Such a transformative decision is in keeping with the history of Charter\u2019s most influential shareholder, the iconoclastic telecom mogul John Malone.)<\/p>\n Having Charter, America\u2019s second-biggest cable company after Comcast, get out of pay TV could inspire others to follow suit, depriving media companies of a huge cash cow. The alternative \u2014 letting Charter offer effectively discounted access to streaming services \u2014 could lock in smaller revenue streams for content companies.<\/p>\n Disney has increasingly recognized the problems with relying on carriage fees,<\/strong> which have been shrinking; that\u2019s why Bob Iger, its C.E.O., has publicly floated the idea of divesting its traditional TV assets. But it faces an uphill battle with Charter at a tough moment in time, as it struggles to make streaming profitable.<\/p>\n The auto industry has long been an important part of the European economy. One big reason: Some of the continent\u2019s biggest carmakers, such as Volkswagen and Mercedes-Benz, have built big businesses in China, the world\u2019s largest car market. But Chinese carmakers are now turning the tables and making major inroads in Europe, leading the race for electric vehicles and sending a shiver through the continent\u2019s manufacturers.<\/p>\n The shift is on display this week <\/strong>at the I.A.A. Mobility car show in Munich, writes The Times\u2019s Melissa Eddy. On the first day of the event, BYD, the electric car and battery maker backed by Warren Buffett, unveiled two new vehicles. And Xpeng said it would start selling its cars in Germany next year, branching beyond Norway, Denmark, the Netherlands and Sweden. Also, Leapmotor announced it would bring its S.U.V. to Europe in 2024.<\/p>\n Europe is a crucial battleground. <\/strong>Gas-fueled cars are set to be banned in the E.U. in 2035, and the industry fears it is falling behind its Chinese rivals on electrics. Inovev, an auto industry consulting firm, says Chinese brands accounted for 8 percent of new E.V.s sold in Europe this year, up from 4 percent in 2021.<\/p>\n Chinese companies also dominate the E.V. supply chain<\/strong>. Lower labor costs and local battery suppliers have enabled China\u2019s carmakers to build a big lead. CATL, the manufacturer, alone accounts for about a third of the batteries in all E.V.s sold worldwide. UBS analysts say Western car manufacturers could lose a fifth of their global market share by the end of the decade.<\/p>\n The continent\u2019s carmakers face a Chinese conundrum as they play catch-up.<\/strong> Some executives refer to \u201cChina speed\u201d to describe the urgency they need to compete with their lower-cost rivals. But they will ultimately face a dual threat from China that won\u2019t end soon, Henry Sanderson, executive editor at Benchmark Mineral intelligence, an E.V. supply chain consulting firm, told DealBook. \u201cEuropean automakers either face exports of Chinese E.V.s or they face a Chinese battery supply chain coming to Europe that they will have to rely on,\u201d he said.<\/p>\n The earnings season is winding down, but there\u2019s plenty on the holiday-shortened calendar this week. Here\u2019s what to watch.<\/p>\n Wednesday:<\/strong> The Fed\u2019s latest \u201cbeige book\u201d report, which details economic activity region by region, is set for release. The European Union will also release retail sales data for the eurozone. The 20-nation bloc has been troubled by higher and more persistent inflation than the United States.<\/p>\n In earnings news, GameStop, the video game retailer, reports. The meme-stock momentum that made the stock soar has fizzled, pushing the company\u2019s shares down roughly 25 percent over the past year.<\/p>\n Thursday:<\/strong> Investors will be parsing speeches from a trio of Fed officials \u2014 Raphael Bostic, John Williams and Patrick Harker, presidents of the Atlanta, New York and Philadelphia Feds, respectively \u2014 for clues on what the central bank will do at its meeting set for Sept. 19-20.<\/p>\n Friday:<\/strong> Kroger, the supermarket chain that is in the process of merging with Albertsons, reports second-quarter results. On the Fed-speech circuit: Bostic and Lorie Logan, president of the Dallas Fed, are scheduled to speak on the economy.<\/p>\n Saturday:<\/strong> The two-day Group of 20 summit begins in India with one big absence: Xi Jinping, China\u2019s leader, will not attend the annual gathering for the first time since coming to power in 2012.<\/p>\n Deals<\/strong><\/p>\n \u201cInvestors raise questions after Sequoia Capital\u2019s turbulent year\u201d (FT)<\/p>\n Shares in the skincare company L\u2019Occitane dropped sharply after its billionaire chairman ended talks to take it private. (Bloomberg)<\/p>\n The private equity firm Thoma Bravo is reportedly close to a deal to buy NextGen Healthcare, a tech services company. (Bloomberg)<\/p>\n Policy<\/strong><\/p>\n Why Apple and Microsoft are arguing to E.U. regulators that some of their products aren\u2019t<\/em> that popular. (FT)<\/p>\n Sam Altman, the C.E.O. of OpenAI, is the first recipient of Indonesia\u2019s new golden visa as the country seeks to draw international investors. (Bloomberg)<\/p>\n Best of the rest<\/strong><\/p>\n Novo Nordisk, the maker of the weight-loss drugs Ozempic and Wegovy, is now Europe\u2019s most valuable company by market capitalization. (FT)<\/p>\n Black Americans are suffering from occupational segregation that bars them from the highest-paying careers. (NYT)<\/p>\n Here\u2019s a close look at Spotify\u2019s underperforming billion-dollar bet on podcasting. (WSJ)<\/p>\n We\u2019d like your feedback! Please email thoughts and suggestions to dealbook@nytimes.com.<\/p>\n Andrew Ross Sorkin<\/span> is a columnist and the founder and editor at large of DealBook. He is a co-anchor of CNBC\u2019s “Squawk Box” and the author of “Too Big to Fail.” He is also a co-creator of the Showtime drama series “Billions.” More about Andrew Ross Sorkin<\/span><\/p>\n Ravi Mattu<\/span> is the managing editor of DealBook, based in London. He joined The New York Times in 2022 from the Financial Times, where he held a number of senior roles in Hong Kong and London. More about Ravi Mattu<\/span><\/p>\n Bernhard Warner<\/span> joined the The Times in 2022 as a senior editor for DealBook. Previously he was a senior writer and editor at Fortune focusing on business, the economy and the markets. More about Bernhard Warner<\/span><\/p>\nHERE\u2019S WHAT\u2019S HAPPENING <\/span><\/h3>\n
A fight over the future of TV <\/h2>\n
\u201cChina speed\u201d <\/h2>\n
The week ahead <\/h2>\n
THE SPEED READ <\/span><\/h3>\n