World

Stock markets resumed their downward trend Wednesday, with traders fearing the Federal Reserve’s determination to beat inflation with higher interest rates will tip the world’s top economy into recession.

After bouncing from their June lows, global equities are once again taking a hiding from worried investors after Fed chief Jerome Powell warned last week the bank would need to tighten policy much more to succeed in its battle against prices.

Wall Street’s three main indexes fell for a third straight day Tuesday to sit at a one-month low, with healthy data on US consumer sentiment and job openings indicating the economy remained resilient despite recent rate hikes and four-decade high inflation.

But analysts said the readings were a case of good news being bad news as they would allow the Fed to stick to its plan of lifting borrowing costs further. Expectations are growing for a third successive three-quarter-point increase next month.

Traders are now awaiting the release of US jobs creation figures on Friday for a better idea about the state of the economy.

But commentators said trying to plot a course through the next few months would be tricky owing to inflation and rate increases as well as other issues such as the Ukraine war, geopolitical tensions and China’s Covid-damaged economy.

“What’s clear is that predicting this market is not clean cut,” Angeline Newman, of UBS Global Wealth Management, told Bloomberg Television.

“We are living in a world where conflicting economic signals are making the path of monetary policy very difficult to determine.”

Hong Kong and Shanghai-led Asian markets opened lower after a report on Chinese factory activity showed another contraction, as the sector was buffeted by lockdowns due to Beijing’s zero-Covid strategy and high temperatures that led to energy rationing.

The reading reinforced the view that the world’s number two economy continued to struggle.

There were also big losses in Tokyo, Seoul, Singapore, Manila and Jakarta.

Worries about an economic slowdown and the possible hit to demand were also dragging on oil, which was on course for a third monthly drop, with both main contracts tumbling more than five percent Tuesday.

However, while they remain wedged below $100 a barrel, market-watchers pointed out the commodity had plenty of upside potential as investors grapple with a range of supply issues including unrest in Libya and Iraq and expectations that Iran nuclear talks will not end anytime soon.

Adding to the upward pressure was news that Russian energy giant Gazprom intends to shut off gas deliveries for three days from Wednesday via the Nord Stream pipeline through Germany.

– Key figures at around 0230 GMT –

Tokyo – Nikkei 225: DOWN 0.6 percent at 28,039.91 (break)

Hong Kong – Hang Seng Index: DOWN 1.3 percent at 19,684.90

Shanghai – Composite: DOWN 0.7 percent at 3,203.54

Euro/dollar: DOWN at $1.0021 from $1.0024 on Tuesday

Pound/dollar: UP at $1.1666 from $1.1661

Euro/pound: DOWN at 85.91 pence from 85.95 pence

Dollar/yen: DOWN at 138.54 yen from 138.66 yen

West Texas Intermediate: UP 0.7 percent at $92.26 per barrel

Brent North Sea crude: UP 0.5 percent at $99.85 per barrel

New York – Dow: DOWN 1.0 percent at 31,790.87 (close)

London – FTSE 100: DOWN 0.9 percent at 7,361.63 (close)

California legislators on Tuesday passed a bill to require tech firms to put the well-being of children over profits when designing apps or other online products.

The bill is heading to the desk of Governor Gavin Newsom whose signature is needed for the Age-Appropriate Design Code Act to become law in the state that is home to Silicon Valley titans such as Meta, Google, and Apple.

The office of Assembly woman Buffy Wicks said the bill – AB 2273 – passed by a unanimous vote.

If signed into law, firms making apps or websites would have to build protections for children into products, even if they are intended for adults, according to the bill.

“Businesses that develop and provide online services, products, or features that children are likely to access should consider the best interests of children when designing, developing, and providing that online service, product, or feature,” the bill read.

“If a conflict arises between commercial interests and the best interests of children, companies should prioritize the privacy, safety, and well-being of children over commercial interests.”

The law would stop tech firms from profiling children; selling their data; estimating their ages, or designing features that are detrimental to their well-being, Wicks said in a tweet.

The bill was modeled on the Age Appropriate Design Code passed in Britain last year, according to 5Rights Foundation, an advocacy group for children’s online rights.

“With this bill, California is not only setting the standard for children who live in the tech sector’s backyard, but it also paves the way for the rest of the United States and for the world,” 5Rights founder Beeban Kidron said in a release.

Trade association NetChoice, whose members include Google, Meta and TikTok, called for the California governor to veto the bill, along with two others that seek to regulate how online platforms operate.

One of the bills requires social media platforms to publicly disclose their policies regarding online hate, disinformation, extremism, and harassment, as well as key metrics and data regarding the enforcement of those policies.

“California has been a leader in technology development, but the legislature’s actions would give innovators yet another reason to leave the Golden State to avoid overly burdensome regulation that harms families and violates the First Amendment,” said NetChoice policy counsel Jennifer Huddleston.

NetChoice argued that there are better policies the state could employ to help parents keep children safe online and support the mental health of teenagers.

Russian energy giant Gazprom on Wednesday cuts off its gas supplies to Germany via the Nord Stream 1 pipeline for maintenance work, further raising tensions on an already taut electricity market.

The three-day works at a compressor station are “necessary”, Gazprom has said, adding that they had to be carried out after “every 1,000 hours of operation”.

But Germany’s Federal Network Agency chief Klaus Mueller has called it a “technically incomprehensible” decision, warning that it was likely just a pretext by Moscow to wield energy supplies as a threat.

Experience shows that Moscow “makes a political decision after every so-called maintenance”, he said, adding that “we’ll only know at the beginning of September if Russia does that again”. 

Europe has been on edge over soaring energy prices as Russia curbed its gas deliveries in the wake of its invasion of Ukraine.

Germany, which is heavily dependent on Russian gas, has accused Moscow of using energy as a “weapon”.

– ‘Much better position’ –

With winter round the corner, European consumers are staring down the barrel of huge power bills. Some countries like France have warned that rationing is a possibility.

Asked if gas supplies would resume after the three-day works are completed on Saturday, Russian government spokesman Dmitry Peskov said “there is a guarantee that, apart from technical problems caused by sanctions, nothing interferes with supplies”.

Western capitals “have imposed sanctions against Russia, which do not allow for normal maintenance, repair work”, he added, in what appeared to hint at a replay of an earlier round of start-stop rigmarole.

Gazprom had already carried out 10 days of long-scheduled maintenance works in July. While it restored gas flows following the works, it drastically dwindled supplies just days later, claiming a technical issue on a turbine.

The Russian company insists that a key turbine could not be sent to Russia because of sanctions on Moscow. But Germany, where the turbine was located, has said Moscow was itself in fact blocking the turbine’s delivery to Russia.

An official at Gascade, which operates the distribution network within Germany, also viewed Gazprom’s latest actions sceptically.

“In July, it was regular maintenance planned for a long time by Nord Stream 1, this time it was not planned and we don’t know what is behind this operation,” the official said on condition of anonymity.

A day ahead of the new shutdown, Chancellor Olaf Scholz said Germany was now “in a much better position” in terms of energy security, having achieved its gas storage targets far sooner than expected.

Europe as a whole was also getting a march on filling its gas storage tanks. On Sunday, storage levels were already at 79.9 percent of capacity in the EU.

– ‘Gas emergency’ –

At the same time, fears over throttled supplies have also driven companies to slash their energy usage.

Germany’s industry consumed 21.3 percent less gas in July than the average for the month from 2018 to 2021, said the Federal Network Agency.

Mueller has said such pre-emptive action “could save Germany from a gas emergency this winter”.

And Europe’s biggest economy was already racing to turn its back on Russian gas. 

At the German coastal city of Lubmin, where Nord Stream 1 comes onshore, plans are already well underway for the switch to liquefied natural gas (LNG).

The LNG, transported in by ships, will arrive at Lubmin’s industrial port and be converted back into gas and pumped into Gascade’s distribution network, which has so far been used to funnel Russian gas around the country.

“We expect to be able to inject gas into the distribution network on December 1,” said Stephan Knabe of Deutsche ReGas — the company managing the LNG project.

The company believes that up to 4.5 billion cubic metres of gas can be imported via the Lubmin LNG terminal alone, making up around eight percent of Nord Stream 1’s capacity.

Europe as a bloc meanwhile was preparing to take emergency action to reform the electricity market in order to bring galloping prices under control. Fear of shortages of natural gas has driven futures contracts for electricity in France and Germany to record levels.

Two top executives at Snap are leaving to join Netflix, the streaming giant said Tuesday, after a report emerged that the Snapchat parent company is to slash its workforce by a fifth.

Netflix said in a statement that Snap’s chief business officer Jeremi Gorman and Peter Naylor, the vice president of ad sales for the Americas, will be joining the company in September.

The announcement came after tech news website The Verge reported that the southern California-based Snap Inc. plans to lay off about 20 percent of its more than 6,400 employees. or

Snap declined to comment on the report but shares sank more than four percent to less than $10 in after-market trades.

On an earnings call in July, Snap chief financial officer Derek Andersen said the company has seen “macroeconomic challenges develop” through the first half of this year and that headcount was a significant portion of its operating expenses.

Snap reported that its loss in the recently ended quarter nearly tripled to $422 million despite revenue increasing 13 percent under conditions “more challenging” than expected.

A hit with young internet users in its early days, image-centric ephemeral messaging app Snapchat has remained a small player in the social networking space as competition has grown ever more intense.

The number of people using Snapchat daily grew to 347 million in the recently ended quarter, Snap reported.

Snap recast itself a while back as a “camera company,” fielding offerings such as picture-taking glasses called Spectacles and a pocket-sized Pixy flying camera drone.

“Long-term the most exciting opportunity is (augmented reality) and we’re investing heavily around the future of AR,” Andersen said in the earnings call.

Meanwhile, the battle for people’s attention online grows increasingly fierce as established titans such as Meta and Google adapt offerings to changing trends and relative newcomers such as TikTok grab the spotlight.

Stanley Kubrick once famously said J.R.R. Tolkien’s “The Lord of the Rings” trilogy of novels was unfilmable.

It is hard to imagine what the great director would have made of Amazon’s $1 billion gamble on “The Lord of the Rings: The Rings of Power,” a 50-hour television series based on the dry historical footnotes published at the end of book three.

The show, out Friday globally on Prime Video, aims to tap into the huge and enduring appeal of books still regularly voted the world’s best-loved novels of all time, as well as Peter Jackson’s Oscar-winning film adaptations.

It is central to Amazon’s bid to stand out in the “streaming wars” with Netflix, Disney+ and HBO Max — whose own “Game of Thrones” prequel just launched — and is bankrolled by multi-billionaire founder Jeff Bezos, a Tolkien mega-fan.

But populated by heroes and villains who are barely — if at all — referenced in Tolkien’s trilogy and its “Appendices” of fictional mythology, and featuring a largely unknown cast and creators, there is no doubting the scale of the gamble.

“It is quite nerve wracking — we’re building something from the ground up that’s never been seen before,” said Sophia Nomvete, who plays Princess Disa, the first female and first Black dwarf depicted on screen in Tolkien’s world.

“There’s definitely a few nerves. We want to get it right,” she told AFP at the Comic-Con fan event last month.

“The Rings of Power” is set in Tolkien’s “Second Age” — a period of history in his fictional Middle Earth world thousands of years before the events of “The Hobbit” and “The Lord of the Rings.”

So while a handful of characters from Jackson’s films reappear in Amazon’s show — mostly younger versions of elves such as Galadriel and Elrond, who are of course immortal — there is no Frodo, Gollum or Aragorn in sight.

Most characters from Tolkien lore are appearing on screen for the first time, and some have even been created entirely from scratch for the show.

“Tolkien hasn’t really written much about who he is as a person,” said Maxim Baldry, whose character Isildur was briefly seen fighting the evil lord Sauron in a flashback at the start of Jackson’s trilogy.

Here, Baldry plays a younger version of the tragic hero, struggling with the death of his mother, over-bearing pressure from his father, and a romantic yearning for adventure.

“What a gift, firstly, to explore someone’s beginnings, finding their true colors, understanding who they really are,” said Baldry.

He added: “Season one is purely about setting up characters and introducing new characters to the family… fleshing out a pretty skeletal world that Tolkien just created in the Second Age.”

– ‘Wonderfully crazy’ –

The fate of the series rests in the hands of creators — or “showrunners” — Patrick McKay and J.D. Payne, who pitched their concept to Amazon after it bought the rights in 2017, but had only a handful of previous projects credited on their CVs.

“We wanted to find a huge Tolkienian mega epic. And Amazon were wonderfully crazy enough to say ‘yes, let’s do that,” McKay said at Comic-Con.

At the London premiere Tuesday, Bezos admitted that “some people even questioned our choice” to bring in “this relatively unknown team.”

“But we saw something special,” he said, according to Variety.

Amazon has also put on glitzy premieres for “The Rings of Power” in Los Angeles, New York and Mumbai.

The show’s lavish globe-trotting promotion is just a drop in the ocean compared to the astonishing cost of actually making a series dubbed the most expensive ever for television.

Amazon splurged $250 million buying the rights from Tolkien’s estate, and some $465 million on the first season alone. It has committed from the start to making five full seasons, meaning the final cost is expected to pass $1 billion.

With high stakes has come considerable secrecy.

Plot details and reviews were strictly embargoed until Wednesday, just two days before the series’ launch, and even its actors have not been told the fates of their characters.

“No idea! I don’t even know what’s happening next season,” said Megan Richards, who plays Poppy Proudfellow, a character whose Harfoot race are ancestors of the hobbits.

“There’s an arc that Tolkien has given us for the Second Age. So there are certain things we know,” Daniel Weyman, who plays a mysterious man billed simply as “The Stranger,” told AFP.

“The thing that I hold on to is that our showrunners, they definitely know their arc. They know their arc already.”