Bloomberg - Evening Briefing - Time is running out

Bloomberg Evening Briefing

With two days left before a likely US government shutdown, more collateral damage is coming into view. The refusal by far-right Republicans to deal also threatens to delay publication of key economic data—something that will test the trust of policymakers and investors in less-regarded economic indicators. Without critical figures like the Labor Department’s monthly employment report and a key inflation gauge from the Commerce Department, data from private-sector sources will move into the spotlight. Some of these indicators—including gauges of business activity from the Institute for Supply Management, private payrolls from ADP Research Institute and existing-home sales from the National Association of Realtors—have informed Federal Reserve officials in their quest to tame the worst inflation in a generation. Others do so indirectly by feeding into government reports. Yet, when any policy missteps could be enough to derail America’s seeming path to a soft landing, the Fed’s emphasis on decisions as “data dependent” becomes more precarious. “It’s not like there are all these perfect substitutes laying around,” said Michael Pugliese, a senior economist at Wells Fargo. “It’s hard to replace both the quantity and the quality of that gold-standard data.” 

Here are today’s top stories

Federal prosecutors charged a former employee of Goldman Sachs and Blackstone with securities fraud for allegedly tipping his friends to more than half a dozen deals. The charges detail how the group made more than $400,000 on trades passed around on messaging apps like Signal as well as Xbox chat. The latest complaint marks at least the fifth incident involving a Goldman Sachs employee in recent years.

BlackRock is the latest exchange-traded fund issuer to try and clone JPMorgan’s biggest active strategy. The BlackRock Advantage Large Cap Income ETF tracks dividend-paying stocks in addition to selling S&P 500 call options. The new fund resembles the $29 billion JPMorgan Equity Premium Income ETF, which has already spurred a bunch of copycats.

Tesla was sued by the US Equal Employment Opportunity Commission for allegedly creating a hostile work environment for racial minorities at its California factory. The electric-vehicle maker co-founded by Elon Musk subjected Black workers “to severe or pervasive racial harassment,” the agency said, and unfairly retaliated against workers who complained. The agency’s probe predates a separate lawsuit by California’s civil rights agency, accusing Tesla of ignoring “rampant racism” against Black workers at its factory in Fremont, California, and other facilities throughout the state. California officials alleged Tesla turned a blind eye to years of complaints about racial slurs at its plant, where the electric automaker produces the Model S, X, 3 and Y.

Elon Musk Photographer: Stefani Reynolds/AFP

China Eastern Airlines ordered 100 C919 single-aisle planes from Commercial Aircraft Corp of China, dealing a potential blow to Boeing. The order is worth $9.9 billion at list prices, but a significant discount has been applied. Meanwhile, Boeing’s orders have dried up in China, its most important export market, partly due to tensions between Washington and Beijing.

Johnson Controls, a provider of air-conditioning equipment and building security systems, fell the most in almost two months after disclosing a cyberattack that’s disrupted part of its internal information systems. Shares dropped as much as 5.7% Thursday morning, its biggest intraday decline since Aug. 2, though it pared losses later. 

Uber, DoorDash and GrubHub lost an attempt to block a New York City rule setting minimum pay of $18 an hour for food delivery workers. The companies joined forces to fight the rule benefitting those people who bring you that late-night cheeseburger in the rain. The case is one of several the delivery companies have launched in recent years to stymie efforts by the city to rein in their operations, including a 2021 challenge to a cap on commissions the apps collect from the restaurants who make the food the workers deliver.

George Soros’ $25 billion charity is on the cusp of a transformation that will reshape its operations, slash its staff and test whether his son Alex is ready to head one of the world’s biggest and most influential philanthropies. Alex, who was named official successor to his billionaire father at the Open Society Foundations in June, has revealed only a few details of the overhaul, which will include a five-month freeze on new donations starting in October and a minimum 40% staff cut.

Alex Soros Photographer: Jason Alden/Bloomberg

What you’ll need to know tomorrow

The Growing Threat of an American Debt Crisis

The Republicans behind the looming US government shutdown have said the conflict, like that of the default they almost triggered in the spring, is about reducing America’s budget deficit. But the discretionary spending they’re targeting doesn’t include the three elephants in the room: Social Security, healthcare and defense. The cost of servicing US debt—largely attributable to those three—has surged in recent years. At some point, the failure to tackle America’s large and growing budget deficit is going to hit the wallets of ordinary Americans. And hard. In the Bloomberg Originals mini-documentary America’s Looming Debt Spiral, we spell out the potentially dire consequences that may flow from the continued inability of the world’s largest economy to manage its finances. The path back to fiscal prudence is getting longer, the consequences of doing nothing are becoming worse—and time is running out.

Bloomberg Originals: America’s Looming Debt Spiral

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