FT Lex : Wine market’s future is far from rosé

Wine market’s future is far from rosé
Global consumption has been in decline since it peaked in 2007

Champagne is more closely associated with celebration than wine.

But Pernod Ricard boss Alexandre Ricard would be justified in cracking open a celebratory bottle of red, after the French drinks group’s deal to sell most of its wine business, including the Jacob’s Creek and Campo Viejo brands. It is a wise move: global wine consumption continues to drain away.

Pernod is selling its wine assets in Australia, New Zealand and Spain — representing annual production of 90mn litres — to a consortium of investors led by Bain Capital. The same group earlier this year took over Australian wine producer Accolade Wines, owner of Hardys.

Getting out of lower-margin wine was always likely to be a question of when, not if, for Pernod, whose core businesses revolve around spirits such as Chivas Regal whisky and Absolut vodka. UK rival Diageo unloaded its wine in 2015.

Details on the deal are thin. But Pernod’s operating margins in wine — although never disclosed — are likely to be around half of the group’s average of 27.6 per cent, estimates Jefferies analyst Edward Mundy. In 2023 its wine output fell 2 per cent year over year, versus 11 per cent growth at its international spirits brands. Wine accounts for 4 per cent of its €12.1bn annual net sales.

Global wine consumption has been in decline since it peaked at about 25bn litres in 2007. Last year that fell to an estimated 22.1bn litres, according to the International Organisation of Vine and Wine (OIV).

Younger drinkers prefer throwing back cocktails or spirits. In recent years, wine prices have risen as producers passed on higher costs. But alcohol consumption is also dropping as consumers become more health-conscious.

The result is that global wine production in 2023 was 7 per cent higher than consumption. Volume should decline by an average 1 per cent a year out to 2028, according to drinks research group IWSR. And no growth is expected from rising prices either — even if some parts of the market, like rosé, are more resilient.


In Australia, market conditions have been particularly punishing since China in 2020 imposed tariffs on imported Aussie wines. These were lifted this year, but not before the market suffered a damaging glut. In mid-2023, inventories of Australian wine were 16 per cent above the 10-year average.

The buyer of Pernod’s wine brands will want savings from the combination with Accolade. The deal requires competition approval first: the joint business will have a share of about 27 per cent of the Australian market, according to Bernstein’s Trevor Stirling. But if regulators approve, expect further deals to be uncorked.

FT : Ratcliffe’s race to reboot Man Utd extends beyond the pitch

Ratcliffe’s race to reboot Man Utd extends beyond the pitch
New billionaire owner has embarked on sweeping changes in an effort to restore club’s fortunes

Sir Jim Ratcliffe promised to reboot one the world’s most famous sporting institutions when he bought a 27 per cent a stake in Manchester United in December. The petrochemicals billionaire has wasted little time.

Eight months on, new executives have been drafted in, hundreds of job cuts announced, the playing squad upgraded and the coaching staff bolstered. The lengthy process of upgrading the club’s tired stadium and outdated training ground has started.

But after years of disappointment and drift, can a hard-driving approach honed in the cut and thrust of the chemicals industry restore the 20-time champions of English football to glory? 

“Sports teams aren’t generally known for being leading edge in terms of efficiency,” said Tim Fidler, director of research at United shareholder Ariel Investments. “Ineos has clearly built up a business over many years that has that as a strategy.”

Ratcliffe is driving the changes with a handful of trusted lieutenants from his chemical empire Ineos, which has a wealth of experience in elite cycling, sailing and motorsport, even as the billionaire Glazer family remain majority owners of United.

In keeping with Ineos’ reputation for a ruthless focus on lean operations, Ratcliffe has moved quickly to make his mark at United, a club known in the industry for a bloated workforce. Around 250 jobs — almost a quarter of the workforce — are at risk in a redundancy programme.

The plan is to “cut very deep on costs”, according to one person with knowledge of the situation, who said that staff morale is low. “These guys are not messing around . . . it could be a bumpy ride.” 

The rapid steps to transform the club are in contrast to the experience at OGC Nice, the French football team that Ratcliffe acquired in 2019.

Ineos initially took a light-touch approach, leaving power left in the hands of long-standing executives. When results failed to improve, more drastic changes followed. 

The overhaul at United also supports the view that disentangling United’s sporting operations, which Ratcliffe assumed responsibility for as part of his purchase of a stake, from the rest of the club would prove impossible.

With the start of the Premier League season just a month away, some question whether Ratcliffe’s methods will successfully translate to English football’s most successful club.


“Ineos very much have the approach of big industry; they’ve been spectacularly successful and feel like they can apply those to football,” said one senior United figure. “But every business is different, and there’s a lot of soft skill in football.”

Ratcliffe’s task is one of the toughest in football. United has failed to win a league title since Sir Alex Ferguson, the club’s most successful manager, retired in 2013. Last season the team finished eighth, United’s lowest position since the formation of the Premier League more than 30 years ago. 

The prolonged period of underachievement cannot be pinned on a lack of money. Since Ferguson’s retirement, the club has paid €1.85bn on transfers, according to figures from Transfermarkt, while recouping around €500mn from sales.

The €1.34bn net spend in that period is the highest in global football. 

Andrea Sartori, founder of consultancy Football Benchmark, said the post-Ferguson era had been “very bad” across a range of metrics.

“Whether we are looking at the transfer market spending or success on the pitch — all of the numbers, they just don’t look great,” he said. “Looking at profit before or after tax, the last ten years have pretty much been a disaster.”

Following last season’s disappointing performance in the league, United held talks with several potential new managers but ultimately opted to extend the contract of Dutch head coach Erik ten Hag, who led the team to victory in the FA Cup.

But there have been changes in the dugout, with former United fan favourite Ruud van Nistelrooy among the new arrivals on the coaching team, while Dan Ashworth, previously of Newcastle United, has been installed as the new sporting director.


Changes in senior management have been significant, a sign that Ratcliffe’s influence has extended well beyond sport.

Omar Berrada joined from arch rival Manchester City as chief executive, Ineos executive Roger Bell replaced long-standing finance chief Cliff Baty, while general counsel Patrick Stewart stepped down after more than 18 years at the club. 

“It’s about time someone acted sensibly. It shouldn’t be seen as revolutionary that an overblown workforce is trimmed and a clear governance structure is implemented,” said Chris Brady, chief intelligence officer at sports advisory firm Sportsology.

United has also moved quickly to strengthen the squad, bringing in Netherlands forward Joshua Zirkzee from Bologna for €42.5mn and talented young centre back Leny Yoro from Lille for €62mn. In a letter to fans this week, Berrada said the summer transfer window would be among his “immediate priorities”. 

“I can promise you that we will do everything we can to deliver the titles, trophies and culture expected of this club,” Berrada wrote.

But United is operating in a tougher regulatory environment than in years gone by. The Premier League has come down hard on teams for breaching rules that limit losses to £105mn over three seasons.

United, which has not generated an annual profit since before the pandemic, has been among those pushing for the rules to be rethought. 

Earlier this month, the club reported a third-quarter net loss of more than £71mn, compared to £5.5mn a year earlier, in part due to £30mn in costs related to Ratcliffe’s stake purchase.

Meanwhile the Monaco-based billionaire’s changes are being brought in without him having full ownership of the club.

The Glazers, particularly executive co-chair Joel, remain heavily involved in many of the big decisions, including senior appointments, according to people with knowledge of the matter.

One said the ownership group was “very aligned”.

A senior sports executive who knows the club well said Ineos would have to be keen to demonstrate change. “The message to the players is: ‘It wasn’t you, it was the environment’,” the executive said. “Hopefully it creates a honeymoon period.”


While improvements on the pitch remain the short-term focus, the Ineos founder’s equity injection has also given United the impetus to begin investing in its infrastructure, including a £50mn project to modernise the men’s training complex at Carrington. 

The far bigger challenge will be upgrading or replacing the club’s home ground. Old Trafford remains the biggest club stadium in English football, but rivals, such as Tottenham Hotspur, have built more modern facilities that generate significant revenue beyond match days.

Ratcliffe has put together a task force to consider the options that includes former United player Gary Neville and Lord Sebastian Coe, who chaired the London 2012 Olympics. He has also floated the idea of seeking public money to help with the costs of creating a “Wembley of the North”.

But with tighter regulation and a recent history of losses, Sartori said the challenges facing Ratcliffe are “significantly more difficult to fix” now than they might have been 10 years ago.

“In other businesses you have a certain degree of predictability on your return on investment,” he said. “I don’t think football does — that’s the beauty of it.”

United decline to comment.

FT : Supply chain squeeze threatens to blow UK wind power plan off course

Supply chain squeeze threatens to blow UK wind power plan off course
Disruptions in the sector are forcing some green energy developers to defer key projects

At the port of Nigg on the Cromarty Firth, a vessel arrives from Hull to deliver 108m-long Siemens Gamesa blades for the 60 turbines forming Ocean Wind’s Moray West offshore wind farm.

The turbines are pre-assembled on the quayside before the Wind Orca, an installation vessel, transports the vast structures 22km offshore into the Moray Firth.

However, a global rush for turbine parts and cabling, as well as delays in plugging into the under-developed national electricity grid, are exacerbating turbulent market conditions that have forced some developers to defer projects.

Availability of vessels such as the Wind Orca is another major obstacle, with new markets in the US and Asia willing to pay above the odds to secure these specialised ships for nascent projects.  

The offshore wind industry is not only central to the Labour government’s goal of decarbonising electricity generation by 2030, underpinning the pathway to net zero carbon emissions, it also forms one of Europe’s greatest economic opportunities: a transition to clean energy away from the fossil fuel industry on which northern Scotland has been dependent for decades.

“It’s extremely challenging: a lot of developers aren’t able to get projects over the line at the moment,” said Adam Morrison, Ocean Winds’ UK country manager. “We are dragging Moray West into existence.”


An arresting image on a marine traffic tracking website encapsulated the race against -time facing the UK offshore wind market, of which Scotland accounts for about two-thirds. “We could see many of the biggest vessels sailing simultaneously to the US,” said Morrison.

“Macro factors are the issue: the challenge — why some projects fail — is wider market conditions,” he added.

Madrid-based Ocean Winds, a joint venture between EDP Renewables and ENGIE, this month celebrated the first export of power from the wind farm off the Caithness coast, in the far north east of Scotland.

It has operations in seven other countries, focusing on Europe and the US, highlighting growing international options for developers.


When complete early next year, Moray West will add 882MW to the UK’s offshore wind target of 50GW by the end of the decade, up from around 15GW now.

But the sector faces several headwinds, and not just the rough seas that frequently make construction too dangerous.

“As blades get larger, smaller vessels carry fewer of them, raising costs,” said Ed Watt, a partner at Addleshaw Goddard, a law firm that works in the sector. “This increases demand further for the latest generation of installation vessels.”

Connecting to the national electricity grid is another pressing issue for wind farm developers, some of which must wait up to 15 years for a connection. “We should be on emergency footing on network build,” he said.

SSEN, the transmission arm of energy giant SSE responsible for the network in northern Scotland, is consulting with communities as it unveils detailed routes of large overhead pylons to transfer power southwards.

But activists are rallying against the planned upgrade, bemoaning the impact of vast metal structures on Scotland’s countryside, tourism and agriculture. They aim to table formal objections to the plans that could trigger public inquiries, thereby delaying the rollout.

Companies such as SSE wanted the maximum statutory time limit for planning decisions to be 12 months to provide certainty for developers and communities, executives said. The industry fears that longer delays could threaten 2030 grid expansion targets.


“I am very worried,” said Morrison. “The best we can do is be advocates to show how projects like Moray West deliver for local economy — that helps build the case that societally we need to build more [electricity] networks.”

Ocean Winds said Moray West, the latest in its 6GW development portfolio of UK offshore wind farms, should inject more than £800mn into the Scottish economy, as well as 70 long-term roles in the operations based in Buckie on the Moray coast.

Around half of the workers on the project have come from the oil and gas industry — a key concern in the north-east, where many reject Labour’s opposition to new exploration licenses.

Sir Keir Starmer’s key offering to Scotland — the state-owned energy company GB Energy that aims to facilitate private investment into clean power — aims to boost employment and eventually reduce bills. It has a budget of £8.3bn over five years to fund community wind farms and the supply chain.

As international competition in the offshore wind gold rush heats up, the prime minister has said he wants to “win the race”.

Morrison, who also sits on the board of industry body Renewables UK, said the formation of GB Energy, which will be headquartered in Scotland, had been generally welcomed by the private sector.

GB Energy should have a commercial focus, he added, treating “market deficiencies” by driving investment into research, new technologies and securing raw materials critical to transmission, such as steel and copper.

“We should have a more strategic plan for energy,” he said. “And GB Energy can sponsor that.”

FT : Drahi’s Altice raised more than £1bn margin loan against BT stake

Drahi’s Altice raised more than £1bn margin loan against BT stake
Heavy borrowing raises questions over whether the stake can be maintained in the long term

Altice took out a more than £1bn margin loan against its stake in BT, in a move that underscores the risky borrowing that is now piling pressure on billionaire Patrick Drahi’s sprawling telecoms group.

The Franco-Israeli billionaire’s 24.5 per cent stake in BT was built through substantial loans and derivatives financing, allowing Altice to borrow heavily against the shares, according to people familiar with the situation and loan documents seen by the Financial Times.

The company’s borrowing against its £3.5bn stock position raises questions around whether Drahi can maintain the BT stake for the long term, particularly given that his wider empire is struggling with mounting debts. 

Altice borrowed heavily in an era of cheap money to expand from a niche cable company into a global telecoms empire stretching from the US to Portugal. But lenders that extended more than $60bn of debt across its three main business units are now braced for restructuring negotiations, as concerns mount around the impact of both increased interest rates and a criminal probe into one of Altice’s co-founders.

Altice UK, the investment vehicle that is now the largest shareholder in BT, initially built up a stake of 18 per cent in 2021 using so-called funded equity collars from BNP Paribas, Citigroup and Morgan Stanley, according to the people familiar with the arrangement, and documents. This financing technique combines derivatives with bank loans, allowing investors to simultaneously build a stake using borrowed money and hedge their position against a share-price fall. 

In January 2022, Altice signed a new margin loan facility with the same three lenders and Deutsche Bank, allowing it to borrow up to £1.5bn against BT shares. Altice then drew down the majority of the loan over the course of the year in order to unwind some of its collar financing.

Margin loans are deemed risky for borrowers because lenders can demand additional collateral — usually in the form of cash — if the underlying shares fall in value. 

These margin calls can pile more pressure on investors at times of financial distress. Banks can also seize the shares and sell them if a borrower defaults on the loan. 

In contrast, equity collars protect investors against a share-price fall, in exchange for them capping potential returns from a rising stock price. 

Altice later used further collar financing to raise its stake in BT to almost 25 per cent in May 2023, according to one of the people familiar with the terms, who added that the group has since repaid a portion of the margin loan. 

Altice, BT, BNP Paribas, Citigroup, Deutsche Bank and Morgan Stanley declined to comment. 

While Altice is experiencing pressure in debt markets, the four banks behind the BT margin loan are not particularly concerned about their exposure, according to people close to the lenders. This is because the loan is well covered by the value of BT shares — a large and liquid stock that is in the FTSE 100 index.

Drahi owns the majority of Altice’s shares, although in the past he signed complicated side deals to share a chunk of his profits with Armando Pereira, Altice co-founder, who was arrested in Portugal as part of a corruption probe last year.

Pereira has denied any wrongdoing, while Drahi last year said that if the allegations against his longtime business partner were true he felt “betrayed and deceived”. 

Altice’s margin loan on BT initially had a loan-to-value ratio of 60 per cent — meaning it had to pledge £100 of stock for every £60 borrowed — and a three-year maturity. 

BT’s shares are down nearly a quarter since the loan was taken out, although they rallied after its new chief executive Allison Kirkby outlined her plans to turn around the FTSE 100 company at its annual results in May.

Drahi was also recently joined by another telecom tycoon — Carlos Slim — on BT’s shareholder register; it was disclosed in June that the Mexican billionaire had taken a 3 per cent stake in the UK telecoms group.

When Altice UK raised its stake in BT to almost 25 per cent in May 2023, Drahi’s telecoms investment group said he “continues to hold management in high regard and remains fully supportive of their strategy”. 

It reiterated it had no plans to make a bid for the UK telecoms group but said it would reconsider this if a third party announced an offer. 

Fortune : Black Swan’ investor warns the ‘greatest bubble in human history’ is a

‘Black Swan’ investor warns the ‘greatest bubble in human history’ is about to pop and stocks could lose more than half their value

Mark Spitznagel, cofounder and chief investment officer of the hedge fund Universa Investments, has frequently sounded the alarm about bubbles popping and other extreme market events.
In an interview with the Wall Street Journal, the long-time associate of The Black Swan author Nassim Nicholas Taleb said a severe crash is on the way and stocks could lose more than half their value, while acknowledging that his latest warning should come as no surprise.

"I think we’re on the way to something really, really bad—but of course I’d say that," Spitznagel said.

His hedge fund specializes in tail-risk hedging, a strategy that seeks to prevent losses from unforeseeable and unlikely economic catastrophes, also known as "black swans."

He had famously made astronomical gains on such events, including the COVID-19 pandemic, and more recently has warned about U.S. debt and the "greatest credit bubble in human history."

Even as stocks have come well off recent highs, with the S&P 500 suffering its worst week since April, Spitznagel expects the market rally to continue for months and get wilder because the "Goldilocks phase" of slowing inflation and rate cuts from the Federal Reserve will stoke bets that markets will continue running higher.

But he also warned Fed rate cuts are often the opening signal for severe market reversals, telling the Journal that "You don’t feel like a fool for making a bearish argument."

Spitznagel sees parallels between today and the dot-com bust but thinks the selloff that's coming will be even worse than that. That's because market extremes now represent the "greatest bubble in human history," he added.

With U.S. debt already at historic levels, the federal government will have less capacity to respond, and the economy could enter a recession by the end of this year, he predicted.

Spitznagel's latest comments echo what he told Fortune's Will Daniel in April, when he said investors’ positive sentiment alone can’t carry markets higher indefinitely and that higher rates are weighing on the economy.

“The Fed did a lot. And now it’s sort of jawboning its way out of it. But it can’t take back what it did,” he said. “Markets follow fundamentals at the end of the day, but you can have these little Goldilocks zones where it can get sort of untethered.”

Fed Chairman Jerome Powell and other central banks have hinted in recent days that inflation is finally coming under control and that rate cuts may be coming soon, with markets widely seeing the first one in September.

But Spitznagel said in April that fallout from the “the fastest, greatest tightening ever, by some regards, into the greatest credit bubble of human history” can’t be avoided, adding "That’s when things are going to be really bad—and at that point, it’s probably also too late to get out."

>>> Weekend Papers Summary

Weekend Papers Summary

FINANCIAL TIMES
-A massive IT outage has disrupted companies worldwide, including airlines, financial services, and media groups, due to a security update from CrowdStrike. The outage caused thousands of flights to be cancelled, workers in cities from Tokyo to London to be unable to log on to their computers, hospital operations to be postponed, and some television channels to go off air. The outage is attributed to a problem with Microsoft's Windows, affecting PCs and servers, suggesting millions of computers may need to be fixed. Some services, including airlines and media groups, have begun to return online, but the unprecedented scale of the fault means it could take days for every Windows user to recover. Elon Musk, Tesla's CEO, has called the outage the "biggest IT fail ever."
-The seizure of Russian-owned luxury assets, including mansions, cars, and private jets, has captured the public's imagination. Anti-corruption campaigners hoped these vessels would be auctioned off and donated to Ukraine. However, the future of these superyachts remains unresolved, as they have racked up vast maintenance costs for taxpayers, been the target of sabotage plots by anti-war activists, and have been prized trophies in the west's coordinated response to Russia's aggression. For western governments, resolving the fate of these superyachts will be a high-stakes test of the effectiveness of economic sanctions.
-Democratic lawmakers, including two US senators, have called for Joe Biden to withdraw from the White House presidential race, posing a significant threat to his re-election campaign. Sherrod Brown, a veteran Ohio senator, has become the fourth senator to urge Biden to end his campaign. New Mexico senator Martin Heinrich has also urged Biden to drop out, while Jon Tester of Montana and Vermont's Peter Welch have publicly called on Biden to abandon his White House bid. Henrich emphasized the importance of a focus that is bigger than any one person and said it was "in the best interests of our country" for the president to end his campaign. Nearly a dozen House members also urged Biden to step aside, with four US House members stating it was time for the 81-year-old president to "pass the torch to a new generation of Democratic leaders." Subscribers can share up to 10 or 20 articles per month using the gift article service.
-The UN's highest court has ruled that Israel's 57-year-old occupation of East Jerusalem and the West Bank is illegal under international law. The ICJ found that almost every aspect of Israeli policy in the West Bank was illegal, including the creation and support of sprawling settlements, discriminatory laws, and Israeli sovereignty over East Jerusalem. The opinion, backed by a majority of judges, called Israel's continued presence in the occupied territories unlawful and called for its dismantling of settlement infrastructure and evacuation of all settlers from the Occupied Palestinian Territory. The ruling, in response to a 2022 request by the UN General Assembly, criticized Israel's interpretation of its obligations under the Geneva Conventions.
-The family of Joseph Safra, the late billionaire and the world's wealthiest banker, has settled a global feud over his $25B estate. Under an agreement announced on Friday, Joseph's son Alberto will divest his interests in the dynasty's business empire and drop claims that his father's will was unlawfully changed by his mother and siblings when he was no longer compos mentis. Alberto argued that Joseph's last testament was purposely altered to reduce his equal share in the family fortune after he left the Safra group to set up a competing venture. The settlement ends a prolonged, multi-jurisdictional legal fight that has been waged in offices and courtrooms from the US to Switzerland via São Paulo and London.
-Silicon Valley's wealth and power are backing Donald Trump to win the White House in November, alongside his vice-presidential candidate, JD Vance. This support has grown since the attempted suicide of Elon Musk on July 13. Early internet pioneers Marc Andreessen and Ben Horowitz, who control $35B in venture capital, have also pledged their support. Keith Rabois, an early executive at PayPal and LinkedIn, pledged $1M to his campaign. Khosla Ventures managing director, Khosla, has criticized Biden as the worst president of his lifetime. The momentum for Trump's campaign has grown since the attempted suicide on July 13.
-Wall Street Journal reporter Evan Gershkovich has been convicted of espionage by a Russian court and sentenced to 16 years in a high-security penal colony. This marks the first US reporter to be arrested for spying in Russia since the Cold War. Russian President Vladimir Putin has suggested that Gershkovich's conviction could be a precursor to a prisoner swap involving Russians in the US and other western countries.
-Vietnam's Nguyen Phu Trong, the country's most powerful leader, has passed away at the age of 80. Trong, who served as the general secretary of the Communist party for 13 years, was known for his anti-corruption measures and political upheaval. His death has raised questions about succession in Vietnam, which has emerged as an alternative manufacturing hub to China. Trong consolidated power during his tenure, weakening the other parts of Vietnam's leadership system, including the president, prime minister, and National Assembly chair. Nguyen Khac Giang, a visiting fellow at Singapore's Iseas-Yusof Ishak Institute, said that Vietnam is potentially heading to a very uncertain period of leadership transition, with any potential successor struggling to fill the void left by Trong.
-British and EU politicians and officials are set to resume regular dialogues with the EU under plans by Sir Keir Starmer's government to reset relations. Nick Thomas-Symonds, Starmer's EU ministerial envoy, emphasized the need for structured dialogue to build closer ties on issues such as security, trade, and migration. He also confirmed that Britain is seeking an UK-EU leaders' summit to help seal the new partnership. Thomas-Symonds also mentioned that talks with Brussels would include efforts to dismantle Brexit trade barriers. Starmer hosted a European Political Community meeting of 44 European leaders, pledging to move on from the trauma of Brexit. Since the UK's departure from the bloc in January 2020, official contacts between London and Brussels have withered, except for official-level meetings to discuss aspects of the UK-EU trade deal.
-Investors are shifting away from megacap tech stocks, which have driven market rallies for years, in favor of smaller companies and other sectors. The Russell 2000 small-cap index has risen by 7% since last Thursday, driven by falling inflation and an improving earnings outlook. Meanwhile, the Magnificent Seven, megacap tech stocks that have dominated the blue-chip S&P 500 index's gains, have fallen, exacerbated by a global sell-off in semiconductor companies. The majority of other stocks in the index have climbed, led by sectors such as financials, energy, and real estate. Jurrien Timmer, director of global macro at Fidelity, believes that a broad-based earnings recovery, Fed pivot, and well-behaved bond markets present a larger menu of options for investors.
-Dozens of people have been killed in Bangladesh as student protests over jobs have exposed widespread fury against Sheikh Hasina's authoritarian government and deep economic distress in the world's second-largest garments exporter. University students have been demanding the end of a controversial government job quota system, which they say benefits supporters of Sheikh Hasina's ruling Awami League party and has become a symbol of corruption. Authorities have banned rallies in Dhaka, closed universities, blocked internet services across the country, and disrupted mobile networks. Students claim they have been set upon by Awami League supporters and police, while authorities blame protesters for vandalism, including setting fire to the offices of the country's state broadcaster BTV. UN's human rights commissioner, Volker Türk, has called on the government to engage with the protesters and hold perpetrators accountable for all acts of violence and use of force, especially resulting in loss of life.

THE NEW YORK TIMES
-As President Biden recovers from Covid and faces pressure from allies, he has been fuming at his Delaware beach house, resenting what he sees as an orchestrated campaign to drive him out of the race and bitter toward some of those he once considered close. According to people close to him, the leaks appearing in the media in recent days are being coordinated to raise the pressure on him to step aside. He considers Representative Nancy Pelosi, the former House speaker, the main instigator, but is irritated at President Obama as well, seeing him as a puppet master behind the scenes. The friction between the sitting president and leaders of his own party so close to an election is unlike anything seen in Washington in generations, especially because the Democrats now working to ease him out were some of the allies most critical to his success over the last dozen years. It was Obama who elevated Biden from a presidential also-ran to the vice presidency, setting him up to win the White House in 2020, and it was Pelosi and Senator Chuck Schumer, the Senate Democratic leader, who pushed through his landmark legislative achievements.
-Representative Nancy Pelosi of California has expressed her preference for a competitive process of an open primary if President Biden were to end his campaign, rather than an anointment of Vice President Kamala Harris as the new Democratic presidential nominee. In a meeting with the California delegation, Pelosi stated that she did not believe Biden could win, citing polling data she shared privately with the president. She also stated that if Biden stayed on the ticket, Democrats would lose any chance of winning back control of the House. Lawmakers questioned Pelosi about the landscape if Biden decided to step aside under pressure, and she favored a competitive process.
-A tech outage caused chaos and disruption worldwide on July 19, 2024, when CrowdStrike, a cybersecurity company based in Austin, Texas, sent out a flawed software update to its customers running Microsoft Windows software. The update caused computers to crash, grounded flights, and prevented 911 line operators from responding to emergencies. Hospitals canceled surgeries, and retailers closed for the day. The actions were all traced back to a batch of bad computer code. CrowdStrike, which makes software used by multinational corporations, government agencies, and other organizations to protect against hackers and online intruders, was unable to send the update to its customers that run Microsoft Windows software. The actions were traced back to a batch of bad computer code. Airlines grounded flights, 911 line operators could not respond to emergencies, hospitals canceled surgeries, and retailers closed for the day.
-A global tech outage affecting Microsoft users affected airlines, banks, and retailers worldwide. The outage was attributed to a software update from CrowdStrike, a widely used cybersecurity firm. In many countries, flights were grounded, workers could not access their systems, and customers could not make card payments in stores. While some problems were resolved within hours, many businesses, websites, and airlines continued to struggle to recover. The outage affected industries such as airlines, hospitals, train networks, and TV stations. The disruptions have left businesses struggling to recover and continue to operate.
-Investigators have discovered a small drone in the car owned by the gunman who attempted to assassinate former President Donald J. Trump. They believe the drone was used to survey the site of Trump's rally in Butler, Pennsylvania, at least once before the shooting. Thomas Crooks, 20, visited the area near the fairgrounds used for the rally on July 7 and appears to have made another trip the morning of the shooting. According to geolocation data found on one of his two cellphones, Crooks seemed to have flown the drone to gather footage for a layout of the Butler Farm Show grounds using a preprogrammed flight path. The discovery of the drone was delayed when investigators found two rudimentary explosive devices in his Hyundai Sonata shortly after Crooks was killed by a sniper after bloodying Trump's ear, killing a man in the crowd, and seriously injuring two other people.
-A left-wing coalition in France's parliamentary elections came first, upending a predicted victory for the far right. Supporters filled the streets, expressing their belief that something else is possible. However, less than two weeks later, the coalition started fighting among itself. Their candidate lost the election for the president of the National Assembly, a vote that had gained outsize importance in a fragmented political landscape. Now, many are wondering what happens next. Zahia Hamdane of France Unbowed, the far-left party of firebrand leader Jean-Luc Mélenchon, said it will be hard. The alliance of four left-wing parties — Communists, Socialists, Greens, and France Unbowed — was hastily pulled together after President Emmanuel Macron dissolved the National Assembly and called for snap elections last month.
-South Korea's Supreme Court has ruled that same-sex couples qualify for dependent coverage under national health insurance, a decision that rights activists hope could pave the way for legalizing same-sex marriage in the country. The decision would allow same-sex couples to register their partners as dependents in national health insurance coverage, as married couples or couples in a common-law marriage can. The ruling ruled that denying a same-sex couple national health insurance dependent coverage "just because they are of the same sex" constitutes a serious discrimination that infringes upon citizens' "dignity and values, their rights to pursue happiness, their freedom of privacy and their rights to be equally treated by the law." The plaintiff, So Seong-wook, filed the legal complaint in 2021, arguing that tying a couple to the same sex would result in a "discrimination" that infringed upon their rights to privacy, happiness, and equal treatment by the law.
-Secretary of State Antony J. Blinken and national security adviser Jake Sullivan have confirmed that an agreement to free hostages held in Gaza and establish a cease-fire is close, as administration officials prepare for a tense visit to Washington next week by Israel's Prime Minister, Benjamin Netanyahu. Blinken said the talks were "inside the 10-yard line," while Sullivan said there was no expectation that an agreement would be reached before Netanyahu addressed a joint session of Congress on Wednesday, a speech some American officials fear could throw up new obstacles to an agreement with Hamas.

THE NEW YORK POST
-Dr. Anthony Fauci, former director of the National Institute of Allergy and Infectious Diseases, has downplayed the injuries sustained by former President Donald Trump during his assassination attempt. Fauci, who advised both Trump and President Biden during the COVID-19 pandemic, stated that the ear wound he received was superficial and that there was no further damage. Trump fell to the ground after gunfire from would-be assassin Thomas Matthew Crooks erupted and nicked his ear. He emerged with blood gushing from his right ear and has since worn a bandage over it.
-Democratic National Convention delegates are openly discussing the possibility of President Biden refusing to step aside or dropping out of the race at the August convention. DNC delegate Elaine Kamarck, who has been on the DNC's Rules Committee for decades, informed other delegates that there is no such thing as Joe Biden releasing his delegates. Biden won nearly all the pledged delegates available in the primary since he ran largely unopposed. Kamarck pointed to the part of the rule that states delegates "reflect the sentiments of those who elected them," saying they could technically decide that Biden is no longer representative of the people's choice. The Democratic National Convention will begin in mid-August. A revolt on the convention floor could amount to a political earthquake toppling the commander in chief, and momentum in the runup, including among other party leaders, could dictate the outcome. What happens in the end may remain unclear, but it is clear that Democrats have the right to choose their nominees and that the outcome of the convention will be determined by the delegates' conscience and the democratic pressure.
-CrowdStrike's shares fell over 10% after a faulty software update caused a global business shutdown. The crisis affected millions of customers using Microsoft Windows, crippling airlines, banks, hospitals, and other clients. CrowdStrike CEO George Kurtz apologized for the crisis, which caused massive disruption globally. Wedbush analyst Daniel Ives noted that the stock will be under pressure after the global outage related to Microsoft has caused massive disruption. Tesla, SpaceX, and Elon Musk have said they have "deleted CrowdStrike from all our systems, so no rollouts at all" and halted production lines in Texas and Nevada due to the global IT outage.

>>> Barron's Weekend Summary

Barron's Weekend Summary: Former President Donald Trump accepted the Republican presidential nomination in a raucous four-day celebration


Cover:
-Former President Donald Trump accepted the Republican presidential nomination in a raucous four-day celebration in Milwaukee, Wisconsin. Trump's speech focused on unifying notes and attacking his political enemies, painting a grim picture of a nation in decline. He promised to fix a world in disarray and promised to stop wars with just a telephone call. Trump's pitch to voters is grounded in his economic successes as the 45th president, with tax cuts, deficit spending, and economic nationalism. However, his more statist vision would represent greater change for the country and its economy than his 2017-21 term. If Trump wins the Nov. 5 election, he may have a unified Republican Congress and a presidency strengthened by the Supreme Court.

Interview:
-The Federal Reserve's decision to cut interest rates is expected to benefit emerging markets, as lower rates may weaken the dollar and strengthen local currencies, allowing central banks to cut rates and boost domestic demand. Alison Shimada, the head of Allspring Global's emerging markets strategy, has co-managed the Allspring Emerging Markets Equity Income fund for the past dozen years, which has returned almost 18% in the past 12 months, beating 80% of its peers. The fund's latest average yield of 3.6% is higher than its benchmark's 2.5% and triple that of the S&P 500 index. Shimada's career began in Asia, working as a senior analyst at Fidelity in Japan and investing in Malaysian stocks during the late-1990s emerging markets currency crisis. The MSCI Emerging Markets index has returned 4% in the past month, outpacing the S&P 500's near-4% return.

Tech Trader:
-The tech-heavy market has been a concern for years, with the Nasdaq Composite experiencing its worst day in two years. The week also saw new concerns about Taiwan's safety and the global chip supply chain. A software failure caused widespread disruptions, including airlines, payment systems, personal computers, and corporate websites. The six largest tech companies make up 30% of the S&P 500. Analysts predict 15.9% growth in the Information Technology sector and 18.7% for the Communications Services group, with overall S&P 500 earnings expected to grow 9.7%. However, tech's starring role during earnings season may be underplayed, with four tech companies generating 56% earnings growth in the second quarter. Without them, the S&P 500's growth could be a more pedestrian 5.7%.

The Trader:
-Visa's stock has been weighed down by concerns about its future dominance, which began during the pandemic and intensified after a federal judge rejected a March settlement between card companies and merchants. The market is concerned that Visa and Mastercard will have to reduce the fees they charge businesses, which would eat into their profits. Visa stock has risen just 3.4% this year, trailing the S&P 500 by about 13 percentage points. With Visa stock down 7.3% since its March 21 record high, it might be time to buy the dip. J.P. Morgan analyst Tien-tsin Huang believes these concerns are reasonable, but sees the recent underperformance in the stocks as overdone. Investors should look past the noise heading into its earnings on Wednesday.
-The market rotation of the past week left investors dizzy, with the Nasdaq Composite dropping 3.7%, the S&P 500 index falling 2%, and the Dow Jones Industrial Average rising 0.7%. The moves reflect ongoing optimism that the Federal Reserve will begin cutting interest rates in September, as lower inflation and weaker jobs data suggest it's time to ease monetary policy. The market may also be responding to higher odds of a Red Sweep following the assassination attempt on former President Donald Trump, as big GOP wins could bring lower taxes, reduced regulations, and other policies favorable to companies. However, it was unclear how broad or sustainable the rotation would be. The Russell 2000, for example, gained 11.5% over the five trading days ended July 16, nearly 10 percentage points more than the S&P 500 during that period, the largest five-day gap between the two since at least 1986.

Features:
-Microsoft has faced criticism for computer issues, with global airlines, hospitals, enterprises, and banks experiencing mass PC outages and disruptions due to a buggy update sent by cybersecurity company CrowdStrike. The update, which targeted Windows users, was sent to CrowdStrike customers who use Windows. Microsoft blamed CrowdStrike for the issue, stating that it wasn't caused by a hack or other security issue. CrowdStrike has its own update mechanism and doesn't use the update feature built into the Windows operating system. The update came with a bug, which CrowdStrike will have to fix in the future to keep customers. Microsoft has a public relations issue, not a software problem. CrowdStrike has its own update mechanism and is actively supporting customers to assist in their recovery.
-Chinese top leaders acknowledged the economic risks but did not provide any indication of the overhauls investors want to address the country's structural challenges. Chinese stocks have been struggling after a 30% rally in the first few months of the year, as officials' measures to stabilize the property market and boost property and consumer confidence fell flat. Investors want more stimulus and clarity on how China will tackle its structural issues, including restructuring bad debts and rebuilding confidence among private businesses and consumers. China's economy is losing steam after growing at an average rate of 5% in the first half of the year.

Europe:
-Major US airlines, including United Airlines, Delta Air Lines, and American Airlines, have grounded some flights due to communications issues linked to global technology outages. The Federal Aviation Administration's system status page states that American Airlines has safely re-established its operation. The issue was caused by an update from cybersecurity company CrowdStrike. Microsoft employees and outside technology professionals familiar with the matter told The Wall Street Journal. Delta has resumed some flights after a vendor technology issue impacting airlines and businesses globally. Delta and United issued travel waivers. As the systems are restored, some flights are resuming, but many customers may experience delays.

Emerging Markets:
-Femsa, a holding company with a near-majority stake in Coca-Cola Femsa, the largest franchise bottler of Coke products in the world by volume, is looking attractive for investors. The company's shares have slumped over 9% this year to $117.60, following the departure of its CFO and CCO in February and the naming of an acting CEO last July. The Mexican presidential election, which resulted in a victory for Claudia Sheinbaum and a sweep of Congress by her left-wing Morena party, further pushed the shares lower. However, Femsa's bottling business is a steady grower, and the company has been selling nonessential businesses to continue returning cash to shareholders in the form of buybacks and dividends. The real story is its expanding convenience-store business in South America, Central America, and possibly even Texas.

Commodities:
-Alcoa reported better-than-expected second-quarter results ahead of closing a key deal, leading to a higher stock price after a market wobble. The company disclosed adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda) of $325M, with earnings per share of 16 cents from $2.9B in sales. Wall Street was expecting Ebitda of $314M and EPS of 8 cents from sales of $2.8 billion. Citi analyst Alexander Hacking called the print solid and has a $50 price target for the stock. Shares were up over 2% in after-hours trading at $37.19, after closing 4.8% lower in regular trading. The S&P 500 fell 1.4%. Alcoa's full-year shipments forecast remains unchanged, with the company expecting to ship 12.8M tons of alumina and 2.6M tons of aluminum in 2024. The acquisition of Alumina AWC Limited is expected to be completed in early August, reducing operating costs and simplifying the company's structure.

Streetwise:
-No uC C JPM T META pdate

TechCrunch : What we know about CrowdStrike’s update fail that’s causing global

What we know about CrowdStrike’s update fail that’s causing global outages and travel chaos

A faulty software update issued by security giant CrowdStrike has resulted in a massive overnight outage that’s affected Windows computers around the world, disrupting businesses, airports, train stations, banks, broadcasters and the healthcare sector.

CrowdStrike said the outage was not caused by a cyberattack, but was the result of a “defect” in a software update for its flagship security product, Falcon Sensor. The defect caused any Windows computers that Falcon is installed on to crash without fully loading.

“The issue has been identified, isolated and a fix has been deployed,” said CrowdStrike in a statement on Friday. Some businesses and organizations are beginning to recover, but many expect the outages to drag on into the weekend or next week given the complexity of the fix. CrowdStrike CEO George Kurtz told NBC News that it may take “some time for some systems that just automatically won’t recover.” In a later tweet, Kurtz apologized for the disruption.

Here’s everything you need to know about the outages.

What happened?
Late Thursday into Friday, reports began to emerge of IT problems wherein Windows computers were getting stuck with the infamous “blue screen of death” — a bright blue error screen with a message that displays when Windows encounters a critical failure, crashes or cannot load.

The outages were first noticed in Australia early on Friday, and reports quickly came in from the rest of Asia and Europe as the regions began their day, as well as the United States.

Within a short time, CrowdStrike confirmed that a software update for Falcon had malfunctioned and was causing Windows computers that had the software installed to crash. Falcon lets CrowdStrike remotely analyze and check for malicious threats and malware on installed computers.

At around the same time, Microsoft reported a significant outage at one of its most used Azure cloud regions covering much of the central United States. A spokesperson for Microsoft told TechCrunch that its outage was unrelated to CrowdStrike’s incident.

Around Friday noon (Eastern time), Microsoft CEO Satya Nadella posted on X saying the company is aware of the CrowdStrike botched update and is “working closely with CrowdStrike and across the industry to provide customers technical guidance and support to safely bring their systems back online.”

What is CrowdStrike and what does Falcon Sensor do?
CrowdStrike, founded in 2011, has quickly grown into a cybersecurity giant. Today the company provides software and services to 29,000 corporate customers, including around half of Fortune 500 companies, 43 out of 50 U.S. states and eight out of the top 10 tech firms, according to its website.

The company’s cybersecurity software, Falcon, is used by enterprises to manage security on millions of computers around the world. These businesses include large corporations, hospitals, transportation hubs and government departments. Most consumer devices do not run Falcon and are unaffected by this outage.

One of the company’s biggest recent claims to fame was when it caught a group of Russian government hackers breaking into the Democratic National Committee ahead of the 2016 U.S. presidential election. CrowdStrike is also known for using memorable animal-themed names for the hacking groups it tracks based on their nationality, such as: Fancy Bear, believed to be part of Russia’s General Staff Main Intelligence Directorate, or GRU; Cozy Bear, believed to be part of Russia’s Foreign Intelligence Service, or SVR; Gothic Panda, believed to be a Chinese government group; and Charming Kitten, believed to be an Iranian state-backed group. The company even makes action figures to represent these groups, which it sells as swag.

CrowdStrike is so big it’s one of the sponsors of the Mercedes F1 team, and this year even aired a Super Bowl ad — a first for a cybersecurity company.

Who are the outages affecting?
Practically anyone who during their everyday life interacts with a computer system running software from CrowdStrike is affected, even if the computer isn’t theirs.

These devices include the cash registers at grocery stores, departure boards at airports and train stations, school computers, your work-issued laptops and desktops, airport check-in systems, airlines’ own ticketing and scheduling platforms, healthcare networks and many more. Because CrowdStrike’s software is so ubiquitous, the outages are causing chaos around the world in a variety of ways. A single affected Windows computer in a fleet of systems could be enough to disrupt the network.

TechCrunch reporters around the world are seeing and experiencing outages, including at points of travel, doctors’ offices and online. Early on Friday, the Federal Aviation Administration put in effect a ground stop, effectively grounding flights across the United States, citing the disruption. It looks like so far the national Amtrak rail network is functioning as normal.

What is the U.S. government doing so far?
Given that the problem stems from a company, there isn’t much that the U.S. federal government can do. According to a pool report, President Biden was briefed on the CrowdStrike outage, and “his team is in touch with CrowdStrike and impacted entities.” That’s in large part because the federal government is a customer of CrowdStrike and also affected.

Several federal agencies are affected by the incident, including the Department of Education, and Social Security Administration, which said Friday that it closed its offices as a result of the outage.

The pool report said Biden’s team is “engaged across the interagency to get sector by sector updates throughout the day and is standing by to provide assistance as needed.”

In a separate tweet, Homeland Security said it was working with its U.S. cybersecurity agency CISA, CrowdStrike and Microsoft — as well as its federal, state, local and critical infrastructure partners — to “fully assess and address system outages.”

There will no doubt be questions for CrowdStrike (and to some extent Microsoft, whose unrelated outage also caused disruption overnight for its customers) from government and congressional investigators.

For now, the immediate focus will be on the recovery of affected systems.

How do affected customers fix their Windows computers?
The major problem here is that CrowdStrike’s Falcon Sensor software malfunctioned, causing Windows machines to crash, and there’s no easy way to fix that.

So far, CrowdStrike has issued a patch, and it has also detailed a workaround that could help affected systems function normally until it has a permanent solution. One option is for users to “reboot the [affected computer] to give it an opportunity to download the reverted channel file,” referring to the fixed file.

In a message to users, CrowdStrike detailed a few steps customers can take, one of which requires physical access to an affected system to remove the defective file. CrowdStrike says users should boot the computer into Safe Mode or Windows Recovery Environment, navigate to the CrowdStrike directory, and delete the faulty file “C-00000291*.sys.”

The wider problem with having to fix the file manually could be a major headache for companies and organizations with large numbers of computers, or Windows-powered servers in datacenters or locations that might be in another region, or an entirely different country.

CISA warns that malicious actors are ‘taking advantage’ of the outage
In a statement on Friday, CISA attributed the outages to the faulty CrowdStrike update and that the issue was not due to a cyberattack. CISA said that it was “working closely with CrowdStrike and federal, state, local, tribal and territorial partners, as well as critical infrastructure and international partners to assess impacts and support remediation efforts.”

CISA did note, however, that it has “observed threat actors taking advantage of this incident for phishing and other malicious activity.” The cybersecurity agency did not provide more specifics, but warned organizations to stay vigilant.

Malicious actors can and will exploit confusion and chaos to carry out cyberattacks on their own. Rachel Tobac, a social engineering expert and founder of cybersecurity firm SocialProof Security, said in a series of posts on X to “verify people are who they say they are before taking sensitive actions.”

“Criminals will attempt to use this IT outage to pretend to be IT to you or you to IT to steal access, passwords, codes, etc.,” Tobac said.

What do we know about misinformation so far?
It’s easy to understand why some might have thought that this outage was a cyberattack. Sudden outages, blue screens at airports, office computers filled with error messages, and chaos and confusion. As you might expect, a fair amount of misinformation is already flying around, even as social media sites incorrectly flag trending topics like “cyberattack.”

Remember to check official sources of news and information, and if something seems too good to be true, it might just well be.

TechCrunch will keep this report updated throughout the day.