Stocks begin to stabilize after a rout set off by China’s property market woes.

The group forecast that the worldwide economy would grow 5.7 percent in 2021, slightly lower than its previous estimate.

S&P 500







Outside an Evergrande housing complex in Beijing, a resident wielded a cloth dragon.Credit…Ng Han Guan/Associated Press

Stocks rebounded on Tuesday after their worst day in months, when markets were rocked by fears that a potential default at the property giant China Evergrande Group would send shock waves through global markets.

The S&P 500 climbed about half a percent in early trading. On Monday, it dropped 1.7 percent, its worst day since May. The Stoxx Europe 600 rose 1 percent, rebounding from a 1.7 percent slump the previous day.

In Asia, the Hang Seng Index in Hong Kong rose just 0.5 percent after dropping 3.3 percent on Monday.

The Nikkei 225 in Japan dropped 2.2 percent on Tuesday. It was closed on Monday for a holiday, along with several other major Asian markets.

Evergrande has huge debts and an interest payment of more than $80 million due this week, and so far, there is little indication Beijing will come to its rescue.

Analysts at Mizuho, a Japanese bank, said Evergrande was a casualty of the Chinese government’s policy goals of reducing inequality, “where a property market rally is therefore undesirable.” And so, China is imposing tight credit conditions to rein in risky borrowing habits of property developers, and potentially more taxes.

These measures could slow China’s economy and reduce consumer demand for foreign goods. The risk of this happening hadn’t been fully considered by investors in American and European stock markets, the analysts said.

This week, investors still need to navigate a packed schedule of central bank policy decisions, particularly the Federal Reserve’s meeting on Wednesday, when policymakers are expected to signal when they might scale back the central bank’s enormous bond-buying program. The purchases have helped prop up the economy and the stock market during the pandemic.

After the Fed meeting, “assuming the Fed avoids advocating for an excessively tight monetary policy, demand for risk assets should return,” the analysts at Mizuho wrote.

A map at an Evergrande development in Beijing showing the company’s projects across the country.Credit…Andy Wong/Associated Press

Shares of China Evergrande, the troubled real estate giant whose fate has contributed to jitters in global markets, fell again on Tuesday amid a new prediction that it would soon default.

The company’s chairman, Xu Jiayin, told employees in a letter quoted in Chinese media that Evergrande would surmount its problems, which include $300 billion in debt, plunging sales of apartments and a payment due Thursday.

“I firmly believe that Evergrande will walk out of its darkest moment and resume full-speed work and production,” he said in the letter, which was confirmed by a company spokesman.

But a dire forecast about the company’s fate arrived on Tuesday for investors in Asia, this one from S&P Global Ratings. “We believe Beijing would only be compelled to step in if there is a far-reaching contagion causing multiple major developers to fail and posing systemic risks to the economy,” said the report, which was dated Monday.

Both the company’s shares and its bonds fell on Tuesday, though by more modest amounts than in recent days and weeks. Its shares closed 0.4 percent lower, and shares of other Chinese-focused developers that tumbled on Monday recovered some of their losses. Hong Kong’s Hang Seng Index, which fell 3.3 percent on Monday, ended the day with a 0.5 percent gain.

The impact of an Evergrande collapse would depend in large part on the attitudes of China’s top leaders.

Many of Evergrande problems stem from new restrictions on home sales as Beijing tries to tame real estate prices and address rising concerns about the price of homes. The government has also sought to teach a lesson to developers who borrowed heavily in recent years to build more properties and finance their investments in other businesses. (In the case of Evergrande, those include interests that include electric cars and a soccer team.)

But a hard landing for Evergrande, should it default, carries risks. Unhappy home buyers and suppliers could cause unrest, while the financial impact on investors and others who might be exposed to Evergrande could be costly.

Beijing, however, has a number of ways to try to stop a financial disaster. The government controls the banks and the financial ties between them. It also firmly controls the flow of money across the country’s borders, allowing it to stem a potential rush of funds outside the country.

“The officials still have some tools at their disposal to calm down the panic,” said Zhiwu Chen, a professor of finance at the University of Hong Kong, who predicted the authorities would break up the company and sell its parts piecemeal.

The authorities also can control media coverage, while the police have considerable powers to detain anybody who raises a public fuss.

A vaccination clinic in New Delhi. Inoculation rates remain varied, and many low-income countries and emerging markets except China are still far behind, the O.E.C.D. said.Credit…Adnan Abidi/Reuters

The Organization for Economic Cooperation and Development said on Tuesday that a global economic recovery from the pandemic was finally taking hold, but it inched back its forecast for worldwide economic growth and warned that the rebound was benefiting wealthier countries more than the developing world as vaccine distribution occurs at an uneven pace.

Countries that have made big strides toward vaccinating most of their populations are bouncing back much more quickly than those that are still struggling to obtain shots, the O.E.C.D. said, raising a host of related economic problems that are affecting global supply chains and pose a risk for the future.

“The global shock that pushed the world to the worst recession in a century is now fading, and we’re now projecting the recovery will bring growth back to its pre-crisis trend,” Laurence Boone, the organization’s chief economist, said in a news briefing.

But vaccination rates remain varied, and many low-income countries and emerging markets, with the exception of China, are still far behind, Ms. Boone added. “A failure to vaccinate globally puts all of us at risk,” she said.

The warnings came as the O.E.C.D. released its semiannual economic forecast, in which it lowered its outlook for global growth, the U.S. economy and emerging markets, but raised its outlook for Europe.

The global growth outlook for 2021 was revised down slightly to 5.7 percent, from 5.8 percent.

The organization, which is based in Paris, said that the United States would grow at a 6 percent pace, down from a 6.9 percent forecast in May, while the eurozone was expected to expand by 5.3 percent, up from previous expectations of 4.3 percent growth. Slower growth in Germany is expected to be offset by faster-than-expected rebounds in France, Italy and Spain.

Growth is likely to taper off next year after an extraordinary rebound from the recession, with the global economy expected to expand at a 4.5 percent pace and the United States growing at 3.9 percent. Europe’s economy will also cool, to a forecast 4.6 percent rate.

China, the world’s second biggest economy, was forecast to grow by 8.5 percent this year, before slowing to a 5.8 percent pace in 2022.

But the robust numbers masked lingering troubles within even the richest economies, where the recovery has benefited people unevenly.

While growth in the United States returned to prepandemic levels, employment remains lower than before the economic restrictions. In Europe, which deployed billions to shield its businesses and workers from mass unemployment and bankruptcies at the height of the crisis, employment has been largely preserved.

And the virus and lagging vaccination rates continue to throw a wrench into the smooth functioning of the global economy, snarling supply chains, the O.E.C.D. said.

“There are some parts that haven’t left factories in countries with virus outbreaks,” Ms. Boone said. As a result, numerous companies are running out of inventory and slowing production, which in turn is pushing prices higher for a range of goods.

At the same time, a rapid rebound in demand has sharply increased oil prices, which are 80 percent higher than a year ago, while shipping costs “have been going through the roof,” Ms. Boone added.

Such factors have helped fuel inflation, which has “risen sharply” in the United States and some emerging market countries, the report said, but should fade once supply chain bottlenecks fade.

Inflation will ease quicker from the current alarming levels if vaccination programs speed up.

“If we continue to vaccinate and adapt better to living with the virus, supply will begin to normalize and this pressure will fade,” Ms. Boone said. “But for that we have to vaccinate more people.”

Universal Music is the world’s largest music company, boasting a roster that including Taylor Swift, Drake and Billie Eilish.Credit…Mario Anzuoni/Reuters

Vivendi spun off Universal Music on the Amsterdam stock exchange on Tuesday, and investors liked the sound of it: Shares jumped around 40 percent at the open, valuing the record label at more than $50 billion.

Universal is by far the world’s largest music company, holding a 31 percent market share and boasting a roster of major stars, including Taylor Swift, Drake and Billie Eilish.

The successful debut of a player in a once unloved industry, defying a jittery market, could change the tune for others in the wider entertainment world, the DealBook newsletter reports.

The music industry had been all but written off not that long ago, with digital downloads (and piracy) eroding lucrative physical sales. But Universal, led by the power broker Lucian Grainge, leaned in to the trends and made big bets on streaming, social media and other areas:

A 2013 deal with Apple helped the tech giant start its music service two years later.

Its 2017 deal with Spotify put the streaming pioneer on the path to going public.

Universal was the first major music company to sign with Facebook, also in 2017.

The label has recently shored up its publishing library, buying Bob Dylan’s back catalog for about $300 million last year.

The bets appear to have paid off: Universal Music has averaged double-digit growth in sales and profits over the past two years, and expects this to continue in 2021. The company now generates nearly 70 percent of its revenue from streaming and publishing.

There was some drama in the spinoff process, mostly coming from the hedge fund manager William A. Ackman. The billionaire’s hedge fund, Pershing Square, has a 10 percent stake in Universal Music, though not in the way he originally hoped. His plan to invest in Universal via his special purpose acquisition company fell through when the Securities and Exchange Commission took issue with its structure — his logic, however, was validated by the big pop in the company’s value. (That’s good for Pershing Square’s hedge fund investors, but not for its SPAC shareholders.)

Other major investors in Universal Music include the Chinese gaming firm Tencent (20 percent) and the French billionaire Vincent Bollore (18 percent).

China is a part of Universal’s growth plan and is one of the reasons that the label brought in Tencent as an investor. The risks of doing business in the country have become more stark lately, and the authorities there have made clear that Tencent is under scrutiny in a broader tech crackdown. In 2019, Universal Music was contacted by Chinese officials investigating market competition in the music industry.

A house in Los Angeles outfitted with rooftop solar panels.Credit…Philip Cheung for The New York Times

Fearing that growth in California’s solar power sector could grind to a halt, the association representing the industry has filed a lawsuit against the state over a new requirement that installers be “certified electricians.”

In the lawsuit filed on Friday, the California Solar and Storage Association asked the Superior Court of California in San Francisco to overturn the rule changes and allow the current training standards to remain in place for those who install increasingly popular solar panels and battery systems.

“This is devastating to California’s solar industry and the state’s ability to build a clean energy future,” Bernadette Del Chiaro, executive director of the association, said in an interview. “What they’re saying is, this stuff is so dangerous that only certified electricians can do it. We don’t have any evidence, a shred of evidence, that there’s a problem.”

Ms. Del Chiaro said the new rules would affect hundreds of solar companies in the state and 35,000 workers. And with electricians already in high demand for construction projects and other services, finding enough people who meet the requirement, she said, will make it nearly impossible for solar and battery companies to deliver their products.

In two rule changes in July, the Contractors State License Board voted to require workers who install solar panels and batteries to be certified electricians to ensure the safe installation of equipment involving power. Utility companies are exempt from the requirement, which takes effect Nov. 1.

Joyia Emard, a spokeswoman for the licensing board, declined to comment on the lawsuit.

California by far leads the nation in solar installations, driven in part by former Gov. Arnold Schwarzenegger’s push for solar panels to be on a million homes — a goal the state reached in December 2019 — and by efforts to replace fossil fuel power plants with large-scale solar farms and other clean energy resources to address the impact of climate change.

Solar panels now sit atop roofs, desert sands and agricultural fields from coast to coast, though the power source provides less than 4 percent of electricity production nationwide. In a report this month, the Energy Department said solar power could help achieve President Biden’s carbon-reduction goals, but the nation would need as much as 45 percent of its electricity from the sun.

In California, rooftop panels make up about 50 percent of the state’s solar market, and the installers are almost three-quarters of the industry’s work force, Ms. Del Chiaro said.

Rooftop solar and batteries have become increasingly popular as extreme weather events related to climate change, including wildfires and brutally high temperatures, have led to blackouts and power shut-offs.

The rooftop solar industry is also fighting with utility companies in California over the compensation that consumers receive for the electricity their systems provide to the electric grid. Utilities want to add more fees while cutting the credit consumers receive, known as net metering, by as much as 80 percent from the current dollar-for-dollar benefit.

The net metering issue is under review by the California Public Utilities Commission.

With the license board rule change, Ms. Del Chiaro said California appeared to be moving in the opposite direction of the state and nation’s climate objectives.

“It is entirely unjustified,” she said.

The Soles4Souls warehouse in Alabama is suffering shortages of footwear as manufacturers that donate inventory keep more of it in a frantic bid to satisfy retail customers.Credit…Audra Melton for The New York Times

Two years into a relentless pandemic, the world economy remains awash in logistical difficulties. Factories in Asia are struggling to satisfy demand for their products. Ports are short of shipping containers and healthy hands to unload them. Trucks are idled for lack of drivers, with warehouses overwhelmed by goods.

And the continuing disruption to factory production and bottlenecks in shipping are leaving nonprofit groups short of goods for vulnerable communities worldwide, Peter S. Goodman reports for The New York Times.

In Haiti, one of the world’s poorest countries, an effort to increase household incomes is confronting a new problem stemming from the upheaval — a shortage of shoes.

The Haitian American Caucus, a nonprofit organization, imports donated, used shoes from the United States and sells them at low-cost to women who hawk them on sidewalks and in markets, earning crucial cash for their families.

The caucus is distributing almost 100,000 pairs of shoes a month, but it could manage four times as many if only more inventory arrived, said its executive director, Samuel Darguin.

“That pair of shoes represents so much more,” he said. “It represents a mother being able to send a kid to school, being able to afford health care and feed her family maybe two meals a day instead of one.”

Google said on Tuesday that it would buy a sprawling Manhattan office building on the Hudson River waterfront for $2.1 billion, expanding the tech giant’s presence in New York and providing a jolt of optimism for a city hammered by the pandemic. The purchase price of the building, the St. John’s Terminal, is one of the largest for a building in the United States in recent years and comes after Google has acquired other large properties in Manhattan, piecing together a sizable East Coast campus for the company.

Royal Dutch Shell sold its oil and gas production in the Permian Basin, the biggest American oil field, to ConocoPhillips for $9.5 billion in cash on Monday. The deal marks a turning point for Shell, which had put considerable effort into developing the field since buying acreage from Chesapeake Energy nine years ago, expanding its production to about 200,000 barrels a day. The sale is also the latest sign that Shell, like other European oil companies, is under pressure to sell off oil and gas production and move toward producing cleaner energy in response to growing concerns about climate change among investors and the general public.

Activision Blizzard, the video game maker behind Call of Duty and other major franchises, said on Monday that the Securities and Exchange Commission was investigating the company over “disclosures regarding employment matters and related issues.” A press officer for Activision said the S.E.C. had issued subpoenas to the company and several current and former employees, but did not offer more details on the focus of the investigation. The company is cooperating with the inquiry, the official said in an emailed statement.

Erin Griffith (@eringriffith) and Erin Woo (@erinkwoo), two of our tech reporters, are covering the trial of Elizabeth Holmes, who dropped out of Stanford University to create the blood testing start-up Theranos at age 19 and built it to a $9 billion valuation and herself into the world’s youngest self-made female billionaire — only to flame out in disgrace after Theranos’s technology was revealed to have problems.

Follow along here or on Twitter as she is tried on 12 counts of wire fraud and conspiracy to commit wire fraud. The trial is generally held Tuesdays, Wednesdays and Fridays.

Erin Woo

With that, Judge Davila is ending Gangakhedkar’s testimony for the day and instructing jurors not to consume media content about the trial, as always. The trial will resume on Tuesday — Erin Griffith will be at the courthouse to bring you live updates.

Erin Woo

We are now onto cross-examination. Holmes’s lawyer is questioning her about G.S.K.’s study of Theranos’s assays, pointing out that the study promoted her work. “The Theranos system eliminates the need for a lab and provided quality data,” the G.S.K. memo said.

Erin Woo

Despite having signed an N.D.A., Gangakhedkar printed out some documents and took them home when she left Theranos. “I was worried that I would be blamed,” she testified.

Erin Woo

Three days after the email from Balwani, Gangakhedkar sent Holmes her resignation email. She testified that she was “very stressed and unhappy and concerned” with the planning of the Walgreens launch.

Erin Woo

In an email from Balwani to Gangakhedkar, with Holmes copied, Balwani said the software team had been working until 3:07 a.m., but that the Edison blood-testing devices Gangakhedkar’s team worked on were “all sitting idle.” This was an example of the pressure they were under, Gangakhedkar said.

Senator Mitch McConnell, the minority leader, appeared last week with Senators Roy Blunt, John Barrasso, John Thune and Joni Ernst at a news conference on Capitol Hill.Credit…Al Drago for The New York Times

The House is expected on Tuesday to take up legislation that would keep the government funded through early December, lift the limit on federal borrowing through the end of 2022 and provide about $35 billion in emergency money for Afghan refugees and natural disaster recovery, setting up a clash with Republicans who have warned they will oppose the measure.

The bill, which Democrats released on Tuesday just hours before a planned vote, is needed to avert a government shutdown when funding lapses next week and avoid a first-ever debt default when the Treasury Department reaches the limit of its borrowing authority within weeks. But it has become ensnared in partisan politics, with Republicans refusing to allow a debt ceiling increase at a time when Democrats control Congress and the White House.

In pairing the debt limit raise with the spending package, Democrats hoped to pressure Republicans into dropping their opposition. But few, if any, Republicans are expected to support it.

And the prospects for passage in the 50-50 Senate appeared dim amid widespread opposition by Republicans, who have said they will neither vote for the legislation nor allow it to advance in the chamber, where 60 votes are needed to move forward.

The legislation would extend government funding through Dec. 3, buying more time for lawmakers to negotiate the dozen annual spending bills, which are otherwise on track to lapse when the new fiscal year begins on Oct. 1. The package would also provide $6.3 billion to help Afghan refugees resettle in the United States and $28.6 billion to help communities rebuild from hurricanes, wildfires and other natural disasters.

“It is critical that Congress swiftly pass this legislation to support critical education, health, housing and public safety programs and provide emergency help for disaster survivors and Afghan evacuees,” said Representative Rosa DeLauro of Connecticut, the chairwoman of the Appropriations Committee.

But the decision by Democratic leaders to attach it to legislation lifting the federal debt limit through Dec. 16, 2022 could ultimately jeopardize a typically routine effort to stave off a government shutdown, heightening the threat of fiscal calamity.

Led by Senator Mitch McConnell of Kentucky, the minority leader, Republicans have warned for weeks that they had no intention of helping Democrats raise the limit on the Treasury Department’s ability to borrow. While the debt has been incurred with the approval of both parties, Mr. McConnell has repeatedly pointed to Democrats’ efforts to push multi-trillion-dollar legislation into law over Republican opposition.

Democrats, who joined with Republicans during the Trump administration to raise the debt ceiling, have argued that the G.O.P. is setting a double standard that threatens to sabotage the economy. Should the government default on its debt for the first time, it would prompt a financial crisis, shaking faith in American credit and cratering the stock market.

In a statement, Treasury Secretary Janet L. Yellen said ransomware and cyberattacks were “a direct threat to our economy.”Credit…Erin Scott for The New York Times

The Biden administration was preparing to take action on Tuesday to crack down on the growing problem of ransomware attacks, expanding its use of sanctions to cut off the digital payment systems that have allowed such criminal activity to flourish and threaten national security.

The sanctions, which the Treasury Department said it was imposing on a virtual currency exchange called Suex in a preview of its new approach, represent the administration’s most pointed response to a scourge that has disrupted America’s fuel and meat supplies this year as foreign hackers locked down corporate computer systems and demanded large sums of money to free them.

The illicit financial transactions underpinning ransomware attacks have been taking place with digital money known as cryptocurrencies, which the U.S. government is still determining how to regulate.

The Treasury Department said Suex had facilitated transactions involving illicit proceeds from at least eight ransomware incidents. More than 40 percent of the exchange’s transactions have been linked to illicit actors, the department said.

“Ransomware and cyberattacks are victimizing businesses large and small across America and are a direct threat to our economy,” Treasury Secretary Janet L. Yellen said in a statement.

The department offered few details about Suex, declining to say where the company was based or what kinds of transactions it facilitated. It did say that while some virtual currency exchanges are exploited by criminals, Suex was facilitating illegal activities for its own gain.

The action came three months after President Biden, meeting in Geneva with President Vladimir V. Putin of Russia, demanded that he crack down on ransomware operators suspected of working from Russian territory. Mr. Putin made no promises. Before the meeting, one attack had taken out Colonial Pipeline, which provides much of the East Coast’s gasoline and jet fuel; another had penetrated a major American meat supplier.

For a few months, attacks seemed to abate, and a major ransomware operator, DarkSide, appeared to break up.

But late this summer, attacks began to rise again. Paul M. Abbate, the F.B.I.’s deputy director, who specializes in cybercrimes, said last week at a conference that “there is no indication that the Russian government has taken action to crack down on ransomware actors that are operating in the permissive environment that they’ve created there.”

He said there also had been little action taken against those in Russia facing indictments in the United States.

Intelligence officials report the same, and say they believe that some Russian military and intelligence services make use of the ransomware operators to hide actions that may be conducted on behalf of the state, or at least with its acquiescence.

An attack against another food supplier was playing out on Monday, even as the Treasury Department was preparing its action. New Cooperative, a grain cooperative in Iowa, said it was part of “critical infrastructure,” and noted that the ransomware group, a relatively new one called BlackMatter, had promised not to attack such groups. But in responses that appeared in screenshots on Twitter, BlackMatter said it did not consider the cooperative to be critical infrastructure. The ransomware group and its victim got into an open dispute over the definition of that category.

“We don’t see any critical areas of activity,” the ransomware group responded.

BlackMatter demanded just shy of $6 million to decrypt the firm’s files. That figure declined dramatically over time.

The Treasury Department said that in 2020, ransomware payments topped $400 million, which was four times as high as the previous year. The economic damage, it said, was far greater.

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