Global Business Brief: Bond Rout, Apple CEO Change and Uber Cuts

This global business brief covers a rout in government bonds, rising inflation pressure, a leadership change at Apple and a major restructuring at Uber, alongside developments at Amazon, Anthropic, Shein and SLB.

Bond yields surge on renewed inflation fears

Renewed concern among investors about inflation, triggered in part by the flare-up in fighting in the Middle East, led to another rout in government bonds, pushing up yields.

The yield on ten-year American Treasuries was above 4.8%, the highest level in three years. The yield on Japan’s ten-year bond hit 3% for the first time since 1996, while yields on German ten-year Bunds were at their highest since 2011. The yield on British ten-year gilts climbed above 5.2%; that’s higher than at any time since 2008, including when Liz Truss was brought down as prime minister in part by the bond markets in 2022.

Kevin Warsh struck a hawkish tone in a keynote speech to central bankers gathered at Jackson Hole. The Federal Reserve’s chairman said it still had “work to do” to curtail inflation, which markets took to mean an interest-rate rise is on the cards, possibly at the Fed’s next meeting.

Euro-area inflation strengthens case for ECB rate rise

The euro area recorded a 3.3% year-on-year rise in the consumer-price index for August. In July the CPI rose by 2.9%. Higher inflation makes it all the more certain that the European Central Bank will lift interest rates again when it meets on September 10th. In June it increased rates by a quarter of a percentage point.

Brazil grows ahead of presidential election

Brazil’s economy grew by 0.5% in the second quarter compared with the previous three months, or by 2% on a year-on-year basis. The GDP data were the last to be released before the presidential election on October 4th.

Shein lists in Hong Kong as France targets fast fashion

Shein’s share price closed down slightly on its first day of trading on the Hong Kong exchange, then tumbled the following day. The ultra-cheap clothing retailer was valued at $26bn at its IPO, a fraction of its worth four years ago, when it started its quest to become a public company.

Meanwhile, France began imposing fees on cheap fast-fashion firms such as Shein and Temu. This is part of a new law that its supporters say will curb sales in a business that floods markets with environmentally unfriendly disposable clothing.

Time for Ternus: Apple changes chief executive

John Ternus took over from Tim Cook as Apple’s chief executive. He takes the reins as the company negotiates a rocky path incorporating AI into its products. It is also expected soon to launch a foldable iPhone, the biggest change yet to its most-important device.

In addition, Apple is fighting OpenAI in court for allegedly stealing trade secrets. The dispute centres on OpenAI’s hiring of former Apple staff. OpenAI argues that staff are free to “leave a company like Apple that has struggled to adopt AI and move to an exciting startup”.

Uber cuts 10% of workforce in restructuring

Uber embarked on a big restructuring of its business, shedding 3,300 positions, or about 10% of its global workforce, mostly in management. The company’s rapid growth over the past decade has seen it become bloated, according to Dara Khosrowshahi, the chief executive, and it needs to streamline in order to invest more in ride-sharing, delivery and robotaxis, its core activities.

It is also limiting the number of employees who can work remotely, to 1% of staff. Uber has expanded its New York office, the biggest outside its San Francisco headquarters, to accommodate more people.

Amazon sued over ad auctions

The Federal Trade Commission and 22 states filed a lawsuit against Amazon, alleging that it “secretly” manipulated auctions for advertisement placements on its website and mobile app, “illegally” extracting $20bn from 1.2m ad customers. Amazon is purported to have said that the complaint is “misguided”.

AI and data centres: Anthropic and SLB deals

The latest deal struck by an AI firm to expand its data capacity saw Anthropic reportedly pay $35bn to Lambda, a cloud-computing service backed by Nvidia. As part of the agreement Nvidia will hold the lease on a new data centre in Texas, according to reports, the latest instance of the chip company helping fund AI infrastructure.

SLB expanded its business in data centres by agreeing to buy Kelvion, a firm specialising in cooling and heat-transfer applications, in a $4.1bn deal. Better known as the world’s biggest oilfield-services company, SLB also builds prefabricated infrastructure for data centres such as electrical rooms and server halls, which it then assembles on site. Kelvion provides technology that cools the equipment. Revenue from SLB’s data-centre business in America grew by 121% last year.

Smile, you’re on camera: Dyson’s $499 toothbrush

The world’s first electric toothbrush with a built-in camera went on sale. Made by Dyson, the CameraJet enables users to inspect their mouths for cavities and ulcers, but also uses an AI algorithm (of course) to blast mouthwash into the tiny gaps between teeth. Its “anti-gravity tank” works better than other flossers, Dyson claims. Retailing at $499, some people may prefer to use more traditional toothbrushes to keep their ivories pearly white.

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