Headlines

Country Garden, China’s biggest developer by sales, has been pummeled in the markets twice in the past week, the New York Times reported. Investors are panicked by two events: On Aug. 1, the company scrapped a plan to inject cash into the business, something it needs. This week, it missed two interest payments on bonds. The bond payments, which are owed in U.S. dollars, are relatively small in value, but by missing them, the company put itself at risk of default. Country Garden’s market value has more than halved since the start of the year.

China’s deepening economic malaise has entered a potentially dangerous new phase, the Wall Street Journal reported. In July, consumer prices in the world’s second-largest economy tipped into deflationary territory for the first time in two years, as a host of other problems weigh on its recovery after lifting Covid-19 curbs. A drop in exports is accelerating, youth unemployment has hit record highs and its housing market is mired in a protracted downturn.

The French economy should show modest growth in the third quarter as industrial and services activity picked up slightly in July, the central bank said on Wednesday in its monthly business climate report, Reuters reported. "For the third quarter... we expect GDP to show moderate growth compared to the previous quarter," the Bank of France said. It added its latest estimate was broadly in line with its growth forecast released in June, when it said the economy was expected to grow by 0.2% in the third quarter.

Prime Minister Giorgia Meloni on Wednesday defended the decision to impose a surprise windfall tax on profits at Italy's banks after the government watered down the plan following a market rout, Reuters reported. The economy ministry clarified late on Tuesday that the 40% windfall tax, a one-off measure which targets gains from banks' higher interest rates, would not amount to more than 0.1% of their total assets.

Mexico saw its annual inflation rate slow for the sixth consecutive month in July to 4.79%, data from statistics agency INEGI showed on Wednesday, continuing a downward trend spurred by a long cycle of interest rate hikes, Reuters reported. Headline inflation was in line with a market forecast of 4.79%, a more than a two-year low after rising to a record 8.7% last year. The deceleration in recent months has largely been propelled by a decline in energy and food prices, Goldman Sachs analyst Alberto Ramos said.

Babylon Health is looking to sell its UK business, including its 100,000 patient NHS GP practice, and may fall into administration, the company has announced, DigitalHealth.net reported. Following the story back in May that shares in Babylon fell sharply on news that the company was being taken private as part of a new debt plan, the firm announced this week that a $34.5m attempt to restructure and return to private ownership fell through. Babylon GP at Hand, an online-first GP practice with over 100,000 registered NHS patients around London, is the firm’s main remaining NHS service.

Britain’s young adults increasingly are priced out of the housing market and are living with their parents later into life after “giving up on property,” Bloomberg News reported. That’s the conclusion of both official figures from the census and a report from the real estate website Zoopla, which dubbed the group “Guppies” in contrast to the aspirational professionals from the 1980s known as “Yuppies.” About 51% of people in England and Wales aged 20 to 24 opted to live with their parents, census data collected in 2021 and released Wednesday showed.

Argentina’s best chance of making a comeback from the brink and taming spiraling inflation is the economy minister who’s overseen it all, Bloomberg News reported. Sergio Massa, who’s running for president in an October election, is one of the most pro-market politicians within the ruling leftist coalition, according to Hans Humes, a longtime investor in the nation’s sovereign bonds and the chief executive of Greylock Capital Management.

Insured losses stemming from natural catastrophes rose to $50 billion in the first half of 2023, the second highest reading since 2011, reinsurer Swiss Re said on Wednesday, Reuters reported. Severe thunderstorms accounted for 70% of total insured losses, while the February earthquake in Turkey and Syria was the single costliest disaster, the company said in a report. In the United States alone, thunderstorms caused insured losses of $34 billion, the highest ever in a six-month period, while extreme weather conditions in Florida and California forced some insurers to stop sales in the states.

Brazil's retail sales ended the first half of 2023 in positive territory when compared with the previous year but saw its expansion lose steam since January as high interest rates bite Latin America's largest economy, Reuters reported. Sales came in stable in June versus the previous month, government statistics agency IBGE said on Wednesday, below expectations of a 0.4% increase from economists polled by Reuters.