Економіка

Heavy rainfall forced the subway system in Zhengzhou, capital of China’s Henan province, to shut down Tuesday, stranding passengers.

Riders posted videos on social media as they awaited rescue in waist-high muddy waters. A passenger named Xiaopei posted on Weibo that “the water in the carriage has reached (their) chest.”

Around 300 people have been rescued so far, and an unknown number remain trapped.

Local media outlets report that train floodwaters were lowering.

Henan province, home to about 94 million people, experienced severe rains through the past week. On Tuesday, the region’s meteorological station issued the highest threat level, a red warning, as rains are expected to continue for the next 24 hours, Reuters reported.

A representative of the city of Xu Liyi, a member of the Standing Committee of Henan Provincial Party Committee, and Secretary of the Zhengzhou Municipal Party Committee said the high levels of rainfall were unusual.

Extreme weather events have surged this summer in China, with recent flooding in Sichuan province killing hundreds of citizens and forcing thousands to evacuate the area. Officials of Greenpeace International, an environmental group, warn that China’s rapid urbanization will increase the frequency of climate disasters.

Speaking to the Chinese media, Liu Junyan of Greenpeace said “because of the highly concentrated population, infrastructure and economic activity, the exposure and vulnerability of climate hazards are higher in urban areas.”

This report contains information from Reuters.
…

Resurgent pandemic worries knocked stocks lower from Wall Street to Tokyo on Monday, fueled by fears that a faster-spreading variant of the virus may upend the economy’s strong recovery. 

The S&P 500 fell 68.67, or 1.6%, to 4,258.49, after setting a record just a week earlier. In another sign of worry, the yield on the 10-year Treasury touched its lowest level in five months as investors scrambled for safer places to put their money.  

The Dow Jones Industrial Average slumped 725.81, or 2.1%, to 33,962.04, while the Nasdaq composite lost 152.25, or 1.1%, to 14,274.98. 

Airlines and other companies that would get hurt the most by potential COVID-19 restrictions took some of the heaviest losses, similar to the early days of the pandemic in February and March 2020. United Airlines lost 5.5%, mall owner Simon Property Group gave up 5.9%, and cruise operator Carnival fell 5.7%. 

The selling also circled the world, with several European markets sinking roughly 2.5% and Asian indexes down a bit less. The price of benchmark U.S. crude, meanwhile, fell more than 7% after OPEC and allied nations agreed on Sunday to eventually allow for higher oil production this year. 

COVID numbers 

Increased worries about the virus may seem strange to people in parts of the world where masks are coming off, or already have, thanks to COVID-19 vaccinations. But the World Health Organization says cases and deaths are climbing globally after a period of decline, spurred by the highly contagious delta variant. And given how tightly connected the global economy is, a hit anywhere can quickly affect the other side of the world. 

Even in the U.S., where the vaccination rate is higher than in many other countries, people in Los Angeles County must once again wear masks indoors regardless of whether they’re vaccinated following spikes in cases, hospitalizations and deaths. 

Across the country, the daily number of COVID-19 cases has soared by nearly 20,000 over the past two weeks to about 32,000. The vaccine campaign has hit a wall, with the average number of daily inoculations sinking to the lowest levels since January, and cases are on the rise in all 50 states. 

Economic growth expected

That’s why markets are concerned, even though reports show the economy is still recovering at a fantastically high rate and the general expectation is for it to deliver continued growth. Any worsening of virus trends threatens the high prices that stocks have achieved on expectations the economy will fulfill those lofty forecasts. 

Financial markets have been showing signs of increased concerns for a while, but the U.S. stock market had remained largely resilient. The S&P 500 has had just two down weeks in the past eight, and the last time it had even a 5% pullback from a record high was in October.  

Several analysts pointed to that backdrop of high prices and very calm movements for weeks while dissecting Monday’s drop. 

“It’s a bit of an overreaction, but when you have a market that’s at record highs, that’s had the kind of run we’ve had, with virtually no pullback, it becomes extremely vulnerable to any sort of bad news,” said Randy Frederick, vice president of trading and  derivatives at Charles Schwab. “It was just a matter of what that tipping point was, and it seems we finally reached that this morning” with worries about the delta variant. 

He and other analysts are optimistic stocks can rebound quickly. Investors have been trained recently to see every dip in stocks as merely an opportunity to buy low.  

Barry Bannister, chief equity strategist at Stifel, was more pessimistic. He said the stock market may be in the early stages of a drop of as much as 10% following its big run higher. The S&P 500 nearly doubled after hitting its bottom in March 2020.  

“The valuations, they just got too frothy,” he said. “There was just so much optimism out there.” 

The bond market has been louder and more persistent in its warnings. The yield on the 10-year Treasury tends to move with expectations for economic growth and for inflation, and it has been sinking since late March, when it was at roughly 1.75%. It fell to 1.20% Monday from 1.29% late Friday. 

Analysts and professional investors say a long list of potential reasons is behind the sharp moves in the bond market, which is seen as more rational and sober than the stock market. But at the heart is the risk the economy may be set to slow sharply from its current, extremely high growth.  

Risks to economy

Besides the new variants of the coronavirus, other risks to the economy include fading pandemic relief efforts from the U.S. government and a Federal Reserve that looks set to begin paring back its assistance for markets later this year.  

Monday’s selling pressure was widespread, with nearly 90% of the stocks in the S&P 500 lower. Even Big Tech stocks fell, with Apple down 2.7% and Microsoft 1.3% lower. Such stocks seemed nearly immune to virus fears during earlier downturns, rising with expectations for continued growth almost regardless of the economy’s strength.  

Across the S&P 500, analysts are forecasting profit growth of nearly 70% for the second quarter from a year earlier. That would be the strongest growth since 2009, when the economy was climbing out of the Great Recession.  

But just like worries are rising that the economy’s growth has already peaked, analysts are trying to handicap by how much growth rates will slow in upcoming quarters and years for corporate profits. 
 
…

U.S. Attorney General Merrick Garland on Monday announced a new Justice Department policy that prohibits federal prosecutors from seizing journalists’ phone and email records in leak investigations.

This comes on the heels of a Biden administration decision that the U.S. government will discontinue a highly controversial practice of using subpoenas and secret orders for reporters’ communications data to track down government leakers.

“The Department of Justice will no longer use compulsory legal process for the purpose of obtaining information from or records of members of the news media acting within the scope of newsgathering activities,” Garland wrote in a widely-anticipated memo to his department’s leadership and federal prosecutors.

The policy announcement means the Justice Department will no longer issue subpoenas, warrants and court orders to reporters, their publishers and third-party service providers to obtain the journalists’ records.

There will be exceptions, however. The ban does not apply to obtaining information about a journalist who is under criminal investigation or a journalist who has “used criminal methods” to acquire information, Garland wrote in the three-page statement.

“The prohibition does apply when a member of the news media has, in the course of newsgathering, only possessed or published government information, including classified information,” Garland said.

The announcement comes two months after the Justice Department informed reporters from the Washington Post, New York Times and CNN that the department under former President Donald Trump secretly obtained their phone and email records. As part of a leak investigation, the Justice Department reportedly subpoenaed Apple for the records of two Democratic members of Congress, their aides and family members.

The revelations caused outrage among journalists and press freedom advocates and prompted the Justice Department’s inspector general to open a review of the seizures. Garland promised to change the department’s policy on obtaining journalists’ records and voiced support for legislation to make safeguards permanent.

Last month, the attorney general met with executives from the three news organizations and pledged to announce a new policy on the issue. At a news conference last month, Garland said “the only way to make [the policy] permanently durable is through legislation, and I personally will support working with Congress to develop legislation that would make protections for obtaining the press’ records part of the legislation.”

In his memo, Garland said he had asked his deputy, Lisa Monaco, to review existing Justice Department rules on obtaining journalists’ records and to “codify the…protections in regulations.” He also reiterated his support for congressional action “to protect members of the news media.”

Press freedom advocates praised the new policy.

“The attorney general has taken a necessary and momentous step to protect press freedom at a critical time,” Bruce Brown, executive director of Reporters Committee for Freedom of the Press, said in a statement. “This historic new policy will ensure that journalists can do their job of informing the public without fear of federal government intrusion into their relationships with confidential sources.”

On Twitter, Freedom of the Press Foundation urged Congress to “immediately codify these rules so they have the force of law.”
 
…

Egyptian authorities released three activists and three journalists Sunday after months in pre-trial detention, officials and lawyers said. The releases came after U.S. officials, among others, expressed concern over the arrests and harassment of rights advocates and critics of President Abdel Fattah el-Sissi’s government.

State security prosecutors ordered the release of the six pending ongoing investigations into charges against them, according to two judicial officials. They spoke on condition of anonymity because they were not authorized to brief the media. 

The charges rage from disseminating false news and misuse of social media platforms to joining a terrorist group, a reference to the Muslim Brotherhood which Egypt designated as a terrorist group in 2013. 

Despite their lengthy detention, those arrested and released have yet to stand trial, according their lawyers.

Esraa Abdel-Fattah, a pro-democracy activist and writer, walked free early Sunday, her sister Shimaa wrote in a Facebook post. She was a co-founder of the April 6 movement that played a crucial role in the 2011 pro-democracy uprising that toppled longtime autocrat Hosni Mubarak.

Abdel-Fattah was arrested in October 2019 in a city west of Cairo, during a crackdown that followed small but rare anti-government protests. Hundreds were arrested at the time, but many were later released.

Prominent rights lawyer Mahienour el-Masry also was released Sunday, her sister Maysoon el-Masry wrote in a Facebook post that included a photo of the lawyer wearing a white uniform for jailed people and a face mask.

El-Masry, who is widely known for her activism in labor movements, and on behalf of Syrian and Palestinian refugees living in Egypt, had been arrested in Sep. 2019 amid the crackdown that followed the rare protest.

Authorities also released journalist Gamal el-Gamal, said rights lawyer Nasser Amin. El-Gamal, who is widely known for his columns critical of el-Sissi’s government, was arrested earlier this year upon arrival at Cairo International Airport from Turkey, where he had lived since 2017.

Also among those released Sunday were journalists Mustafa el-Aasar and Moataz Wadnan, who had been held in pre-trail detention since 2018, according to rights lawyer Malek Adly.

Abdel-Nasser Ismail, deputy head of the Socialist People’s Alliance Party, also walked free earlier Sunday after nearly two years in pre-trail detention.

The releases came amid calls by lawmakers and public figures to release activists and rights advocates who have been detained in recent years in over what they say politically-motivated charges.
Last week, there was an outcry by rights advocates when prosecutors last week referred Hossam Bahgat, a leading Egyptian investigative journalist and human rights advocate, to trial. Bahgat said he was accused of insulting Egypt’s election authority, spreading false news alleging electoral fraud, and using social media to commit crimes.

The accusations stem from a tweet Bahgat wrote last year blaming the election authority’s chairman for allegedly mishandling last year’s parliamentary vote, he said.

U.S. State Department spokesman Ned Price condemned Bahgat’s indictment and the detention and harassment of Egyptian civil society leaders, academics, and journalists under el-Sissi.

“We’ve communicated to the Egyptian government our strong belief that individuals such as Hossam Bahgat should not be targeted for expressing their views peacefully,” Price said last week. “As a strategic partner we’ve raised these concerns with the Egyptian government, and we will continue to do so going forward.”

Also last week, an Egyptian court began the trial of six secular activists and journalists, including former lawmaker Zyad el-Elaimy, rights lawyer Khalid Ali said. The six, who were arrested in 2019, face an array of charges including disturbing the public peace through disseminating false news about domestic affairs. The next court session is July 29, Ali said.

El-Elaimy and others were added by a court last year to a list of suspected terrorists for the next five years. The decision was upheld last week by the Court of Cassation — Egypt’s highest criminal court. 

Also added to the terror list was Palestinian-Egyptian activist Ramy Shaath, who helped establish Egypt’s branch of the Palestinian-led boycott movement against Israel, known as BDS. 

Shaath, the son of a former Palestinian foreign minister, was also detained in 2019 but has not been charged or referred to court for trial. His wife, a French citizen, has been deported.

The Egyptian government has in recent years waged a wide-scale crackdown on dissent, jailing thousands of people, mainly Islamists, but also secular activists involved in the 2011 Arab Spring uprising that toppled longtime autocrat Hosni Mubarak.

Journalists have also been targeted, with dozens imprisoned and some expelled. Egypt remains among the world’s top jailers of journalists, along with Turkey and China, according to the Committee to Protect Journalists.
…

…

The leader of the Taliban said Sunday that his movement is committed to a political settlement to end decades of war in Afghanistan, even as the insurgents battle in dozens of districts across to country to gain territory. 

The statement by Mawlawi Hibatullah Akhundzada came as Taliban leaders were meeting with a high-level Afghan government delegation in the Gulf state of Qatar to jump-start stalled peace talks. The Kabul delegation includes the No. 2 in the government, Abdullah Abdullah, head of Afghanistan’s national reconciliation council. 

The talks resumed Saturday, ahead of the four-day Muslim holiday of Eid al-Adha, which in many parts of the world is expected to start Tuesday. A second session took place Sunday afternoon. 

Washington’s peace envoy Zalmay Khalilzad, who is in Qatar, previously expressed hope for a reduction in violence and possibly a cease-fire over Eid al-Adha. 

Akhundzada said that “in spite of the military gains and advances, the Islamic Emirate strenuously favors a political settlement in the country, and every opportunity for the establishment of an Islamic system.”  

The Islamic Emirate of Afghanistan is what the Taliban called their government when they ruled the country for five years, until their ouster by a U.S.-led coalition in 2001. 

Still, there are few signs of a political agreement on the horizon. Battles between the Taliban and government forces are continuing in dozens of provinces, and thousands of Afghans are seeking visas in hopes of leaving the country. Most are frightened that the final withdrawal of U.S. and NATO troops after nearly 20 years will plunge their war-ravaged nation into deeper chaos. With the U.S. withdrawal more than 95% complete, Afghanistan’s future seems uncertain. 

Militias with a brutal history have been resurrected to fight the Taliban but their loyalties are to their commanders, many of them U.S.-allied warlords with ethnic-based support. 

This has raised the specter of deepening divisions between Afghanistan’s many ethnic groups. Most Taliban are ethnic Pashtuns and in the past there have been brutal reprisal killings by one ethnic group against another. 

In a sign of how little progress has been made in negotiations, both sides are still haggling over terminology, unable to agree on the name for the nation. The Taliban are insisting on the Islamic Emirate of Afghanistan. Kabul wants the Islamic Republic of Afghanistan. 

Meanwhile Akhunzada’s statement demanded an Islamic system without explaining what that meant. 

He promised to support education, but for girls he said the “Islamic Emirate will … strive to create an appropriate environment for female education within the framework of sublime Islamic law.” 

He didn’t say how that differed from the educational institutions that have been created during the last 20 years and whether women would be allowed the freedom to work outside their home and move freely without being accompanied by a male relative. 

He said the Taliban have ordered their commanders to treat civilians with care and to protect institutions and infrastructure. Yet, reports have emerged from areas coming under Taliban control that schools have been burned, women have been restricted to their homes and some government buildings have been blown up. 

The Taliban have denied reports of such destruction, saying that the footage being shown is old and accused the government of being engaged in disinformation and propaganda. 
…

…